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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>As filed with the Securities and Exchange Commission on October&nbsp;31, 2011  </B></FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B> Registration No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </B></FONT></P>


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<div style="width:100%;border-top:solid #000000 1.0pt;padding:0in 0in 0in 0in;font-size:4.0pt;"></div>  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>  </B></FONT><FONT SIZE=2><B>Washington, D.C. 20549  </B></FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>FORM S-1<BR>  </B></FONT><FONT SIZE=2><B>REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF&nbsp;1933  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>Isola Group&nbsp;Ltd.<BR>  </B></FONT><FONT SIZE=2>(Exact name of registrant as specified in its charter) </FONT></P>

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<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Cayman Islands</B></FONT><FONT SIZE=2><BR>
(State or other jurisdiction of<BR>
incorporation or organization)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> 3672</B></FONT><FONT SIZE=2><BR>
(Primary Standard Industrial<BR>
Classification Code Number)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> 38-3853493</B></FONT><FONT SIZE=2><BR>
(I.R.S. Employer<BR>
Identification No.)</FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>3100 West Ray Road, Suite&nbsp;301<BR>
Chandler, Arizona 85226<BR>
(480)&nbsp;893-6527</B></FONT><FONT SIZE=2><BR>
(Address, including zip code, and telephone number, including<BR>
area code, of registrant's principal executive offices) </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Raymond P. Sharpe<BR>
President and Chief Executive Officer<BR>
Isola Group&nbsp;Ltd.<BR>
3100 West Ray Road, Suite&nbsp;301<BR>
Chandler, Arizona 85226<BR>
(480)&nbsp;893-6527<BR>  </B></FONT><FONT SIZE=2>(Name, address, including zip code, and telephone number, including area code, of agent for service) </FONT></P>

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<TD COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Copies to:</B></FONT></TD>
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<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2><B> Steven D. Pidgeon, Esq.</B></FONT><FONT SIZE=2><BR>
DLA Piper&nbsp;LLP (US)<BR>
2525 East Camelback Road, Suite&nbsp;1000<BR>
Phoenix, Arizona 85016<BR>
(480)&nbsp;606-5100<BR>
Fax: (480)&nbsp;606-5101</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2><B> Julia Cowles, Esq.</B></FONT><FONT SIZE=2><BR>
Davis Polk&nbsp;&amp; Wardwell&nbsp;LLP<BR>
1600 El Camino Real<BR>
Menlo Park, California 94025<BR>
(650)&nbsp;752-2000<BR>
Fax: (650)&nbsp;752-2111</FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Approximate date of commencement of proposed sale to the public:<BR>
As soon as practicable after the effectiveness of this registration statement.  </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities Act of
1933, check the following box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this form is filed to register additional securities for an offering pursuant to Rule&nbsp;462(b) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this form is a post-effective amendment filed pursuant to Rule&nbsp;462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this form is a post-effective amendment filed pursuant to Rule&nbsp;462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule&nbsp;12b-2 of the Exchange Act. (Check one): </FONT></P>
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<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Large accelerated filer&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Accelerated filer&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>Non-accelerated filer&nbsp;<FONT FACE="WINGDINGS">&#253;</FONT><BR></FONT> <FONT SIZE=1>(Do not check if a<BR>
smaller reporting company)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Smaller reporting company&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>CALCULATION OF REGISTRATION FEE  </B></FONT></P>

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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:5pt;text-indent:-5pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
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<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Title of each class of securities to be registered</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Proposed maximum aggregate offering price(1)(2)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Amount of registration fee(3)</B></FONT><BR></TH>
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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:4pt;text-indent:-4pt;"><FONT SIZE=1><B> </B></FONT><FONT SIZE=2>Ordinary Shares, $0.0001 par value</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$100,000,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$11,460</FONT></TD>
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<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;"><p style="font-family:times;margin-left:5pt;text-indent:-5pt;"> &nbsp;</TD>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Includes
ordinary shares issuable upon exercise of an option to purchase additional shares from us granted to the underwriters.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Estimated
solely for the purpose of calculating the registration fee pursuant to Rule&nbsp;457 of the Securities Act.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Calculated
pursuant to Rule&nbsp;457(o) under the Securities Act. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall
file&nbsp;a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section&nbsp;8(a) of the Securities Act of 1933 or
until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section&nbsp;8(a), may determine.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> <div style="width:100%;border-top:solid #000000 1.0pt;padding:0in 0in 0in 0in;font-size:3.0pt;"></div>
<div style="width:100%;border-top:solid #000000 3.0pt;padding:0in 0in 0in 0in;font-size:4.0pt;"></div>  </B></FONT></P>

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</B></FONT><FONT COLOR="#FF4040" SIZE=2><B>The information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and
we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. </B></FONT></P>

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PRELIMINARY PROSPECTUS&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to completion,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dated October&nbsp;31, 2011 </FONT></P>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares


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<IMG SRC="g996532.jpg" ALT="LOGO" WIDTH="126" HEIGHT="54">
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Ordinary shares


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<P style="font-family:times;text-align:justify"><FONT SIZE=2>This is the initial public offering of our ordinary shares. No public market currently exists for our ordinary shares. It is currently estimated that the
initial public offering price will be between $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
intend to apply to have our ordinary shares listed on the Nasdaq Global Market under the symbol "ISLA". </FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>Investing in our ordinary shares involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our
ordinary shares in "Risk Factors" beginning on page&nbsp;11 of this prospectus.</B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.</B></FONT></P>

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<TH ALIGN="CENTER" style="font-family:ARIAL;"><FONT  style="font-size:8pt;line-height:9pt;" >&nbsp;</FONT><BR></TH>
<TH style="font-family:ARIAL;"><FONT  style="font-size:8pt;line-height:9pt;" >&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:ARIAL;"><FONT  style="font-size:8pt;line-height:9pt;" ><B>Per share</B></FONT><BR></TH>
<TH style="font-family:ARIAL;"><FONT  style="font-size:8pt;line-height:9pt;" >&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:ARIAL;"><FONT  style="font-size:8pt;line-height:9pt;" ><B>Total</B></FONT><BR></TH>
<TH style="font-family:ARIAL;"><FONT  style="font-size:8pt;line-height:9pt;" >&nbsp;</FONT></TH>
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<TD VALIGN="BOTTOM" style="font-family:ARIAL;"><p style="font-family:ARIAL;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Initial public offering price</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD COLSPAN=7 VALIGN="BOTTOM" style="font-family:ARIAL;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:ARIAL;">&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:ARIAL;"><p style="font-family:ARIAL;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Underwriting discount</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=7 VALIGN="BOTTOM" style="font-family:ARIAL;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:ARIAL;">&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:ARIAL;"><p style="font-family:ARIAL;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proceeds, before expenses, to us</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:ARIAL;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=7 VALIGN="BOTTOM" style="font-family:ARIAL;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:ARIAL;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
underwriters have the option, exercisable on or before the thirtieth day after the date of this prospectus, to purchase up to an
additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares from us
at the public offering price, less the underwriting discounts and commissions, to cover over-allotments, if any. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
underwriters are offering the ordinary shares as set forth under "Underwriting". Delivery of the shares will be made on or
about&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:100%;margin-left:0%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=4><B>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


  </B></FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="48%" style="font-family:times;"></TD>
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<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=4><B>


<!-- COMMAND=ADD_TF,"font-family:ARIAL;" --><font style="font-family:ARIAL;">


 UBS Investment Bank


</font><!-- COMMAND=ADD_ETF,"A" -->


 </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=4>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=4><B>


<!-- COMMAND=ADD_TF,"font-family:ARIAL;" --><font style="font-family:ARIAL;">


 Piper Jaffray


</font><!-- COMMAND=ADD_ETF,"A" -->


 </B></FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><I>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="CENTER" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="CENTER" >


  </I></FONT><FONT SIZE=2>

<!-- COMMAND=ADDING_LINEBREAK -->

<BR></FONT></P>
 <DIV style="padding:0pt;position:relative;width:100%;margin-left:0%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=4><B>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


  </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="48%" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="48%" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=4><B>


<!-- COMMAND=ADD_TF,"font-family:ARIAL;" --><font style="font-family:ARIAL;">


 Needham&nbsp;&amp; Company,&nbsp;LLC


</font><!-- COMMAND=ADD_ETF,"A" -->


 </B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=4>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=4><B>


<!-- COMMAND=ADD_TF,"font-family:ARIAL;" --><font style="font-family:ARIAL;">


 Oppenheimer&nbsp;&amp;&nbsp;Co.


</font><!-- COMMAND=ADD_ETF,"A" -->


 </B></FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The
date of this prospectus is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011 </FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=2,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=428581,FOLIO='blank',FILE='DISK108:[11ZAS1.11ZAS12701]BE12701A.;21',USER='KSEAMON',CD='29-OCT-2011;20:03' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="page_bg12701_1_1"> </A>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




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</FONT></P>

<!-- TOC_END -->

<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A NAME="BG12701A_main_toc"></A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="JUSTIFY" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="JUSTIFY" >


  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>You should rely only on the information contained in this prospectus. We and the underwriters have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to buy, ordinary shares only in jurisdictions where offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date on the front cover of this prospectus, or such other dates as are stated in this prospectus, regardless of the time of delivery of this prospectus or of any
sale of our ordinary shares. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="bg12701_table_of_contents"> </A>
<BR></FONT><FONT SIZE=2><B>  TABLE OF CONTENTS    <BR>    </B></FONT></P>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="JUSTIFY" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="JUSTIFY" >


<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Prospectus</B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A NAME="BG12701_TOC"></A> </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>
<!-- COMMAND=ADD_START_LINKTABLE -->

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="27pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Page </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#ca12701_prospectus_summary"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Prospectus Summary</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ca12701_prospectus_summary"><FONT SIZE=2><B> 1</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#Risk_Factors."><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Risk Factors</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#Risk_Factors."><FONT SIZE=2><B> 11</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#cm12701_forward-looking_statements"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Forward-looking Statements</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#cm12701_forward-looking_statements"><FONT SIZE=2><B> 28</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#co12701_use_of_proceeds"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Use of Proceeds</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#co12701_use_of_proceeds"><FONT SIZE=2><B> 29</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#cq12701_dilution"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dilution</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#cq12701_dilution"><FONT SIZE=2><B> 30</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#cs12701_dividend_policy"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dividend Policy</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#cs12701_dividend_policy"><FONT SIZE=2><B> 32</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#cu12701_capitalization"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Capitalization</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#cu12701_capitalization"><FONT SIZE=2><B> 33</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#cw12701_selected_historical_co__cw102293"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Selected Historical Consolidated Financial and Other Data</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#cw12701_selected_historical_co__cw102293"><FONT SIZE=2><B> 34</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#da12701_management_s_discussion_and_an__man03466"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Management's Discussion and Analysis of Financial Condition and Results of
Operations</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#da12701_management_s_discussion_and_an__man03466"><FONT SIZE=2><B> 37</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#Business."><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Business</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#Business."><FONT SIZE=2><B> 80</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#dq12701_management"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Management</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dq12701_management"><FONT SIZE=2><B> 97</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#ds12701_executive_compensation"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Executive Compensation</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ds12701_executive_compensation"><FONT SIZE=2><B> 103</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#dy12701_principal_shareholders"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Principal Shareholders</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dy12701_principal_shareholders"><FONT SIZE=2><B> 123</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#ea12701_certain_relationships_and_related_party_transactions"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Certain Relationships and Related Party Transactions</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ea12701_certain_relationships_and_related_party_transactions"><FONT SIZE=2><B> 126</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#ec12701_shares_eligible_for_future_sale"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shares Eligible for Future Sale</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ec12701_shares_eligible_for_future_sale"><FONT SIZE=2><B> 130</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#ee12701_description_of_share_capital"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Description of Share Capital</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ee12701_description_of_share_capital"><FONT SIZE=2><B> 132</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#ei12701_description_of_indebtedness"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Description of Indebtedness</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ei12701_description_of_indebtedness"><FONT SIZE=2><B> 146</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#ek12701_taxation"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Taxation</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ek12701_taxation"><FONT SIZE=2><B> 148</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#em12701_underwriting"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Underwriting</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#em12701_underwriting"><FONT SIZE=2><B> 152</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#eo12701_validity_of_ordinary_shares"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Validity of Ordinary Shares</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#eo12701_validity_of_ordinary_shares"><FONT SIZE=2><B> 158</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#eo12701_experts"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Experts</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#eo12701_experts"><FONT SIZE=2><B> 158</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#eo12701_additional_information"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Additional Information</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#eo12701_additional_information"><FONT SIZE=2><B> 158</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#fa12701_index_to_consolidated_financial_statements"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Index to Consolidated Financial Statements</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fa12701_index_to_consolidated_financial_statements"><FONT SIZE=2><B> F-1</B></FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>Through and including&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(25&nbsp;days after the
commencement of the offering), all dealers effecting transactions in
these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer's obligation to deliver a prospectus when acting as an
underwriter and with respect to unsold allotments or subscriptions.</B></FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>i </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="bi12701_market_ranking_and_industry_data"> </A>
<A NAME="toc_bi12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  MARKET RANKING AND INDUSTRY DATA    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>This prospectus includes estimates of market share and industry data and forecasts that we obtained from industry publications and surveys, including
market research firms and government sources, and internal company sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from
sources believed to be reliable. In addition, certain market and industry data included in this prospectus, and our position and the positions of our competitors within these markets, are based on
estimates of our management, which are primarily based on our management's knowledge and experience in the markets in which we operate. These estimates involve risks and uncertainties and are subject
to change based on various factors, including those discussed under the heading "Risk Factors" in this prospectus. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Throughout
this prospectus, when we refer to our "addressable" market for PCB laminate materials, or segments of our "addressable" market for PCB laminate materials, we exclude paper and composite
laminate segments, and the internal Japanese market, none of which are addressed by Isola. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="bi12701_trademarks_and_trade_names"> </A>
<A NAME="toc_bi12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  TRADEMARKS AND TRADE NAMES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>This prospectus contains registered and unregistered trademarks and service marks of us and our subsidiaries, as well as trademarks and service marks
of third parties. All brand names, trademarks and service marks appearing in this prospectus are the property of their respective holders. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="bi12701_conventions_that_apply_in_this_prospectus"> </A>
<A NAME="toc_bi12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  CONVENTIONS THAT APPLY IN THIS PROSPECTUS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="bi12701_fiscal_year"> </A>
<A NAME="toc_bi12701_4"> </A></FONT> <FONT SIZE=2><B>  Fiscal Year    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In this prospectus, unless the context requires otherwise, references to fiscal 2011 are for the fiscal year ending December&nbsp;31, 2011,
references to fiscal 2010 are for the fiscal year ended January&nbsp;1, 2011, references to fiscal 2009 are for the fiscal year ended December&nbsp;26, 2009, references to fiscal 2008 are for the
fiscal year ended December&nbsp;27, 2008, references to fiscal 2007 are for the fiscal year ended December&nbsp;29, 2007, references to fiscal 2006 are for the fiscal year ended
December&nbsp;30, 2006, references to fiscal 2005 are for the fiscal year ended December&nbsp;31, 2005, and references to fiscal 2004 are for the fiscal year ended December&nbsp;31, 2004. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="bi12701_technical_terms"> </A>
<A NAME="toc_bi12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  Technical Terms    <BR>    </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>"Dielectric"
refers to an electrical insulator that can be polarized by an applied electric field. When a dielectric is placed in an electric field, electric charges
do not flow through the material, as in a conductor, but only slightly shift from their average equilibrium positions causing dielectric polarization.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>"Dielectric
Constant" refers to a measure of how close a material comes to free space (air) conditions and how constant these conditions hold through the material.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>"Glass
Transition Temperature" or "Tg" refers to the temperature in Celsius at which the laminate begins to change between a hard, relatively brittle condition and a
viscous, or rubbery, condition.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>"Lead-free"
refers to laminates or prepreg that are suitable for lead-free soldering in the assembly of finished printed circuit boards. No
laminates or prepreg actually contain the element lead. The distinction is important, however, as lead-free solders melt at higher temperatures than solders containing lead, which require
laminates and prepreg capable of withstanding the stresses of a higher temperature environment. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>ii </B></FONT></P>

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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>"Loss",
in the context of a material's characteristics, refers to the ratio of energy dissipated to energy stored.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>"Prepreg"
is an industry term derived from the contraction of "</FONT><FONT SIZE=2><B><U>pre</U></B></FONT><FONT SIZE=2>viously
im</FONT><FONT SIZE=2><B><U>preg</U></B></FONT><FONT SIZE=2>nated". Prepreg is a dielectric material that provides electrical insulation properties. It is manufactured, as the
term suggests, by the impregnation of fabric with specially formulated resin systems that confer specific electrical, thermal and physical properties to the prepreg. While modern prepreg is generally
made from fiberglass fabric, some simple consumer electronics still use prepreg made from paper or paper composite. Prepreg is both a final product and an intermediate-stage product in the manufacture
of copper-clad laminate. </FONT></DD></DL>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>iii </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ca12701_prospectus_summary"> </A>
<A NAME="toc_ca12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Prospectus Summary    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I>This summary highlights important information about our business and about this prospectus. This summary does
not contain all of the information that may be important to you. You should carefully read this prospectus in its entirety before making an investment decision. In particular, you should read the
section titled "Risk Factors" and the consolidated financial statements and notes related to those statements included elsewhere in this prospectus. Unless the context indicates otherwise, we use the
terms "Isola", "we", "our", the "Company", and "us" in this prospectus to refer to Isola Group&nbsp;Ltd., and, where appropriate, its consolidated subsidiaries. Unless otherwise indicated, the
information contained in this prospectus assumes the completion of the
reorganization as described in this prospectus under "Concurrent Transactions" immediately prior to the consummation of this offering.</I></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ca12701_isola_group_ltd."> </A>
<A NAME="toc_ca12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  ISOLA GROUP&nbsp;LTD.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ca12701_overview"> </A>
<A NAME="toc_ca12701_3"> </A></FONT> <FONT SIZE=2><B>  Overview    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola is a leading global material sciences company that designs, develops and manufactures copper-clad laminate ("CCL")
and prepreg (collectively, "laminate materials") used to fabricate advanced multilayer printed circuit boards ("PCBs"). PCBs provide the physical platform for the semiconductors, passive components
and connection circuitry that power and control virtually all modern electronics. We focus on the market for high-performance laminate materials, developing proprietary resins that are
critical to the performance of PCBs used in advanced electronic applications. We continually invest in research and development and believe that our industry-leading resin formulations, many of which
are patented, provide us with a competitive advantage. With 11 manufacturing facilities and three research centers worldwide, as well as a global sales force, we are the largest supplier of laminate
materials to PCB fabricators in the United States and Europe, and we are one of the larger suppliers in our addressable Asian market, based on revenue for fiscal year 2010. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
high-performance PCB laminate materials are used in a variety of advanced electronics, including network and communications equipment and high-end consumer electronics, as
well as advanced automotive, aerospace, military and medical applications. Demand in these markets is driven by the rapid growth of bandwidth-intensive high-speed data transmission, the expansion of
the internet, the emergence of cloud computing and the evolution of increasingly complex communications technology. This has led to an urgent need for the development of the underlying infrastructure
to support this growth, including faster and more efficient semiconductor technology. In addition, increasingly pervasive environmental regulations are driving a need for lead-free
compatible, high-performance laminate materials. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
sell our products globally to leading PCB fabricators, including DDi, Ruwel, Sanmina, TTM Technologies, Viasystems and WUS Printed Circuit. These fabricators produce PCBs incorporating our laminate
materials for electronic equipment designed or produced by a broad group of major original equipment manufacturers, or OEMs, including Alcatel-Lucent, Brocade, Cisco, Google, Hewlett-Packard, Huawei,
IBM and Sun Microsystems (now Oracle). We work closely with these
leading PCB fabricators and major OEMs to ensure that our high-performance laminate materials incorporating our proprietary resins meet the thermal, electrical and physical performance
criteria of each new generation of electronic equipment. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
were acquired in 2004 by a group of investors led by TPG Capital, a global private equity firm, and Redfern Partners, a strategic partner and investor in the laminate materials industry. Under the
direction of TPG Capital and our management, we have undertaken a number of operational changes that have increased manufacturing efficiencies and improved business processes. We believe that these
measures, together with our focus on higher margin high-performance products, provide us with the operating leverage to take advantage of improving economic conditions. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>1 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
history dates back nearly 100&nbsp;years to the founding of Isola Werke AG in Germany in 1912. Isola Werke AG manufactured insulators utilizing the then-revolutionary Bakelite
plastic technology, which provided superior insulating and heat resistance properties. We began production of copper-clad epoxy laminates, the direct predecessors of today's PCB laminate
products, in the 1960s. In 2006, we acquired the assets of Polyclad Laminates,&nbsp;Inc., which extended our product portfolio and expanded our business in the growing Asian markets. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the six months ended July&nbsp;2, 2011, our revenue was $316.6&nbsp;million, Adjusted EBITDA was $49.2&nbsp;million, and our net loss was $19.1&nbsp;million, as compared to revenue of
$307.0&nbsp;million, Adjusted EBITDA of $49.2&nbsp;million and a net loss of $30.5&nbsp;million for the six months ended June&nbsp;26, 2010. For fiscal 2010, our revenue was
$612.0&nbsp;million, our Adjusted EBITDA was $89.7&nbsp;million and our net income was $5.1&nbsp;million, as compared to revenue of $416.1&nbsp;million, Adjusted EBITDA of $39.0&nbsp;million
and net loss of $100.7&nbsp;million in fiscal 2009. For an understanding of our primary non-GAAP metric, Adjusted EBITDA, including reconciliation to net income, see our discussion of
non-GAAP financial measures in "Selected Historical Consolidated Financial and Other Data", included elsewhere in this prospectus. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ca12701_industry_overview_and_market_opportunity"> </A>
<A NAME="toc_ca12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  Industry Overview and Market Opportunity    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Current trends and drivers in the PCB laminate materials industry include: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>rapidly
expanding infrastructure requirements for high-speed data transmission and increasing demand for high-performance PCB laminate
materials;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>increased
performance requirements of advanced electronics requiring high-performance PCB laminate materials;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>growing
demand for environmentally friendly, lead-free compatible laminate materials; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>greater
emphasis on collaboration with OEMs and PCB fabricators. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>High-performance
PCB laminate materials are defined by their superior performance capabilities achieved primarily through the use of advanced resin formulations. These products compete
primarily on their technological capabilities and are used in circuit boards that combine eight or more layers, with some applications requiring circuit boards with more than 20 layers. Our
high-performance laminate materials have a variety of applications in the markets for servers and storage devices, network communications, advanced automotive electronics,
high-end consumer electronics, military/aerospace equipment, medical equipment and satellite television receivers. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Significant
barriers to entry exist within the high-performance PCB laminate materials industry, including capital intensity, long-term customer relationships characterized by
pre-production collaboration, and lengthy periods (often up to one year) taken by OEMs to qualify laminates for new products. Once a particular PCB laminate material is designed in or
qualified for use in a specific product line and one or more particular laminate suppliers are selected, these suppliers tend to remain suppliers of choice, even as the PCBs for these products change
to address OEM product line improvements, extensions or next generation developments. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Based
on data from Prismark, an independent research firm, we estimate that our addressable market for high-performance PCB laminate materials was $4.6&nbsp;billion in 2010. According to
BPA, another independent research firm, the market for multilayer PCB laminate materials (predominantly comprised of the high-performance market segment) is expected to make up
approximately 55% of the worldwide PCB laminate materials market in 2011 (measured in square meters) and remains the fastest growing segment with an expected compound annual growth rate, or CAGR, of
12.4% from 2010 to 2014 for PCB production value. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>2 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ca12701_our_competitive_strengths"> </A>
<A NAME="toc_ca12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  Our Competitive Strengths    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We believe that we possess the following competitive strengths, which will enable us to continue to grow our business globally: </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Product technology leadership.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our significant technology expertise enables us to produce market-leading high-performance PCB laminate materials. We
possess an extensive portfolio of patent and other intellectual property rights covering our proprietary resin formulations and we believe we have pioneered the development of several product
categories with "best in class" technology. Our proprietary resin formulations are capable of supporting complex circuit boards used in the most demanding electronic equipment and differentiate our
products from commonly available, lower-performance materials. We continue to devote considerable efforts to research and develop new resin formulations and other PCB laminate materials to meet
evolving market needs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Recognized market leadership.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We maintain a leading market share, based on revenues, in each of our larger addressable markets for high-performance
laminate materials. We have an established reputation as an industry leader and product innovator with strong brand recognition, which we believe will play a significant role in our future growth. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Blue-chip customer base served by global strategic manufacturing locations.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have developed strong, long-term relationships with leading
global PCB fabricators and the major OEMs they serve. We believe that these collaborative relationships provide us with a competitive advantage and assist us in bringing new products to market in a
timely manner. We own state-of-the-art equipment in manufacturing facilities that are strategically located around the world in close proximity to these key
industry participants. Our global network of plants facilitates quick-turn manufacturing and delivery of product, which reduces our customers' inventory levels and shipping costs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Streamlined manufacturing with significant operating leverage.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We seek to achieve continual improvement in our manufacturing and business processes. We use "six
sigma" processes and "lean" best practices, and we recently completed the implementation of a sophisticated SAP-based enterprise resource planning ("ERP") and analytical system across our
global operations. In 2009, we closed three of our manufacturing facilities to improve factory utilization and lowered our fixed costs. Together with other measures, these closures are estimated to
result in permanent fixed cost savings of approximately $30&nbsp;million annually. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Experienced management team.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have a highly experienced management team comprised of well-respected industry veterans who possess an average of over
20&nbsp;years of experience in the electronics industry. Our management team has a proven track record of implementing sound business practices, including focusing our product development on higher
margin products, improving the efficiency of our manufacturing facilities and successfully integrating acquired businesses. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ca12701_our_growth_strategies"> </A>
<A NAME="toc_ca12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  Our Growth Strategies    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We intend to extend our market leadership in the higher margin, high-performance laminate materials market through the following growth
strategies: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Leverage collaborative relationships and technology leadership to develop innovative solutions.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have implemented focused product development teams to further
expand our relationships with leading PCB fabricators and the OEMs they serve. Our product development teams include members of our research and development, technical support and OEM marketing
groups, all working under the direction of our Chief Technology Officer. Our teams actively monitor OEM product developments and engage in regular dialog with OEMs and their PCB fabricators in order
to anticipate and plan for future electrical, thermal and physical product specifications. Through this collaborative effort we seek to develop innovative laminate materials solutions that meet future
OEM product requirements. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>3 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Further penetrate the Asian market.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Many OEMs and PCB fabricators are migrating manufacturing of increasingly complex electronic equipment to Asia. In addition,
several Asian markets are simultaneously undergoing infrastructure build-outs as their economies grow and develop. To supply this market, six of our 11 manufacturing facilities are located
in Asia, and we maintain a sales force dedicated to serving this region. We will seek to capitalize on the opportunities presented by the very large and fast growing Asian markets for
high-performance laminate materials based on the high quality of our products and technology. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Extend high-performance products into new applications.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We believe that other markets will benefit from our laminate materials and proprietary resin
formulations, including the markets for advanced automotive equipment and consumer devices such as next generation smart phones and tablets. In addition, we believe that environmental regulations will
become increasingly global and expand the addressable market for our high-performance, lead-free compatible and halogen-free PCB laminate materials. We intend to
devote sales and technical resources to address these growing potential markets. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Opportunistically pursue strategic acquisitions and alliances.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have grown through select acquisitions since we were acquired in 2004. While we believe that our
future success will depend primarily on product innovation from collaborative relationships with our major customers and the OEMs they serve, we may pursue strategic acquisitions that provide
complementary products or technologies. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ca12701_risk_factors"> </A>
<A NAME="toc_ca12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  Risk Factors    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>An investment in our ordinary shares involves risks. For a discussion of factors you should consider before deciding to invest in our ordinary
shares, we refer you to "Risk Factors" and the following summary: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
markets for our customers' products are volatile, which can cause wide swings in the demand for our products;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>we
depend upon a relatively small number of customers for a large portion of our sales, and a decline in sales to major customers could harm our results of
operations;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>we
sell on a purchase order basis and are subject to uncertainties and variability in demand by our customers that could decrease revenues and harm our results of
operations;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>we
depend on a small number of suppliers for the raw materials and certain components used to manufacture our products. If these suppliers fail to provide an
adequate supply of raw materials or components of sufficient quality, or these suppliers become unavailable to us, we may experience significant delays in the manufacturing and shipping of our
products to customers and our business could suffer;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>we
face intense competition in the PCB materials industry, including from diversified manufacturers and suppliers, which could negatively impact our results of
operations and cause our market share to decline;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>if
demand for high-performance, higher margin products does not increase, our future gross margins and operating results may be worse than expected; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
failure to respond timely or adequately to market changes may render our existing technology less competitive or obsolete, and our operating results may suffer. </FONT></DD></DL>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ca12701_the_principal_sponsors"> </A>
<A NAME="toc_ca12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  The Principal Sponsors    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our current principal sponsors (the "Principal Sponsors") are: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> TPG Capital.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;TPG Capital,&nbsp;L.P. (together with its affiliates, "TPG Capital") is the global buyout group of TPG, a leading private investment firm founded in
1992 with approximately $48&nbsp;billion of assets under management as of June&nbsp;30, 2011 and offices in San&nbsp;Francisco, Beijing, Fort Worth, Hong Kong, London, Luxembourg, Melbourne,
Moscow, Mumbai, New York, Paris, Shanghai, Singapore and Tokyo. TPG </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>4 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>Capital
has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, growth investments, joint ventures and restructurings. TPG
Capital's investments span a variety of industries including financial services, travel and entertainment, technology, industrials, retail, consumer, media and communications, and healthcare. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Oaktree.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Oaktree Capital Management,&nbsp;L.P. (together with its affiliates, "Oaktree") is a premier global alternative and non-traditional
investment manager with approximately $80&nbsp;billion of assets under management as of June&nbsp;30, 2011. The firm emphasizes an opportunistic, value-oriented and risk-controlled
approach to investments in distressed debt, high-yield bonds, convertible securities, senior loans, corporate control, real estate, emerging market equities and mezzanine finance. Oaktree
was founded in 1995 by a group of principals who have worked together since the mid-1980s. Headquartered in Los&nbsp;Angeles, the firm has over 600 staff members and offices in 13 cities
worldwide. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ca12701_concurrent_transactions"> </A>
<A NAME="toc_ca12701_9"> </A>
<BR></FONT><FONT SIZE=2><B>  Concurrent Transactions    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Corporate Reorganization  </I></B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Currently, we operate through Isola Group S.a.r.l., a holding company incorporated in Luxembourg (the "Luxembourg Holding Company"), a low-tax
jurisdiction. The Luxembourg Holding Company is owned by investors that include TPG Capital, Oaktree, Clearlake Capital and its affiliates, Tennenbaum Capital and its affiliates, The Blackstone
Group&nbsp;LP and its affiliates, Redfern Partners,&nbsp;LLC and its affiliates and certain members of our management (collectively, the "Sponsors"). The Sponsors hold their investment in the
Luxembourg Holding Company through
two parent entities: TPG Hattrick Partners,&nbsp;L.P. (the "Sponsor Limited Partnership") and TPG Hattrick Holdco,&nbsp;LLC (the "Sponsor Holding Company"). The Sponsor Holding Company is the
general partner of the Sponsor Limited Partnership. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Sponsor Limited Partnership currently owns all of the issued and outstanding securities of the Luxembourg Holding Company, including 500 common shares and three classes of convertible preferred
certificates (420,455 Class&nbsp;A convertible preferred certificates, 95,788,400 Class&nbsp;B convertible preferred certificates and 43,500,666 Class&nbsp;C convertible preferred certificates)
that are accounted for as debt. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
preparation for our initial public offering, the Sponsor Limited Partnership recently formed a new company in the Cayman Islands, a tax-exempt jurisdiction, called Isola Group&nbsp;Ltd.
Immediately prior to the completion of our initial public offering, we will undergo a corporate reorganization that includes the following steps: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>all
of the outstanding securities of the Luxembourg Holding Company, including the common shares and convertible preferred certificates described above, will be
contributed by the Sponsor Limited Partnership to Isola Group&nbsp;Ltd., which will result in Isola Group&nbsp;Ltd. becoming our new holding company and the Luxembourg Holding Company becoming a
subsidiary of Isola Group&nbsp;Ltd.;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>both
the Sponsor Limited Partnership and the Sponsor Holding Company will be liquidated and the ordinary shares of Isola Group&nbsp;Ltd. will be distributed to our
Sponsors; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>all
outstanding management equity awards in the Sponsor Limited Partnership and the Sponsor Holding Company will be terminated and replaced with new equity awards
for ordinary shares of Isola Group&nbsp;Ltd. that have the same value and substantially the same terms. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>At
the completion of our initial public offering: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Isola
Group&nbsp;Ltd. will be a public company;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>assuming
the underwriters do not exercise their over-allotment option, the Principal Sponsors will together own approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our
outstanding ordinary shares, investors in our initial public offering will own approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our outstanding ordinary shares and there will be options outstanding to purchase
approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our outstanding ordinary shares; and </FONT></DD></DL>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>5 </B></FONT></P>

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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
Sponsors and Isola Group&nbsp;Ltd. will enter into a shareholders agreement that provides for certain board representation rights and registration rights with
respect to their ordinary shares. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Refinancing  </I></B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In connection with this offering, we intend to enter into a new senior secured credit facility consisting of a $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million senior
secured term loan and a $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million senior secured revolving credit facility. The proceeds of the new term loan will be used to repay the outstanding balances under the
existing
senior secured credit agreement and mezzanine credit agreement that are not repaid from the proceeds of this offering. We expect the new senior secured credit facility to be completed concurrently
with the closing of this offering. Our entry into the new senior secured credit facility is conditioned on the completion of this offering. See "Description of Indebtedness". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>6 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="cc12701_corporate_information_about_isola_group_ltd."> </A>
<A NAME="toc_cc12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  Corporate Information about Isola Group&nbsp;Ltd.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola Group&nbsp;Ltd. was incorporated under the laws of the Cayman Islands on September&nbsp;20, 2011. Our principal executive offices are
located at 3100&nbsp;W.&nbsp;Ray Road, Suite&nbsp;301, Chandler, Arizona 85226. The telephone number of our principal executive offices is (480)&nbsp;893-6527, and we maintain a
website at www.isola-group.com. The information on, or that can be accessed through, our website is not part of this prospectus. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="cc12701_the_offering"> </A>
<A NAME="toc_cc12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  The Offering    <BR>    </B></FONT></P>
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<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2><B>


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 Issuer </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> Isola Group&nbsp;Ltd.</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>Ordinary Shares Offered by Issuer </B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares.</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>


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 Option to Purchase Additional Shares </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2> We have granted the underwriters a 30-day option to purchase up to an additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary
shares at the initial public offering price less the underwriting discount.</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>Ordinary Shares to Be Outstanding Immediately After this Offering </B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares.</FONT></TD>
</TR>
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 Ordinary Shares to be Beneficially Owned by the Sponsors Immediately After this Offering </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares. See "Principal Shareholders".</FONT></TD>
</TR>
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<TD style="font-family:times;"><BR><FONT SIZE=2><B>Use of Proceeds </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2> We intend to use the net proceeds of this offering, together with the proceeds of the term loan under a new senior secured credit facility that we expect to enter into at the completion of this
offering, to prepay all of the term loans outstanding under our existing senior secured credit agreement and mezzanine credit agreement at a redemption price of 100% plus interest to the prepayment date.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><B><BR>
&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2> As of July&nbsp;2, 2011, we had $210.0&nbsp;million aggregate principal amount of senior secured term loans outstanding that currently bear interest at a rate of 10% per annum and mature on
September&nbsp;30, 2015, and $185.7&nbsp;million aggregate principal amount of unsecured term loans outstanding that currently bear interest at a rate of 16% per annum and mature on March&nbsp;24, 2016. See "Use of Proceeds" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations&#151;Liquidity and Capital Resources".</FONT></TD>
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 Dividend Policy </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2> We do not intend to pay cash dividends on our ordinary shares for the foreseeable future. See "Dividend Policy".</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Lock-up </B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2> We, our executive officers and directors and certain holders of our outstanding ordinary shares, stock options and other equity awards that together hold at
least&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our outstanding ordinary shares have agreed with the underwriters, subject to certain exceptions, not to offer, sell, contract to sell or otherwise, directly or indirectly, dispose of or
hedge any of our ordinary shares or securities convertible into or exchangeable or exercisable for our ordinary shares for a period of 180&nbsp;days after the date of this prospectus. See "Underwriting" for more information.</FONT></TD>
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 Proposed Nasdaq Global Market Symbol </B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2> ISLA.</FONT></TD>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The number of ordinary shares to be outstanding immediately after this offering as set forth above is based on the number of ordinary shares outstanding at
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011, and excludes an aggregate
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional ordinary shares that will be available for future awards pursuant to our 2011 Equity Incentive Plan.
 </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Unless
otherwise indicated, all information in this prospectus assumes no exercise of the underwriters' option to purchase additional ordinary shares from us. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>8 </B></FONT></P>

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<A NAME="toc_ce12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  Summary Historical Consolidated Financial and Other Data    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table presents our summary historical consolidated financial and other data. The consolidated statements of operations data and other
financial data for fiscal 2010, 2009 and 2008, and the consolidated balance sheet data as of the end of fiscal 2010, are derived from our audited consolidated financial statements which are included
elsewhere in this prospectus. The consolidated statements of operations and other financial data for the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010, and the consolidated balance
sheet data as of July&nbsp;2, 2011, are derived from our unaudited interim financial statements for those periods included elsewhere in this prospectus. These unaudited interim financial statements
have been prepared on a basis consistent with the respective audited consolidated financial statements and, in the opinion of management, include all adjustments, consisting of normal, recurring
adjustments, necessary for a fair presentation of that
information for such periods. The financial data presented for the interim periods are not necessarily indicative of the results for the full year. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
summary historical financial data below should be read in conjunction with "Use of Proceeds", "Capitalization", "Selected Historical Consolidated Financial and Other Data", and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and related notes included elsewhere in this prospectus. </FONT></P>
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<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>June&nbsp;26, 2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=18 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands, except per share amounts)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Consolidated Statement of Operations Data:</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Revenues</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>316,583</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>306,957</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>611,987</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>416,140</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>570,333</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cost of goods sold</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>240,433</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>231,908</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>467,751</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>330,584</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>487,052</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross profit</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>76,150</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>75,049</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>144,236</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>85,556</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>83,281</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating expenses:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Sales, general and administrative</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>38,371</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>31,343</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>65,271</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>59,656</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>62,763</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Research and development</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,193</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,817</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,532</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,244</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,663</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,464</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,782</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18,129</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,692</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Goodwill impairment</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>43,741</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>39,624</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>79,585</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>87,029</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>89,631</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating income&nbsp;/ (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>32,409</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35,425</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>64,651</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,473</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6,350</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other income&#151;net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,031</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,005</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,020</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>224</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,768</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative gain&nbsp;/ (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17,472</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(58,162</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25,030</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(27,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>115,352</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest expense<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(39,032</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(26,997</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(72,134</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(54,620</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(58,478</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest income</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>94</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>159</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>339</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>453</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,307</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign exchange gain&nbsp;/ (loss)&#151;net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(20,402</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27,863</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,596</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,116</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(341</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Income&nbsp;/ (loss) from continuing operations before income taxes</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(8,428</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(18,707</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>29,502</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(85,045</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>54,258</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Provision for income taxes</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(10,679</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(11,818</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(24,420</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6,504</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6,804</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Loss from discontinued operations, net of tax</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(9,177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(11,655</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income&nbsp;/ (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(19,107</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(30,525</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(100,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35,799</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income&nbsp;/ (loss) per common share</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(38.21</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(61.05</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.16</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(201.45</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>71.60</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(38.21</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(61.05</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.16</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(201.45</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>71.60</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted average number of common and common equivalent shares outstanding</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>9 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=14,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=642205,FOLIO='9',FILE='DISK108:[11ZAS1.11ZAS12701]CE12701A.;27',USER='KSEAMON',CD='29-OCT-2011;20:04' -->
<A NAME="page_ce12701_1_10"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


</FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="91pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Consolidated Balance Sheet Data:</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>56,010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>36,733</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>228,537</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>201,208</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>149,242</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>131,603</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Working capital</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>79,295</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>69,605</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Long-term debt and capital lease obligations</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>319,784</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>306,547</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Convertible preferred certificates</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>224,679</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>199,136</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative liability</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>54,087</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>66,395</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>820,260</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>774,758</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Common stock and additional paid in capital</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>31,879</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>30,667</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total stockholders' deficiency</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(417,894</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(397,564</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> &nbsp;<BR>  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"110%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="110%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>June&nbsp;26, 2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=16 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands, except per share amounts)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Other Financial Data:</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Adjusted EBITDA<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>49,180</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>49,186</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>89,661</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>38,983</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>37,647</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Interest expense for the six months ended July&nbsp;2, 2011 was $39.0&nbsp;million (comprised of cash interest expense of $18.0&nbsp;million and non-cash interest
expense of $21.0&nbsp;million). Non-cash interest expense includes the amortization of deferred loan origination costs, the amortization of original issue discount, the accretion of
interest paid-in-kind on our debt under our mezzanine credit agreement and the accretion of interest on our convertible preferred certificates. We intend to use the proceeds of
this offering to reduce our current indebtedness and to refinance the remaining balance of our current indebtedness with $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million borrowed under a new senior secured
credit
facility bearing interest at&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% per annum. If such transactions had occurred as of the end of fiscal 2010, our total interest expense for the six months ended July&nbsp;2, 2011 would
have been $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Adjusted EBITDA is a supplemental non-GAAP measure used by management and external users of our consolidated financial statements. We define adjusted EBITDA as net
income&nbsp;/ (loss) less (A)&nbsp;loss from discontinued operations, net of tax, plus (B)&nbsp;(i)&nbsp;interest expense and interest income, net, (ii)&nbsp;provision for income taxes,
(iii)&nbsp;depreciation and amortization and (iv)&nbsp;certain additional adjustments. These additional adjustments include stock-based compensation, restructuring charges, foreign exchange
gain&nbsp;/ (loss)&#151;net, goodwill impairment, management fees paid to TPG Capital, embedded derivatives gain&nbsp;/ (loss), gain related to a settlement of a patent infringement matter
and pre-IPO expenses. For more information on Adjusted EBITDA and a reconciliation of net income (loss), the most directly comparable financial measure under U.S.&nbsp;GAAP, to Adjusted
EBITDA for the periods presented, see footnote&nbsp;4 to "Selected Historical Consolidated Financial and Other Data". Because not all companies use identical calculations, our presentation of
Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.  </I></FONT></DD></DL>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><B>10 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_risk_factors"> </A>
<A NAME="toc_ci12701_1"> </A>
<BR></FONT><FONT SIZE=4>  <A NAME="Risk_Factors."></A>Risk Factors    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I>An investment in our ordinary shares involves a high degree of risk. You should carefully consider the
following information, together with other information in this prospectus, before buying our ordinary shares. If any of the following risks or uncertainties occur, our business, results of operations
and financial condition could be materially adversely affected. In that case, the trading price of our ordinary shares could decline, and you may lose all or a part of the money you paid to buy our
ordinary shares.</I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_risks_related_to_our_industry_and_business"> </A>
<A NAME="toc_ci12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  RISKS RELATED TO OUR INDUSTRY AND BUSINESS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_the_markets_for_our_customers___the04520"> </A>
<A NAME="toc_ci12701_3"> </A></FONT> <FONT SIZE=2><B>  The markets for our customers' products are volatile, which can cause wide swings in the demand for our products.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our business depends on the electronics industry, which is cyclical and subject to significant downturns characterized by diminished product demand,
rapid declines in average selling prices and over-capacity. This industry has experienced periods characterized by relatively low demand and price depression and is likely to experience
recessionary periods in the future. Economic conditions affecting the electronics industry in general, or specific market segments,
such as computers and communications, have adversely affected our operating results in the past and may do so in the future. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Over
the past three years, the global economy has been greatly impacted by the recessionary conditions linked to rising default levels in the U.S. home mortgage sector, volatile fuel prices, and a
changing political and economic landscape. These factors have contributed to historically low consumer confidence levels, resulting in a significantly intensified downturn in demand for products
incorporating PCBs, which in turn lowered demand for our products and adversely affected our operating results. When we experience excess capacity, variable margins from our revenues may not fully
cover our fixed overhead expenses, and our gross margins may fall. A lasting economic recession, excess manufacturing capacity, or a prolonged decline in the electronics industry could negatively
affect our business, results of operations, and financial condition. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
order to respond to quick-turn orders and offer short lead times at some of our production facilities, in some cases as little as 12-48&nbsp;hours, these facilities must
operate at less than full capacity. However, if we do not receive as many quick-turn orders as we expect at these facilities and have foregone other production, we may underutilize our
manufacturing capacity. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_we_depend_upon_a_relatively_sm__we_06715"> </A>
<A NAME="toc_ci12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  We depend upon a relatively small number of customers for a large portion of our sales, and a decline in sales to major customers could harm our results of operations.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A small number of customers, which include PCB manufacturers and distributors, are responsible for a significant portion of our sales. While only one
of our customers accounted for more than 10% of our revenues in each of fiscal 2010, fiscal 2009 and fiscal 2008 and the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010, we believe that
our ten largest customers accounted for the majority of our revenues in each of these periods. Although we cannot assure you that our principal customers will continue to purchase our products at past
levels, we expect to continue to depend upon a relatively small number of customers for a significant portion of our sales. Our customer concentration could fluctuate, depending on future customer
requirements, which will depend in large part on conditions in the end-markets in which our customers operate. The loss of one or more significant customers or a decline in sales to our
significant customers could harm our business, results of operations, and financial condition and lead to declines in the trading price of our ordinary shares. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, during industry downturns, we may need to reduce prices and we may be unable to collect payments from our customers. There can be no assurance that key customers will not cancel orders,
or that </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>11 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>they
will continue to place orders with us in the future at the same levels as experienced by us in prior periods, or that they will be able to meet their payment obligations. This concentration of
customers may materially and adversely affect our operating results due to the loss or cancellation of business from any of these key customers, significant changes in scheduled deliveries to any of
these customers, or decreases in the prices of the products sold to any of these customers. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_we_sell_on_a_purchase_order_ba__we_06846"> </A>
<A NAME="toc_ci12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  We sell on a purchase order basis and are subject to uncertainties and variability in demand by our customers that could decrease revenues and harm our operating results.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We sell to customers on a purchase order basis and not pursuant to long-term contracts. Customers may cancel their orders, reduce
production quantities or delay production at any time for a number of reasons. Many of our customers have, over the past several years, experienced significant decreases in demand for their products
and services. The uncertain economic conditions in the global economy and in several of the markets in which our customers operate have in the past prompted some of our customers to cancel orders,
delay the delivery of some of the products that we manufacture or order fewer products than we previously anticipated. Consequently, our sales are subject to short-term variability in
demand by our customers. In the past, we have been required to increase staffing and other expenses in order to meet the anticipated demand of our customers. The level and timing of orders placed by
our customers may vary due to: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>changes
in our customers' inventory levels;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>changes
in customers' manufacturing strategies;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>demand
fluctuations for our customers' products; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>changes
in new product introductions. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Future
terminations, reductions, or delays in our customers' orders could harm our business, results of operations, and financial condition. Variability in demand from our customers may contribute to
fluctuations in our quarterly results, which may make our revenues more difficult to accurately forecast. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_we_depend_on_a_small_number_of__we_06335"> </A>
<A NAME="toc_ci12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  We depend on a small number of suppliers for the raw materials and certain components used to manufacture our products. If these suppliers fail to provide an adequate supply  of raw materials or components of sufficient
quality, or these suppliers become unavailable to us, we may experience significant delays in the manufacturing and shipping of our products to customers  and our business could suffer.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We depend on a small number of suppliers for the raw materials, including copper, resin and fiberglass, as well as certain components, used in the
manufacture of our products. These suppliers must comply with Isola's stringent specifications and technical requirements. Our reliance on these suppliers involves significant risks and uncertainties,
including whether they will provide an adequate supply of required raw materials or components of sufficient quality, will not increase prices for the raw materials or components and will perform
their obligations on a timely basis. If we are unable to obtain raw materials or components from third-party suppliers in the quantities and of the quality that we require on a timely basis and at
acceptable prices, we may not be able to deliver our products on a timely or cost-effective basis to our customers, which could cause customers to end their business with us, reduce our
gross profit and seriously harm our business, results of operations and financial condition. Moreover, if any of our suppliers becomes financially unstable, we may have to find new suppliers. It may
take several months to locate alternative suppliers, if required. We may experience significant delays in manufacturing and shipping our products to customers and incur additional development,
manufacturing and other costs to establish alternative sources of supply if we lose any of these sources. We cannot predict if we will be able to obtain replacement raw materials and components within
the time frames that we require at an affordable cost, or at all. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>12 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_there_may_be_shortages_of,_or___the07235"> </A>
<A NAME="toc_ci12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  There may be shortages of, or price fluctuations with respect to, raw materials or components, which would cause us to curtail our manufacturing or incur higher than  expected costs.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We purchase the raw materials and certain components we use in producing our products, and we may be required to bear the risk of price fluctuations
of raw materials or components. Shortages of raw materials and price fluctuations have occurred in the past and may occur in the future. Copper prices have been particularly volatile in the last four
years, declining to less than $3,000 per ton in late 2008 and increasing to more than $10,000 per ton during the six months ended July&nbsp;2, 2011. Although historically we have been able to pass
through a substantial portion of the raw material cost increases to our customers, we may not continue to be able to do so in the future if we experience significant supply disruptions or excess
levels of industry capacity or due to other factors outside of our control, in which case our profitability could suffer. Our ability to pass through raw material price increases may be limited by the
level of industry excess capacity, competitive practices and other regional-specific factors which are out of our control. In addition, if we experience a shortage of materials or components, we may
not be able to produce products for our customers in a timely fashion. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_we_are_vulnerable_to_a__ci102171"> </A>
<A NAME="toc_ci12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  We are vulnerable to an increase in the cost of energy.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our production processes require us to use substantial amounts of power. In the past several years, there has been a significant increase in global
energy prices. Changes in the cost or availability of energy resources, including oil, gas and electricity, are beyond our control and could materially increase our cost of operations. We maintain
only limited back-up power generation facilities at some of our manufacturing locations. In the event of a power shortage, we could be required to cease operations at an affected facility
until power is restored. There can be no assurance that our facilities will avoid material utility-based interruptions, which could have a material effect on our results of operations and financial
condition. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_we_may_experience_significant___we_03682"> </A>
<A NAME="toc_ci12701_9"> </A>
<BR></FONT><FONT SIZE=2><B>  We may experience significant fluctuations in results of operations from period to period.    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our quarterly results may vary significantly depending on various factors, many of which are beyond our control. These factors include: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
volume of customer orders;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>changes
in demand for customers' and OEMs' products;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>pricing
and other competitive pressures;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
effectiveness in managing manufacturing processes;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>changes
in cost and availability of raw materials and labor;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>changes
in our product mix;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>changes
in political and economic conditions; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>local
factors and events that may affect our production volume, such as local holidays. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
sales may, from time to time, shift from one quarter to the next, affecting anticipated results. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>13 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_if_demand_for_high-performance__if_05795"> </A>
<A NAME="toc_ci12701_10"> </A>
<BR></FONT><FONT SIZE=2><B>  If demand for high-performance, higher margin products does not increase, our future gross margins and operating results may be worse than expected.    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>We typically earn lower gross margins on certain of our base, low-Tg products and higher gross margins on certain of our
high-performance laminate materials. We experience continued pressure from customers to reduce prices, and competition remains intense, particularly in Asia. This pricing pressure has
affected, and could continue to adversely affect, our gross margins. If demand for our high-performance, higher margin products does not increase in the future, our gross margins and
operating results may be worse than expected. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_our_failure_to_respond_timely___our06710"> </A>
<A NAME="toc_ci12701_11"> </A>
<BR></FONT><FONT SIZE=2><B>  Our failure to respond timely or adequately to market changes may render our existing technology less competitive or obsolete, and our operating results may suffer.    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The market for our products is characterized by continuing product development and changing technologies. The success of our business depends in part
upon our ability to maintain and enhance our technological capabilities, develop and market products and services that meet changing customer needs and successfully anticipate or respond to
technological product platform changes on a cost-effective and timely basis. There can be no assurance that we will effectively respond to the technological product requirements of the
changing market, including having sufficient cash flow to make additional capital expenditures that may be required as a result of those changes. To the extent we are unable to respond to such
technological product requirements, our operating results may suffer. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_our_customers_require_our_prod__our01129"> </A>
<A NAME="toc_ci12701_12"> </A>
<BR></FONT><FONT SIZE=2><B>  Our customers require our products to undergo a lengthy and expensive qualification process which does not assure follow-on product sales. If we are unsuccessful  or delayed in qualifying any of our products with a
customer, our business and operating results would suffer.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In general, OEMs&nbsp;require that our products undergo an extensive qualification process, which may involve testing of our products for
performance and reliability. This qualification process may continue for several months or even up to one year in certain cases. Moreover, qualification of a product by a customer does not assure any
sales of the product to that customer. After our products are qualified, it can take several months or more before the customer commences volume production of components or systems that incorporate
our products. Despite these uncertainties, we devote substantial resources, including design, engineering, sales, marketing and management efforts, to qualifying our products with customers in
anticipation of sales. If we are unsuccessful or delayed in qualifying any of our products with a customer, sales of those products to the customer may be precluded or delayed, which may impede our
growth and cause our business to suffer. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, we work closely with OEMs&nbsp;to develop products that are well suited to their changing needs. We will not recover the cost of this product development directly even if we are
actually engaged as a supplier to an OEM's product line, and there can be no guarantee that such collaborations will result in any sales of our products to such OEM. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_our_products_may_contain_desig__our05731"> </A>
<A NAME="toc_ci12701_13"> </A>
<BR></FONT><FONT SIZE=2><B>  Our products may contain design or manufacturing defects, which could result in reduced demand for our services and liability claims against us.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We manufacture products that are highly complex and need to meet increasingly demanding technical and quality requirements. These products may
contain design or manufacturing errors or failures, despite our quality control and quality assurance efforts. Defects in the products we manufacture, whether caused by a design, manufacturing, or
materials failure or error, may result in delayed shipments, customer dissatisfaction, a reduction or cancellation of purchase orders, or liability claims against us. If these defects occur frequently
or in large quantities, our reputation may be impaired. Although our invoices and sales </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>14 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>arrangements
contain provisions designed to limit our exposure to product liability and related claims, existing or future laws or unfavorable judicial decisions could negate these provisions. Product
liability
litigation against us, even if it were unsuccessful, would be time-consuming and costly to defend. We may not maintain technology errors and omissions insurance at any given time for all
or certain of our operations, and we may not be able to purchase such insurance coverage in the future on terms that are satisfactory to us, if at all. Moreover, such coverage may not be sufficient to
cover actual losses. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_we_face_intense_competition_in__we_08375"> </A>
<A NAME="toc_ci12701_14"> </A>
<BR></FONT><FONT SIZE=2><B>  We face intense competition in the PCB materials industry, including from diversified manufacturers and suppliers, which could negatively impact our results of operations  and cause our market share to decline.    <BR>
</B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The PCB materials industry is intensely competitive, and we compete worldwide in the markets for such materials. Our principal competitors are
substantially larger and have greater financial resources than us, and our operating results may be affected by our ability to maintain our competitive positions in these markets. Some of our
competitors and potential competitors may have advantages over us, including: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>greater
financial and manufacturing resources that can be devoted to the development, production, and sale of their products;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>more
established and broader sales and marketing channels;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>manufacturing
facilities that are located in countries with lower production costs;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>more
manufacturing facilities worldwide, some of which are closer in proximity to PCB fabricators;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>lower
capacity utilization, which in peak market conditions can result in shorter lead times to customers;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>ability
to add additional capacity faster or more efficiently;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>preferred
vendor status with existing and potential customers;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>greater
name recognition; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>larger
customer bases. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, these competitors may respond more quickly to new or emerging technologies, adapt more quickly to changes in customer requirements or devote greater resources to the development,
promotion, and sale of their products than we do. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_consolidation_trends_among_our__con03164"> </A>
<A NAME="toc_ci12701_15"> </A>
<BR></FONT><FONT SIZE=2><B>  Consolidation trends among our customers could adversely affect our business.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In recent years, a number of our customers have consolidated and further consolidation of customers may continue. If an existing customer is not the
controlling entity of the supply chain function following a consolidation, we may not be retained as a preferred or approved supplier. In addition, product duplication could result in the termination
of a product line that we currently support. While there is potential for increasing our position with the combined customer, our revenues may decrease if we are not retained as a supplier. We may
also be subject to increased pricing pressure from the combined customer because of its increased market share. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_our_international_sales_and_op__our04916"> </A>
<A NAME="toc_ci12701_16"> </A>
<BR></FONT><FONT SIZE=2><B>  Our international sales and operations subject us to additional risks that could adversely affect our operating results.    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>We derive, and expect to continue to derive, a significant portion of our revenue from international sales in various Asian and European markets.
Moreover, we manufacture a significant portion of our products in </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>15 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


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<P style="font-family:times;text-align:justify"><FONT SIZE=2>manufacturing
facilities outside of the United States. Our international revenue and operations are subject to a number of material risks, including, but not limited to: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>difficulties
in staffing, managing and supporting operations in multiple countries;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>rising
costs of labor in certain countries;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>difficulties
in enforcing agreements and collecting receivables through foreign legal systems and other relevant legal issues;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>fewer
legal protections for intellectual property;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>foreign
and U.S. taxation issues and international trade barriers;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>difficulties
in obtaining any necessary governmental authorizations for the export of our products to certain foreign jurisdictions;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>potential
fluctuations in foreign economies;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>government
currency control and restrictions on repatriation of earnings;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>fluctuations
in the value of foreign currencies and interest rates;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>general
economic and political conditions in the markets in which we operate;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>domestic
and international economic or political changes, social unrest, hostilities and other disruptions in regions where we currently operate or may operate in
the future; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>different
and changing legal and regulatory requirements in the jurisdictions in which we currently operate or may operate in the future. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Negative
developments in any of these areas in one or more countries could result in a reduction in demand for our products, the cancellation or delay of orders already placed, threats to our
intellectual property, difficulty in collecting receivables, and a higher cost of doing business, any of which could negatively impact our business, financial condition or results of operations.
Moreover, our sales, including sales to customers outside the United States, are primarily denominated in U.S. dollars, and downward fluctuations in the value of foreign currencies relative to the
U.S. dollar may make our products more expensive than other products, which could harm our business. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
operate in countries that have experienced political unrest or instability or government controls over the conduct of business, including China and countries in Southeast Asia. Recently, in China,
labor disputes and strikes based partly on wages have slowed or stopped production at certain manufacturers. In some cases, employers have responded by significantly increasing the wages of workers at
such plants. In addition, regulatory authorities and others have increased their scrutiny of labor conditions in countries in which we operate. To the extent such developments result in more
burdensome labor laws and regulations or require us to increase the wages of employees, our ability to adequately staff our plants and the costs associated with the manufacture and shipping of our
products
in those jurisdictions could be adversely affected, which would have a material adverse effect on our business and operating results. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ci12701_our_leverage_and_our_debt_serv__our03218"> </A>
<A NAME="toc_ci12701_17"> </A>
<BR></FONT><FONT SIZE=2><B>  Our leverage and our debt service obligations may adversely affect our cash flow.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As of July&nbsp;2, 2011, we had total indebtedness of approximately $543.9&nbsp;million, and a stockholders' deficiency of $417.9&nbsp;million.
After giving effect to the application of the proceeds from this offering (at an assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the midpoint of the range set forth on
the cover
of this prospectus) and the proceeds of the new term loan we expect to enter into at the closing of this offering, as set forth in "Use of Proceeds", we expect our total indebtedness to be
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>16 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our indebtedness and resulting financial leverage could have significant negative consequences, including: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>increasing
our vulnerability to general adverse economic and industry conditions;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>requiring
the use of a substantial portion of our cash flow from operations to service our indebtedness, thereby reducing the amount of cash flow available for other
purposes, including capital expenditures;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>limiting
our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>placing
us at a possible competitive disadvantage to less leveraged competitors and competitors that have better access to capital resources. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
current credit agreements contain financial and operating covenants that limit our management's discretion with respect to certain business matters. Among other things, these covenants restrict
our ability and our subsidiaries' ability to incur additional debt, create liens or other encumbrances, make investments, change the nature of our business, sell or otherwise dispose of assets and
merge or consolidate with other entities. At the end of fiscal 2010, we were in compliance with these covenants. If we are not able to comply with all of these covenants, for any reason, some or all
of our outstanding debt could become immediately due and payable. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_if_we_fail_to_protect,_or_incu__if_07435"> </A>
<A NAME="toc_ck12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  If we fail to protect, or incur significant costs in defending, our intellectual property and other proprietary rights, our business and results of operations could be  materially harmed.    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our success depends in part on our ability to protect our intellectual property and other proprietary rights. We rely primarily on patents,
trademarks, copyrights, trade secrets and unfair competition laws to protect our intellectual property and other proprietary rights. Significant technology used in our products, however, is not the
subject of any patent protection, and we may be unable to obtain patent protection on such technology in the future. Moreover, existing U.S. legal standards relating to the validity, enforceability
and scope of protection of intellectual property rights offer only limited protection, may not provide us with any competitive advantages, and may be challenged by third parties. In addition, the laws
of foreign countries in which we manufacture and market our products may afford little or no effective protection of our intellectual property. Accordingly, despite our efforts, we may be unable to
prevent third parties from infringing upon or misappropriating our intellectual property or otherwise gaining access to our technology. In addition to the legal methods that we use to protect our
intellectual property described above, we may elect to manufacture certain of our products in the United States, where manufacturing costs are higher, in order to better protect our intellectual
property. Unauthorized third parties may try to copy or reverse engineer our products or portions of our products or otherwise obtain and use our intellectual property. This could result in third
parties manufacturing and selling competitive products that employ our technologies. If we fail to protect our intellectual property and other proprietary rights, our business, results of operations
or financial condition could be materially harmed. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, defending our intellectual property rights may entail significant expense. We have, from time to time, resorted to legal proceedings to protect our intellectual property and may continue
to do so in the future. Any of our intellectual property rights may be challenged by others or invalidated through administrative processes or litigation. If we resort to legal proceedings to enforce
our intellectual property rights or to determine the validity and scope of the intellectual property or other proprietary rights of others, the proceedings could result in significant expense to us
and divert the attention and efforts of our management and technical employees, even if we were to prevail. If unsuccessful, these efforts could also result in the limitation or invalidation of the
intellectual property rights we sought to enforce. Finally, during the course of any patent litigation, there may be public announcements of the results of hearings, </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>17 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>motions,
and other interim proceedings or developments in the litigation. If securities analysts or investors regard these announcements as negative, the market price of our ordinary shares may
decline. General proclamations or statements by key public figures may also have a negative impact on the perceived value of our intellectual property. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_we_may_be_sued_by_third_partie__we_07826"> </A>
<A NAME="toc_ck12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  We may be sued by third parties for alleged infringement of their proprietary rights, which could be costly, time-consuming to defend and limit our ability to  use certain technologies in the future.    <BR>
</B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Because our competitors and others actively seek patent protections, we may in the future be subject to claims that our technologies infringe upon
third parties' intellectual property or other proprietary rights. In addition, the vendors from which we license technology used in our products or our customers could become subject to similar
infringement claims. Any claims, with or without merit, could be time-consuming and expensive to defend, and could divert our management's attention away from the execution of our business
plan. Moreover, any settlement or adverse judgment resulting from the claim could require us to pay substantial amounts or obtain a license to continue to use the technology that is the subject of the
claim, or otherwise restrict or prohibit our use of the technology. There can be no assurance that we would be able to obtain a license from the third party asserting the claim on commercially
reasonable terms, or at all; that we would be able to develop alternative technology on a timely basis, if at all; or that we would be able to obtain a license to use a suitable alternative technology
to permit us to continue offering, and our customers to continue using, our affected product. In addition, we may be required to indemnify our vendors or customers for third-party intellectual
property infringement claims, which would increase the cost to us of an adverse ruling in such a claim. An adverse determination could also prevent us from offering our products to others.
Infringement claims asserted against us or our vendors or customers may have a material adverse effect on our business, results of operations or financial condition. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_our_confidentiality_agreements__our06026"> </A>
<A NAME="toc_ck12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  Our confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We rely substantially upon proprietary information, trade secrets and know-how to conduct our manufacturing operations and research and
development activities. We take steps to protect our proprietary rights and information, including the use of confidentiality and other agreements with our employees and consultants and in our
commercial relationships, including with distributors and customers. However, these steps may be inadequate. Confidentiality agreements used in some of our commercial relationships expire after a
stated term. Moreover, our confidentiality agreements may be violated, and there may be no adequate remedy available for any such violation. We cannot assure you that our proprietary information will
be kept confidential or that we can meaningfully protect our trade secrets. Our competitors may independently develop substantially equivalent proprietary information or may otherwise gain access to
our trade secrets, which could adversely affect our ability to compete in the market. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_we_depend_on_the_experience_an__we_07153"> </A>
<A NAME="toc_ck12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  We depend on the experience and expertise of our senior management team and key technical employees, and the loss of any key employee may impair our ability to operate  effectively.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our success depends upon the continued services of our senior management team and key technical employees, particularly in our research and
development department. Each of our executive officers, key technical personnel and other employees could terminate his or her relationship with us at any time. The loss of any member of our senior
management team might significantly delay or prevent the achievement of our business objectives and could materially harm our business and customer relationships. In addition, because of the highly
technical nature of our business, the loss of any significant number of our existing </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>18 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>engineering
and project management personnel could have a material adverse effect on our business and operating results. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Furthermore,
our manufacturing process requires a skilled labor force. Although we are not generally dependent on any one employee or a small number of employees involved in our manufacturing process,
we have in the past experienced periods of high employee turnover and may in the future experience significantly high employee turnover at our Asian facilities. If we are not able to replace these
people with new employees with comparable capabilities, our operations could suffer as we may be unable to keep up with innovations in the industry or the demands of our customers. As a result, we may
not be able to continue to compete effectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_unfavorable_tax_law_changes,_u__unf00159"> </A>
<A NAME="toc_ck12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  Unfavorable tax law changes, unfavorable government reviews of our tax returns, changes in our geographical earnings mix, or imposition of withholding taxes on repatriated  earnings could adversely affect our effective
tax rate and our operating results.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our operations are subject to income and transaction taxes in the United States and other jurisdictions. A change in the tax laws in the
jurisdictions in which we do business, including an increase in tax rates or an adverse change in the treatment of an item of income or expense, could result in a material increase in the amount of
taxes we incur. In particular, proposals have been made to change certain U.S. tax laws relating to foreign entities with U.S. connections. Legislation has been proposed that would require treating
certain foreign corporations as U.S. domestic corporations (and therefore taxable on all of their worldwide income) if the management and control
of the foreign corporation occurs, directly or indirectly, primarily within the United States. In addition, the U.S. government has proposed various other changes to the U.S. international tax system,
certain of which could adversely impact foreign-based multinational corporate groups, and increased enforcement of U.S. international tax laws. Although these U.S. tax law changes may not be enacted
in their current forms, it is possible that these or other changes in the U.S. tax laws could significantly increase our U.S. income tax liability in the future. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
are subject to periodic audits or other reviews by tax authorities in the jurisdictions in which we conduct our activities. Audits can result in increased tax payments, penalties and interest,
which would affect our results of operation and cash position. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Because
we conduct operations in multiple jurisdictions, our effective tax rate is influenced by the amounts of income and expense attributed to each such jurisdiction. If such amounts were to change
so as to increase the amounts of our net income subject to taxation in higher-tax jurisdictions, or if we were to commence operations in jurisdictions assessing relatively higher tax
rates, our effective tax rate could be adversely affected. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, we may determine that it is advisable from time to time to repatriate earnings from subsidiaries, under circumstances which could give rise to the imposition of potentially significant
withholding taxes by the jurisdictions in which such amounts were earned, without our receiving the benefit of any offsetting tax credits, which also could adversely impact our effective tax rate. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_we_are_subject_to_risks_of_currency_fluctuations."> </A>
<A NAME="toc_ck12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  We are subject to risks of currency fluctuations.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A portion of our cash and other current assets is held in currencies other than the U.S. dollar. As of the end of fiscal 2010, we had approximately
$36.7&nbsp;million of current assets held by subsidiaries with a functional currency other than the U.S. dollar. Changes in exchange rates among other currencies and the U.S. dollar will affect the
value of these assets as translated to U.S. dollars in our balance sheet. To the extent that we ultimately decide to repatriate some portion of these funds to the United States, the actual value
transferred could be impacted by movements in exchange rates. Any such type of movement could negatively impact the </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>19 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>amount
of cash available to fund operations or to repay debt. Significant inflation or disproportionate changes in foreign exchange rates could occur as a result of general economic conditions, acts
of war or terrorism, changes in governmental monetary or tax policy, or changes in local interest rates. The impact of future exchange rate fluctuations between the U.S. dollar and other currencies
cannot be predicted. To the extent that we may have outstanding indebtedness denominated in other currencies,
the appreciation of other currencies against the U.S. dollar will have an adverse impact on our financial condition and results of operations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_our_failure_to_comply_with_the__our06861"> </A>
<A NAME="toc_ck12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  Our failure to comply with the requirements of environmental laws could result in litigation, fines and revocation of permits necessary to our manufacturing processes.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our operations are regulated under a number of international, federal, state, local, and foreign environmental and safety laws and regulations that
govern, among other things, the discharge of hazardous materials into the air and water, as well as the handling, storage, and disposal of such materials. Because we use hazardous materials and
generate hazardous wastes in our manufacturing processes, we may be subject to potential financial liability for costs associated with the investigation and remediation of our own sites, or sites at
which we have arranged for the disposal of hazardous wastes, if such sites become contaminated. Even if we fully comply with applicable environmental laws and are not directly at fault for the
contamination, we may still be liable. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Any
material violations of environmental laws or failure to maintain required environmental permits could subject us to fines, penalties, and other sanctions, including the revocation of our effluent
discharge permits, which could require us to cease or limit production at one or more of our facilities, and harm our business, results of operations, and financial condition. Even if we ultimately
prevail, environmental lawsuits against us would be time consuming and costly to defend. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Environmental
laws could become more stringent over time, imposing greater compliance costs and increasing risks and penalties associated with violation. We operate in environmentally sensitive
locations, and we are subject to potentially conflicting and changing regulatory agendas of political, business, and environmental groups. We are increasingly required to certify compliance with
various material content restrictions in our products based on laws of various jurisdictions or territories such as the Restriction of Hazardous Substances ("RoHS") and Registration, Evaluation,
Authorization and Restriction of Chemicals ("REACH") directives in the European Union and China's RoHS legislation. In addition, our customers or the OEMs they supply may adopt more stringent
environmental requirements for their products in response to political or social pressure. Changes or restrictions on discharge limits, emissions levels, material storage, handling or disposal or
increasingly stringent certification requirements might require a high level of unplanned capital investment or facility or materials relocation. It is possible that environmental compliance costs and
penalties from new or existing regulations may harm our business, results of operations, and financial condition. See "Management's Discussion and Analysis of Financial Condition and Results of
Operations&#151;Legal Proceedings". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_our_business_and_operations_co__our03427"> </A>
<A NAME="toc_ck12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  Our business and operations could be adversely impacted by climate change initiatives.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our manufacturing processes require that we purchase significant quantities of energy from third parties, which results in the generation of
greenhouse gasses, either directly on-site or indirectly at electric utilities. Both domestic and international legislation to address climate change by reducing greenhouse gas emissions
and establishing a price on carbon could create increases in energy costs and price volatility. Considerable international attention is now focused on development of an international policy framework
to guide international action to address climate change. Proposed and existing legislative efforts to control or limit greenhouse gas emissions could affect our energy source and supply choices as
well as increase the cost of energy and raw materials derived from sources that generate greenhouse gas emissions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>20 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_damage_to_our_manufacturing_fa__dam04680"> </A>
<A NAME="toc_ck12701_9"> </A>
<BR></FONT><FONT SIZE=2><B>  Damage to our manufacturing facilities due to fire, natural disaster, or other events could harm our financial results.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We have manufacturing facilities in the United States in Arizona, California and South Carolina. We also have manufacturing facilities in Germany,
Italy, China, Singapore, Malaysia and Taiwan. The destruction or closure of any of our facilities for a significant period of time as a result of fire, explosion, blizzard, act of war or terrorism,
flood, tornado, earthquake, lightning, or other natural disaster could harm us financially, increasing our costs of doing business and limiting our ability to deliver our products on a timely basis. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_we_may_engage_in_future_acquis__we_07663"> </A>
<A NAME="toc_ck12701_10"> </A>
<BR></FONT><FONT SIZE=2><B>  We may engage in future acquisitions or dispositions that could disrupt our business, cause dilution to our shareholders or adversely impact our financial condition and  operating results.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In the future we may acquire companies or assets of companies or dispose of portions of our business in order to enhance our market position or
strategic strengths. We are not currently a party to any agreements or commitments, and we have no understandings with respect to any such acquisitions or dispositions. We may not be able to find
suitable acquisition candidates, and we may not be able to complete acquisitions or dispositions on favorable terms, if at all, even after devoting substantial resources to them. If we do complete
acquisitions or dispositions, we cannot be sure that they will ultimately strengthen our competitive position or that they will not be viewed negatively by customers, financial markets, or investors.
In addition, any acquisitions that we make could lead to difficulties in integrating personnel and operations from the acquired businesses and in retaining and motivating key personnel from these
businesses. Acquisitions or dispositions may disrupt our ongoing operations, divert management from day-to-day responsibilities, increase our expenses, and adversely impact our
operating results or financial condition. Future acquisitions may reduce our cash available for operations and other uses and could result in an increase in amortization expense related to
finite-lived intangible assets acquired, potentially dilutive issuances of equity securities, or the incurrence of debt, any of which could adversely affect our financial condition and operating
results. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_we_will_incur_significantly_in__we_07329"> </A>
<A NAME="toc_ck12701_11"> </A>
<BR></FONT><FONT SIZE=2><B>  We will incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance  initiatives.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We have never operated as a public company. As a public company, we will incur significant legal, accounting and other expenses that we did not incur
as a private company. In preparation for our initial public offering, we have increased our personnel devoted to legal, accounting and human resources matters and have implemented additional
procedures to improve compliance and effectiveness in these functional areas. In addition, the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act of 2010, and rules subsequently implemented
and yet to be implemented by the Securities and Exchange Commission and Nasdaq have imposed and will impose various new requirements on public companies, including requiring changes in corporate
governance practices. Our management and other personnel will need to devote a substantial amount of time to these new compliance initiatives. Moreover, these rules and regulations will increase our
legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect these new rules and regulations to make it more difficult and more
expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, the Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, we must
perform system and process evaluation and testing of our internal control over financial reporting to allow management and our independent registered public accounting firm to report on the
effectiveness of our internal control over financial reporting, as required by Section&nbsp;404 of the Sarbanes-Oxley Act. Compliance </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>21 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>will
require us to increase our general and administrative expense in order to pay added compliance personnel, outside legal counsel and public accountants to assist us in, among other things,
external reporting, instituting and monitoring a more comprehensive compliance function and board governance function, establishing and maintaining internal controls over financial reporting in
accordance with Section&nbsp;404 of the Sarbanes-Oxley Act, and preparing and distributing periodic public reports in compliance with our obligations under the U.S. federal securities laws. We
currently do not have an internal audit group, and we will evaluate the need to hire additional accounting and financial staff with appropriate public company experience and technical accounting
knowledge. Moreover, if we are not able to comply with the requirements of Section&nbsp;404 in a timely manner, the market price of our stock could decline and we could be subject to sanctions or
investigations by Nasdaq, the Securities and Exchange Commission or other regulatory authorities, which would require additional financial and management resources. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_we_have_identified_a_material___we_06223"> </A>
<A NAME="toc_ck12701_12"> </A>
<BR></FONT><FONT SIZE=2><B>  We have identified a material weakness in our internal control over financial reporting. If we fail to develop or maintain an effective system of internal controls, we may  not be able to accurately report our financial
results or prevent fraud. As a result, current and potential shareholders could lose confidence in our financial reporting, which would harm our business  and the trading price of our stock.    <BR>
</B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>During the preparation of our consolidated financial statements for fiscal 2010, we and our independent registered public accounting firm identified
deficiencies in our internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board. These internal control deficiencies resulted in
material adjustments to our previously issued consolidated financial statements for fiscal 2004 through 2009, as well as to our consolidated financial statements for fiscal 2010 that were subsequently
issued, and affected the periods covered by such statements. Management determined the control deficiencies constitute a material weakness in our internal control over financial reporting. See
"Management's Discussion and Analysis of Financial Condition and Results of Operations&#151;Internal Control Over Financial Reporting". </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
are in the process of remediating the material weakness, but we have not yet been able to complete our remediation efforts. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations&#151;Internal Control Over Financial Reporting". It will take additional time to design, implement and test the controls and procedures required to enable our management
to conclude that our internal control over financial reporting is effective. We cannot at this time estimate how long it will take to complete our remediation efforts or the cost of those efforts. We
cannot assure you that measures we plan to take will be effective in mitigating or preventing significant deficiencies or material weaknesses in our internal control over financial reporting. Any
failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could result in additional material weaknesses or cause us to fail to meet
our periodic reporting obligations. Beginning with our Annual Report on Form&nbsp;10-K for our 2012 fiscal year ending December&nbsp;29, 2012 (to be filed in early 2013) when the SEC's
rules under Section&nbsp;404 of Sarbanes-Oxley become applicable to us, such a failure could also result in a conclusion that our internal controls over financial reporting were not effective. The
existence of a material weakness could result in errors in our financial statements that could result in further restatements of our financial statements, cause us to fail to meet our reporting
obligations and cause investors to lose confidence in our reported financial information, leading to a decline in the trading price of our stock. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_we_are_subject_to_the_foreign___we_05933"> </A>
<A NAME="toc_ck12701_13"> </A>
<BR></FONT><FONT SIZE=2><B>  We are subject to the Foreign Corrupt Practices Act ("FCPA"). A determination that we violated this act may affect our business and operations adversely.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We are subject to the regulations imposed by the FCPA, which generally prohibits companies that are publicly listed in the U.S. and their
intermediaries from making improper payments to foreign officials for </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>22 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>the
purpose of obtaining or keeping business. In connection with our initial public offering, we are implementing policies and procedures to train our personnel in FCPA compliance matters. Any
determination that we have violated the FCPA could have a material adverse effect on our financial position, operating results and cash flows. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_risks_related_to_this_offering__ris02774"> </A>
<A NAME="toc_ck12701_14"> </A>
<BR></FONT><FONT SIZE=2><B>  RISKS RELATED TO THIS OFFERING AND OWNERSHIP OF OUR ORDINARY SHARES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_we_are_controlled_by_the_spons__we_03265"> </A>
<A NAME="toc_ck12701_15"> </A></FONT> <FONT SIZE=2><B>  We are controlled by the Sponsors, whose interests may not be aligned with yours.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prior to the completion of this offering, the Sponsors own, directly or indirectly,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our outstanding ordinary shares. After giving
effect to this offering, assuming an offering of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares, the Sponsors will control, directly or indirectly,
approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our ordinary shares, assuming no
exercise of the underwriters' option to purchase additional shares. In addition, at the completion of this offering, we will enter into a shareholders agreement with our Sponsors that will give each
of TPG Capital and Oaktree the right to nominate representatives to our board of directors, and require all of our Sponsors to vote for the election of these nominees to our board of directors, so
long as TPG Capital and Oaktree own specified percentages of our outstanding voting securities. See "Certain Relationships and Related Party Transactions&#151;Agreements with Our
Sponsors&#151;Shareholders and Registration Rights Agreement". As a result, the Sponsors will continue to be able to control the election of our directors, determine our corporate and
management policies and determine, without the consent of our other shareholders, the outcome of any corporate transaction or other matter submitted to our shareholders for approval, including
potential mergers or acquisitions, asset sales and other significant corporate transactions. The Sponsors will also have sufficient voting power to amend our organizational documents. The interests of
the Sponsors may not coincide with the interests of other holders of our ordinary shares. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Furthermore,
each of the Sponsors is in the business of making investments in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with
us. The Sponsors may also pursue, for their own accounts, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to
us. Our memorandum and articles of association do not prohibit the Sponsors, or any of their respective officers, directors, agents, employees, shareholders, members, partners, affiliates and
subsidiaries, or any of our directors, from acquiring an interest or expectancy in corporate opportunities, and do not impose upon such persons or entities any duty to disclose such potential
corporate opportunities to us or refrain from competing with us, even if such opportunities are ones we or our subsidiaries might reasonably be deemed to have pursued or had the desire to pursue.
Furthermore, such persons or entities may take such corporate opportunities for themselves or offer them to other persons or entities. Our Sponsors may also consider combining our operations with
those of another company. So long as the Sponsors continue to own a significant amount of our outstanding ordinary shares, they will continue to be able to strongly influence or effectively control
our decisions, including potential mergers or acquisitions, asset sales and other significant corporate transactions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_we_will_be_a__controlled_compa__we_07119"> </A>
<A NAME="toc_ck12701_16"> </A>
<BR></FONT><FONT SIZE=2><B>  We will be a "controlled company" within the meaning of Nasdaq rules and, as a result, will qualify for and will rely on exemptions from certain corporate governance  requirements.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>After completion of this offering, the Sponsors will continue to control a majority of the voting power of our outstanding ordinary shares. As a
result, we will be a "controlled company" within the meaning of the corporate governance standards of Nasdaq. Under Nasdaq rules, a company of which more than 50% of the voting power is held by a
person or group of persons acting together is a "controlled company" and may </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>23 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>elect
not to comply with certain corporate governance requirements of Nasdaq, including the requirements that: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>a
majority of the board of directors consist of independent directors;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee's purpose and
responsibilities;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
compensation committee be composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>there
be an annual performance evaluation of the nominating and corporate governance and compensation committees. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
have adopted charters for our audit, nominating and corporate governance and compensation committees, intend to conduct annual performance evaluations for these committees, and initially expect all
of our committee members and a majority of our board of directors to be considered independent directors under the independence criteria of Nasdaq. Although we intend to comply with these listing
requirements whether or not we are a controlled company, there is no guarantee that we
will not take advantage of the exemptions available to "controlled companies" in the future. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject
to all of the corporate governance requirements of Nasdaq. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_shareholder_rights_under_cayma__sha08649"> </A>
<A NAME="toc_ck12701_17"> </A>
<BR></FONT><FONT SIZE=2><B>  Shareholder rights under Cayman Islands law may differ materially from shareholder rights in the United States, which could adversely affect the ability of us and our  shareholders to protect our and their interests.
<BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We are a company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association,
by the Companies Law (2010 Revision) of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders
and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law in the Cayman Islands is
derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority but are not binding on
a court in the Cayman Islands. In particular, some states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate laws. Moreover, we could be involved in a
corporate combination in which dissenting shareholders would have no rights comparable to appraisal rights which would otherwise ordinarily be available to dissenting shareholders of United States
corporations. Also, our Cayman Islands counsel is not aware of a significant number of reported class actions or derivative actions having been brought in Cayman Islands courts. Such actions are
ordinarily available in respect of United States corporations in U.S. courts. Finally, Cayman Islands companies may not have standing to initiate shareholder derivative action before the federal
courts of the United States. As a result, our public shareholders may face different considerations in protecting their interests in actions against the management, directors or the Sponsors than
would shareholders of a corporation incorporated in a jurisdiction in the United States, and our ability to protect our interests may be limited if we are harmed in a manner that would otherwise
enable us to sue in a United States federal court. See "Description of Share Capital&#151;Differences in Corporate Law". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>24 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_certain_provisions_of_our_char__cer04892"> </A>
<A NAME="toc_ck12701_18"> </A>
<BR></FONT><FONT SIZE=2><B>  Certain provisions of our charter documents could discourage, delay or prevent a merger or acquisition at a premium price.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our memorandum and articles of association will contain provisions that: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>permit
us to issue, without any further vote or action by our shareholders, 25,000,000 preferred shares in one or more series and, with respect to each series, to
fix the number of shares constituting the series and the designation of the series, the voting powers (if any) of the shares of such series, and the preferences and other special rights, if any, and
any qualifications, limitations or restrictions, of the shares of the series; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>at
such time as we are no longer a "controlled company", will allow our board of directors to establish a classified board, and limit the ability of shareholders to
call extraordinary general meetings or act by written consent in lieu of a meeting (we believe that such action by written consent would be impractical after the consummation of this offering, even
while we are a "controlled company," because it requires unanimous shareholder approval under the laws of the Cayman Islands). </FONT></DD></DL>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
foregoing provisions may impose various impediments to the ability of a third party to acquire control of us, even if a change in control would be beneficial to our existing shareholders. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_as_a_holder_of_the_ordinary_sh__as_06708"> </A>
<A NAME="toc_ck12701_19"> </A>
<BR></FONT><FONT SIZE=2><B>  As a holder of the ordinary shares, you may have difficulty obtaining or enforcing a judgment against us because we are incorporated under the laws of the Cayman Islands.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Because we are a Cayman Islands company, there is uncertainty as to whether the Grand Court of the Cayman Islands would recognize or enforce
judgments of United States courts obtained against us predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original
actions brought in the Cayman Islands against us predicated upon the securities laws of the United States or any state thereof. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_an_active_trading_market_for_o__an_06565"> </A>
<A NAME="toc_ck12701_20"> </A>
<BR></FONT><FONT SIZE=2><B>  An active trading market for our ordinary shares may not develop, and you may not be able to sell your ordinary shares at or above the initial public offering price.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prior to this offering, there has been no public market for our ordinary shares. Although we have applied to have our ordinary shares quoted on the
Nasdaq Global Market, an active trading market for our ordinary shares may never develop or be sustained following this offering. If no trading market develops, securities analysts may not initiate or
maintain research coverage of our Company, which could further depress the market for our ordinary shares. As a result, investors may not be able to sell their ordinary shares at or above the initial
public offering price or at the time that they would like to sell. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_if_equity_research_analysts_do__if_08272"> </A>
<A NAME="toc_ck12701_21"> </A>
<BR></FONT><FONT SIZE=2><B>  If equity research analysts do not publish research or reports about our business or if they issue unfavorable commentary or downgrade our ordinary shares, the price of our  ordinary shares could decline.    <BR>
</B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The trading market for our ordinary shares will rely in part on the research and reports that equity research analysts publish about us and our
business. We do not control these analysts. The price of our stock could decline if one or more equity analysts downgrade our stock or if those analysts issue other unfavorable commentary or cease
publishing reports about us or our business. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>25 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_the_market_price_of_our_ordina__the05952"> </A>
<A NAME="toc_ck12701_22"> </A>
<BR></FONT><FONT SIZE=2><B>  The market price of our ordinary shares may be volatile, which could result in substantial losses for investors purchasing shares in this offering.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The initial public offering price for our ordinary shares will be determined through negotiations with the underwriters. This initial public offering
price may vary from the market price of our ordinary shares after the offering. Some of the factors that may cause the market price of our ordinary shares to fluctuate include: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
failure of securities analysts to cover our ordinary shares after this offering, or changes in financial estimates or recommendations by analysts;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>actual
or anticipated variations in our or our competitors' operating results;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>failure
by us or our competitors to meet analysts' projections or guidance that we or our competitors may give the market;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>volatility
in our operating performance;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>future
sales of our ordinary shares;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>investor
perceptions of us and the industry;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
public's reaction to our press releases, our other public announcements and our filings with the Securities and Exchange Commission;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>general
economic conditions; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
other factors described elsewhere in these "Risk Factors". </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, if the market for stocks of companies in our industry or the stock market in general experiences a loss of investor confidence, the trading price of our ordinary shares could decline for
reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to class action lawsuits that,
even if unsuccessful, could be costly to defend and a distraction to management. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_we_may_not_be_able_to_obtain_c__we_04712"> </A>
<A NAME="toc_ck12701_23"> </A>
<BR></FONT><FONT SIZE=2><B>  We may not be able to obtain capital when desired on favorable terms, if at all, or without dilution to our shareholders.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We anticipate that the net proceeds of this offering, together with current cash, cash equivalents, cash provided by operating activities and funds
available from our new senior secured credit facility that we expect to enter into concurrent with this offering, including a $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million senior secured term loan with a
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million senior secured revolving credit facility, will be sufficient to meet our current and anticipated needs for general corporate purposes. It is possible, however, that we
may not generate sufficient cash flow from operations or otherwise have the capital resources to meet our future capital needs, refinance our indebtedness or take advantage of acquisition
opportunities. If this occurs, we may need additional financing to execute on our current or future business strategies, including to: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>hire
additional engineers and other personnel;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>develop
new or enhance existing products;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>enhance
our operating infrastructure;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>acquire
complementary businesses or technologies; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>otherwise
respond to competitive pressures. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>If
we raise additional funds through the issuance of convertible debt or equity securities, the percentage ownership of our shareholders could be significantly diluted, and these newly issued
securities may have </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>26 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Risk Factors </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>rights,
preferences or privileges senior to those of existing shareholders, including those acquiring shares in this offering. We cannot assure you that additional financing will be available on terms
favorable to us, or at all. If adequate funds are not available or are not available on acceptable terms, if and when needed, our ability to fund our operations, take advantage of unanticipated
opportunities, develop or enhance our products, or otherwise respond to competitive pressures would be significantly limited. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_a_significant_portion_of_our_t__a_s09006"> </A>
<A NAME="toc_ck12701_24"> </A>
<BR></FONT><FONT SIZE=2><B>  A significant portion of our total outstanding shares may be sold into the public market in the near future, which could cause the market price of our ordinary shares to  drop significantly, even if our business is doing
well.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Sales of a substantial number of our ordinary shares in the public market could occur at any time after the expiration of the lock-up
agreements described in "Underwriters". These sales, or the market perception that the holders of a large number of shares intend to sell shares, could reduce the market price of our ordinary shares.
After this offering, we will have&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares outstanding based on the number of shares outstanding as
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011. This includes
the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares that we
are selling in this offering, which may be resold in the public market immediately. The remaining&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares,
or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our outstanding shares after this offering, will be able
to be sold, subject to any applicable volume limitations under U.S. federal securities laws, in the near future as set forth below. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, the Sponsors have certain registration rights, which they may exercise in order to sell their shares through a registration statement filed by us on their behalf. For more information,
see "Certain Relationships and Related Party Transactions&#151;Agreements with Our Sponsors&#151;Shareholders and Registration Rights Agreement". </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_we_plan_to_offer_stock_awards,__we_05443"> </A>
<A NAME="toc_ck12701_25"> </A>
<BR></FONT><FONT SIZE=2><B>  We plan to offer stock awards, which have the potential to dilute shareholder value and cause the price of our ordinary shares to decline.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We expect to offer stock awards to our directors, officers and employees, some of which may be vested at the time of this offering. If the stock
awards are vested and exercised, and those shares are sold into the public market, the market price of our ordinary shares may decline. In addition, the availability of ordinary shares for award under
any equity incentive plan that we adopt, or the grant of stock awards, may adversely affect the market price of our ordinary shares. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_if_you_purchase_ordinary_share__if_09607"> </A>
<A NAME="toc_ck12701_26"> </A>
<BR></FONT><FONT SIZE=2><B>  If you purchase ordinary shares sold in this offering, you will experience immediate and substantial dilution because our existing holders of ordinary shares paid  substantially less than the initial public offering price
for your shares.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>You will experience immediate and substantial dilution of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in pro forma net tangible book value per share because the price that you
pay will be substantially greater than the net tangible book value per share of the shares you acquire, based on the net tangible book value per share as
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011. This dilution is due
in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their shares. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ck12701_we_do_not_currently_intend_to___we_08193"> </A>
<A NAME="toc_ck12701_27"> </A>
<BR></FONT><FONT SIZE=2><B>  We do not currently intend to pay dividends on our ordinary shares and, consequently, your ability to achieve a return on your investment will depend on appreciation in the  price of our ordinary shares.    <BR>
</B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola Group&nbsp;Ltd. has never declared or paid any cash dividends on its ordinary shares. We currently intend to invest our future earnings, if
any, to fund our growth and do not anticipate paying cash dividends on our ordinary shares in the future. In addition, the instruments currently governing our indebtedness contain covenants that place
limitations on the amount of dividends we may pay. Therefore, you are not likely to receive any dividends on your ordinary shares for the foreseeable future. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>27 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="cm12701_forward-looking_statements"> </A>
<A NAME="toc_cm12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Forward-looking Statements    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>This prospectus contains "forward-looking statements". All statements other than statements of historical fact are "forward-looking"
statements for purposes of the U.S. federal and state securities laws. These statements may be identified by the use of forward-looking terminology such as "anticipate", "believe", "continue",
"could", "estimate", "expect", "intend", "may", "might", "plan", "potential", "predict", "should" or "will" or the negative thereof or other variations thereon or comparable terminology. In
particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance contained in this prospectus under the headings "Prospectus Summary", "Risk
Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" are forward-looking statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are
reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors,
including those discussed in this prospectus under the headings "Prospectus Summary", "Risk Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and
"Business", may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking
statements. Some of the key factors that could cause actual results to differ from our expectations include: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>adverse
developments in the global economy;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
dependence on growth in our customers' businesses;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
ability to remain competitive in the markets we serve;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
inability to continue to develop, manufacture and market innovative, customized products and services that meet customers' requirements for performance and
reliability;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>any
failure of our suppliers to provide us with raw materials;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>termination
of our key contracts, including technology license agreements, or loss of our key customers;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
inability to protect our intellectual property;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
failure to realize anticipated benefits from completed acquisitions, divestitures or restructurings, or the possibility that such acquisitions, divestitures or
restructurings could adversely affect us;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
loss of key employees;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
exposure to foreign currency exchange rate risks;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>terrorist
acts or acts of war; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>other
risks and uncertainties, including those listed under the caption "Risk Factors". </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Given
these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this prospectus are made only as of
the date hereof. We undertake no obligation to update or revise any forward-looking statements, either to reflect new developments, or for any other reason, except as required by law. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>28 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="co12701_use_of_proceeds"> </A>
<A NAME="toc_co12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Use of Proceeds    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We estimate that our net proceeds from this offering, after deducting underwriting discounts and estimated offering expenses, will be
approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, assuming the shares are offered at $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per ordinary share, which is
the midpoint of the estimated offering range set forth on the cover page
of this prospectus. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
intend to use the net proceeds as follows: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of the net proceeds will be used to prepay $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million in aggregate principal amount of indebtedness under our
existing senior secured credit agreement, at a redemption price of 100% plus interest to the prepayment date; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of the net proceeds will be used to prepay $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million in aggregate principal amount of indebtedness under our
mezzanine credit agreement, at a redemption price of 100% plus interest to the prepayment date. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As
of July&nbsp;2, 2011, we had $210.0&nbsp;million aggregate principal amount of secured term loans outstanding under our senior credit agreement which currently bear interest at a rate of 10%
per annum and mature on September&nbsp;30, 2015, and $185.7&nbsp;million aggregate principal amount of unsecured loans outstanding under our mezzanine credit agreement which currently bear
interest at a rate of 16% per annum and mature on March&nbsp;24, 2016. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>After
application of the proceeds of this offering, the remaining balances of the loans under the senior and mezzanine credit agreements will be repaid with borrowings under a new senior secured
credit facility, which we intend to enter into concurrently with the completion of this offering. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table summarizes the estimated sources and uses of proceeds in connection with the sale of ordinary shares by us and borrowings under our new senior secured credit facility consisting of
a $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million senior secured term loan and a $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million senior secured revolving credit facility, assuming this
offering and the refinancing had occurred on
July&nbsp;2, 2011. You should read the following together with the information set forth under "Prospectus Summary&#151;Concurrent Transactions". </FONT></P>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Sources</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in&nbsp;millions)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ordinary shares offered hereby</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>New senior secured credit facility</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total Sources</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="96pt" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Uses</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in&nbsp;millions)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Repay existing secured term loans</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Repay existing unsecured term loans</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total Uses</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>29 </B></FONT></P>

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<!-- ZEQ.=1,SEQ=34,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=481833,FOLIO='29',FILE='DISK108:[11ZAS1.11ZAS12701]CO12701A.;17',USER='KSEAMON',CD='29-OCT-2011;20:06' -->
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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="cq12701_dilution"> </A>
<A NAME="toc_cq12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Dilution    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Dilution represents the difference between the amount per share paid by investors in this offering and the as adjusted net tangible
book value per share of our ordinary shares immediately after this offering. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
net tangible book value as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011 was a surplus of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, or $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per ordinary share. Net tangible book value per share represents the
amount of our total tangible assets less total liabilities, divided by the number of ordinary shares outstanding. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>After
giving effect to our receipt of the estimated net proceeds from our sale of ordinary shares in this offering, and after deducting the underwriting discounts and commissions and other estimated
offering expenses payable by us, our net tangible book value, as adjusted, as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011
would have been $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, or $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per ordinary share. This
represents an immediate increase in net tangible book value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per common share to our existing shareholders and an immediate dilution of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share to new investors
purchasing our ordinary shares in this offering. The following table illustrates this per share dilution to the later investors: </FONT></P>
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<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Initial public offering price per share</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma net tangible book value per share as
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Increase per share attributable to investors purchasing our ordinary shares in this offering</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>As adjusted net tangible book value per share after this offering</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dilution in net tangible book value per share to new investors purchasing our ordinary shares in this offering</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table summarizes, as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011, the number of shares
purchased from us, the total consideration paid or to be paid to us, and the
average price per share paid or to be paid to us by existing shareholders and new investors purchasing our ordinary shares in this offering at an assumed offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share,
which is the midpoint of the price range listed on the cover page of this prospectus, before deducting underwriting discounts and commissions and estimated offering expenses payable by us. As the
table shows, new investors purchasing shares in this offering will pay an average price per share substantially higher than our existing shareholders paid. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="70pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Shares purchased </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Total consideration </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Average price<BR>
per share</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Number</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Percent</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Percent</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=16 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Existing shareholders</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>New investors</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>A $1.00 increase (decrease) in the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share would increase (decrease) the total consideration paid by
new investors by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million and increase (decrease) the percent of total consideration paid by new investors by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
assuming that the number of shares offered by us,
as set forth on the cover of this prospectus, remains the same. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
number of ordinary shares to be outstanding after this offering is based on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary
shares outstanding as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011. Except as otherwise indicated, the discussion
and tables above assume no exercise of the underwriters' option to purchase additional shares, and no exercise of any of our outstanding stock awards. If the underwriters' option to purchase
additional shares is exercised in full, the number of ordinary shares held by existing shareholders will be reduced to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the total </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>30 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Dilution </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>number
of ordinary shares to be outstanding upon completion of this offering which would be increased
to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares, or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%, of the total number
of ordinary shares to be
outstanding upon completion of this offering. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, effective immediately upon the signing of the underwriting agreement for this offering, an aggregate
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of our ordinary shares will be reserved for issuance under our 2011
Equity Incentive Plan. To the extent that any of our outstanding stock awards are exercised, new options are issued under our 2011 Equity Incentive Plan or we issue additional ordinary shares or other
equity securities in the future, there will be further dilution to investors participating in this offering. Furthermore, we may choose to raise additional capital through the sale of equity or
convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>31 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="cs12701_dividend_policy"> </A>
<A NAME="toc_cs12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Dividend Policy    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola Group&nbsp;Ltd. has never declared or paid any cash dividends on its ordinary shares. We currently intend to retain earnings,
if any, to finance the development and growth of our business and do not anticipate paying cash dividends on our ordinary shares in the future. Our payment of any future dividends is restricted by our
current credit agreements. The declaration and payment of dividends also is subject to the discretion of our board of directors and depends on various factors, including our net income, financial
condition, cash requirements, future prospects and other factors deemed relevant by our board of directors. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, under the Companies Law of the Cayman Islands, our board of directors may declare dividends only out of our accumulated net profits, out of share premium, provided that immediately
following the date on which the dividend is to be paid we can pay our debts as they come due in the ordinary course of business, or (subject to the same solvency test as applies to payments from
premium) out of any distributable capital reserve resulting from contributed surplus paid in to us. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>32 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="cu12701_capitalization"> </A>
<A NAME="toc_cu12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Capitalization    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prior to this offering, a substantial amount of the investment in Isola is represented by convertible preferred certificates issued
by Isola's current Luxembourg Holding Company to the Sponsor Limited Partnership, which is controlled by our Sponsors. Immediately prior to this offering, we will reorganize as Isola
Group&nbsp;Ltd., a Cayman Islands company, and all of the outstanding securities of the Luxembourg Holding Company, including the common shares and these convertible preferred certificates, will be
effectively converted into ordinary shares of Isola Group&nbsp;Ltd., as described in "Concurrent Transactions&#151;Corporate Reorganization" (the "Corporate Reorganization and Conversion"). </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table sets forth both our cash and cash equivalents and our capitalization as of July&nbsp;2, 2011: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>on
an actual basis;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>on
a pro forma basis to give effect to the Corporate Reorganization and Conversion;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>on
a pro forma as adjusted basis to give effect to:
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
Corporate Reorganization and Conversion;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
sale of ordinary shares by us in this offering at an assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the midpoint of the range set forth on
the front cover page of this prospectus; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
application of the net proceeds of this offering and our new senior secured credit facility as described under "Use of Proceeds". </FONT></DD></DL>
</DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>This
table should be read in conjunction with our consolidated financial statements and accompanying notes thereto, "Use of Proceeds" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations&#151;Liquidity and Capital Resources" included elsewhere in this prospectus. </FONT></P>
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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>As of July&nbsp;2, 2011 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Actual</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Pro forma</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Pro forma<BR>
as adjusted</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands,<BR>
except per share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>56,010</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Debt and borrowings</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Secured term loans issued under existing senior secured credit agreement, net of unamortized discount of $25.3&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>184,656</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unsecured term loans issued under mezzanine credit agreement, net of unamortized discount of $66.2&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>119,512</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Secured term loans issued under new senior secured credit facility</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Loans issued under new revolving credit facility</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Convertible preferred certificates</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>224,679</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other indebtedness</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,017</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total debt and borrowings</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>543,864</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Stockholders' equity</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Common shares of Isola Group S.a.r.l., &euro;25 par value ($31), 500 shares authorized, issued and outstanding (actual)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ordinary shares of Isola Group&nbsp;Ltd., 100,000,000 shares authorized,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares issued and outstanding (pro forma), and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares issued and outstanding (pro
forma as adjusted)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Additional paid-in capital</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>31,864</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated deficit</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(413,709</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated other comprehensive income&nbsp;/ (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(36,064</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total stockholders' deficiency</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(417,894</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total capitalization</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>125,970</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>33 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=38,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=650317,FOLIO='33',FILE='DISK108:[11ZAS1.11ZAS12701]CU12701A.;18',USER='KSEAMON',CD='29-OCT-2011;20:07' -->
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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="cw12701_selected_historical_co__cw102293"> </A>
<A NAME="toc_cw12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Selected Historical Consolidated Financial and Other Data    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table presents our selected historical consolidated financial and other data. The consolidated statements of operations
data, balance sheet data and other financial data as of and for fiscal 2010, 2009, 2008, 2007 and 2006 are derived from our audited consolidated financial statements which, except for fiscal 2007 and
2006 and balance sheet data as of the end of fiscal 2008, are included elsewhere in this prospectus. The consolidated statements of operations data, balance sheet data and other financial data as of
and for the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010 are derived from our unaudited interim financial statements for those periods included elsewhere in this prospectus and have
been prepared on a basis consistent with the respective audited consolidated financial statements and, in the opinion of management, include all adjustments, consisting of normal, recurring
adjustments, necessary for a fair presentation of that information for such periods. The financial data presented for the interim periods is not necessarily indicative of the results for the full
year. The selected historical consolidated financial and other data below should be read in conjunction with "Use of Proceeds", "Capitalization", "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated financial statements and related notes included elsewhere in this prospectus. </FONT></P>
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<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>June&nbsp;26,<BR>
2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2007</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2006<SUP>(3)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=24 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><B> </B>&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=20 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands, except per share amounts)<SUP>(1)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Consolidated Statement of Operations Data:</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Revenues</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>316,583</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>306,957</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>611,987</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>416,140</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>570,333</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>631,233</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>642,622</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Cost of goods sold</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>240,433</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>231,908</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>467,751</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>330,584</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>487,052</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>523,517</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>527,018</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Gross profit</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>76,150</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>75,049</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>144,236</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>85,556</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>83,281</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>107,716</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>115,604</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Operating expenses:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Sales, general and administrative</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>38,371</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>31,343</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>65,271</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>59,656</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>62,763</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>63,875</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>75,141</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Research and development</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,193</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,817</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9,532</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9,244</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10,663</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8,518</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,257</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Restructuring</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,464</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,782</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>18,129</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,692</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,736</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,385</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Goodwill impairment</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Total operating expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>43,741</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>39,624</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>79,585</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>87,029</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>89,631</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>74,129</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>86,783</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Operating income / (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>32,409</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>35,425</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>64,651</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,473</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(6,350</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>33,587</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>28,821</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Other income / (loss)&#151;net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,031</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,005</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,020</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>224</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,768</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,211</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,076</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Embedded derivative gain / (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>17,472</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(58,162</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>25,030</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(27,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>115,352</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>59,707</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(71,582</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Interest expense<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(39,032</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(26,997</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(72,134</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(54,620</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(58,478</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(49,097</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(26,905</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Interest income</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>94</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>159</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>339</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>453</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,307</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,511</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,646</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Foreign exchange gain / (loss)&#150;net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(20,402</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>27,863</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9,596</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(2,116</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(341</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(27,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,929</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Income / (loss) from continuing operations before income taxes</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(8,428</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(18,707</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>29,502</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(85,045</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>54,258</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>22,919</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(71,025</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Provision for income taxes</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(10,679</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(11,818</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(24,420</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(6,504</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(6,804</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(11,136</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(7,807</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Loss from discontinued operations, net of tax</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(9,177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(11,655</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(7,328</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(5,630</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Net income / (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(19,107</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(30,525</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(100,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>35,799</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,455</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(84,462</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Net income / (loss) per common share</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(38.21</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(61.05</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10.16</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(201.45</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>71.60</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8.91</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(168.92</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(38.21</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(61.05</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10.16</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(201.45</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>71.60</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8.91</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(168.92</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Weighted average number of common and common equivalent shares outstanding</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><B>34 </B></FONT></P>

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<!-- ZEQ.=1,SEQ=39,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=930367,FOLIO='34',FILE='DISK108:[11ZAS1.11ZAS12701]CW12701A.;32',USER='KSEAMON',CD='29-OCT-2011;20:07' -->
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Selected Historical Consolidated Financial and Other Data </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> &nbsp;<BR>  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="150%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>As of </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>June&nbsp;26,<BR>
2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2007</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2006</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=22 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><B> </B>&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=20 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Consolidated Balance Sheet Data:</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Cash and cash equivalents</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>56,010</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>58,182</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>36,733</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>38,932</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>74,084</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>88,564</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>83,380</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Current assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>228,537</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>251,300</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>201,208</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>178,362</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>213,435</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>277,742</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>300,160</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Total assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>402,366</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>413,071</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>377,194</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>357,852</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>424,324</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>528,482</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>535,188</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>149,242</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>537,389</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>131,603</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>480,461</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>467,488</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>215,994</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>222,236</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Working capital (deficit)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>79,295</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(286,089</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>69,605</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(302,099</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(254,053</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>61,748</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>77,924</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Long-term debt and capital lease obligations</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>319,784</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>13,968</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>306,547</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>16,408</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>30,254</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>313,325</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>310,463</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Convertible preferred certificates</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>224,679</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>155,860</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>199,136</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>176,595</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>162,567</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>152,700</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>126,565</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Total liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>820,260</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>841,611</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>774,758</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>756,210</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>726,882</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>852,935</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>862,629</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Common stock and additional paid in capital</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>31,879</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>28,978</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>30,667</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>28,175</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>26,418</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>25,196</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>22,846</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Total stockholders' deficiency</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(417,894</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(428,542</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(397,564</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(398,358</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(302,558</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(324,453</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(327,441</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Other Financial Data:</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Adjusted EBITDA<SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
49,180</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
49,186</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
89,661</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
38,983</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
37,647</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
66,170</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
52,956</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

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  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> For factors that may affect the comparability of financial information included in this table to future results of operations, see "Management's Discussion and Analysis of Financial
Condition and Results of Operation&#151;Factors Affecting Comparability".
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Interest expense for the six months ended July&nbsp;2, 2011 was $39.0&nbsp;million (comprised of cash interest expense of $18.0&nbsp;million and non-cash interest
expense of $21.0&nbsp;million). Non-cash interest expense includes the amortization of deferred loan origination costs, the amortization of original issue discount, the accretion of
interest paid-in-kind on our debt under our mezzanine credit agreement and the accretion of interest on our convertible preferred certificates. We intend to use the proceeds of
this offering to reduce our current indebtedness and to refinance the remaining balance of our current indebtedness with $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million borrowed under a new senior secured
credit
facility bearing interest at&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% per annum. If such transactions had occurred as of the end of fiscal 2010, our interest expense for the six months ended July&nbsp;2, 2011 would have
been $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(3)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> We acquired the Polyclad Laminates ("Polyclad") business segment from Cookson Electronics on April&nbsp;21, 2006. The acquisition of Polyclad was accounted for as a
purchase
transaction. Polyclad's operating results have been included since the date of acquisition.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(4)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Adjusted EBITDA is defined as net income / (loss) less (A)&nbsp;loss from discontinued operations, net of tax, plus (B)&nbsp;(i) interest expense and interest income,
 net,
(ii)&nbsp;provision from income taxes, (iii)&nbsp;depreciation and amortization and (iv)&nbsp;certain additional adjustments. These additional adjustments include stock-based compensation,
restructuring charges, foreign exchange gain / (loss)&#150;net, goodwill impairment, management fees paid to TPG Capital, embedded derivatives gain / (loss), gain related to a settlement of a
patent infringement matter and pre-IPO expenses.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><BR></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Adjusted EBITDA is a measure used by management and external users of our consolidated financial statements to evaluate operating performance, but it is not
a recognized term under U.S.&nbsp;GAAP and is not an alternative to net income as a measure of overall financial performance or to Cash Flows from Operating Activities as a measure of cash generated
from operating activities. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow available for management's discretionary use, as it does not consider certain cash
requirements such as for tax payments and debt service requirements, nor does it consider the need for incremental working capital or capital expenditures.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><BR></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> We believe Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance and compare the results of our operations
from period to period and against our peers without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA
because these amounts can vary substantially from company to company within our industry depending on accounting methods and book values of assets, capital structure and the method by which assets
were acquired. We further believe that Adjusted EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an
EBITDA or Adjusted EBITDA measure when reporting their results. We use non-GAAP financial measures to supplement U.S.&nbsp;GAAP measures to provide a further understanding of the factors
and trends affecting the business that U.S.&nbsp;GAAP measures alone can not provide. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable
to other similarly titled measures of other companies.  </I></FONT></DD></DL>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>35 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_cw12701_1_36"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Selected Historical Consolidated Financial and Other Data </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table presents a reconciliation of net income / (loss), the most directly comparable financial measure under U.S.&nbsp;GAAP, to Adjusted EBITDA
for the periods presented. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="150%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="44pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="44pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="44pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="44pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="44pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>June&nbsp;26, 2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2007</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2006</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=22 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><B> </B>&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=20 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Net income / (loss):</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(19,107</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(30,525</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(100,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>35,799</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,455</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(84,462</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Less loss from discontinued operations, net of tax</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9,177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>11,655</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,328</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,630</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Income / (loss) from continuing operations</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(19,107</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(30,525</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(91,549</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>47,454</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>11,783</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(78,832</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Interest expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>39,032</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>26,997</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>72,134</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>54,620</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>58,478</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>49,097</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>26,905</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Interest income</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(94</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(159</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(339</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(453</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,307</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(2,511</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,646</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Provision for income taxes</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10,679</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>11,818</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>24,420</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6,504</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6,804</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>11,136</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,807</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Depreciation and amortization</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8,683</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8,464</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>16,937</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>18,296</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>21,752</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>23,001</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>17,044</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Stock-based compensation</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,212</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>803</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,219</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,757</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,222</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,350</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,752</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Restructuring charges</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,464</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,782</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>18,129</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,692</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,736</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,385</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Foreign exchange translation (gain) / loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>20,402</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(27,863</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(9,596</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,116</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>341</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>27,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,929</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Goodwill impairments</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Management fee expense&#151;TPG Capital</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,024</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,025</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,052</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,050</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,050</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,285</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,030</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Embedded derivative (gain) / loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(17,472</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>58,162</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(25,030</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>27,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(115,352</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(59,707</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>71,582</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Gain related to settlement of a patent infringement matter</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(3,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(3,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Pre-IPO expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,644</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Adjusted EBITDA</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>49,180</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>49,186</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>89,661</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>38,983</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>37,647</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>66,170</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>52,956</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><B>36 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_management_s_discussion_and_an__man03466"> </A>
<A NAME="toc_da12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Management's Discussion and Analysis of Financial Condition and Results of Operations    <BR></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><I>The following discussion and analysis of the financial condition and results of our operations should be read
in conjunction with the consolidated financial statements and related footnotes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified
below, and those discussed in the sections titled "Risk Factors" and "Forward-Looking Statements" included elsewhere in this prospectus. You should read the following discussion together with the
sections titled "Risk Factors", "Selected Historical Consolidated Financial and Other Data" and our consolidated financial statements, including the related footnotes, included elsewhere in this
prospectus.</I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_overview"> </A>
<A NAME="toc_da12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  OVERVIEW    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_business"> </A>
<A NAME="toc_da12701_3"> </A></FONT> <FONT SIZE=2><B>  Business    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola is a leading global material sciences company that designs, develops and manufactures copper-clad laminate ("CCL")
and prepreg (collectively, "laminate materials") used to fabricate advanced multilayer printed circuit boards ("PCBs"). PCBs provide the physical platform for the semiconductors, passive components
and connection circuitry that power and
control virtually all modern electronics. We focus on the market for high-performance laminate materials, developing proprietary resins that are critical to the performance of PCBs used in
advanced electronic applications. We continually invest in research and development and believe that our industry-leading resin formulations, many of which are patented, provide us with a competitive
advantage. With 11 manufacturing facilities and three research centers worldwide, as well as a global sales force, we are the largest supplier of laminate materials to PCB fabricators in the United
States and Europe, and we are one of the larger suppliers in our addressable Asian market, based on revenue for fiscal year 2010. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
high-performance PCB laminate materials are used in a variety of advanced electronics, including network and communications equipment and high-end consumer electronics, as
well as advanced automotive, aerospace, military and medical applications. Demand in these markets is driven by the rapid growth of bandwidth-intensive, high-speed data transmission, the expansion of
the internet, the emergence of cloud computing and the evolution of increasingly complex communications technology. This has led to an urgent need for the development of the underlying infrastructure
to support this growth, including faster and more efficient semiconductor technology. In addition, increasingly pervasive environmental regulations are driving a need for lead-free
compatible, high-performance laminate materials. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
sell our laminate materials globally to leading PCB fabricators, including DDi, Ruwel, Sanmina, TTM Technologies, Viasystems and WUS Printed Circuit. These fabricators produce PCBs incorporating
our laminate materials for electronic equipment designed or produced by a broad group of major original equipment manufacturers, or OEMs, including Alcatel-Lucent, Brocade, Cisco, Google,
Hewlett-Packard, Huawei, IBM and Sun Microsystems (now Oracle). We work closely with these leading PCB fabricators and major OEMs&nbsp;to ensure that our high-performance laminate
materials incorporating our proprietary resins meet the thermal, electrical and physical performance criteria of each new generation of electronic equipment. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>37 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_recession_and_response"> </A>
<A NAME="toc_da12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  Recession and Response    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Over the past three years, we have improved our manufacturing capacity utilization and business processes, focused on designing and manufacturing
higher margin, high-performance products, and refinanced our indebtedness. Many of these improvements were a result of our response to the global recession. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
entered into two credit facilities in 2006, referred to as our first- and second-lien facilities. The leverage covenants set forth in these facilities became more restrictive over time,
requiring periodic increases in our EBITDA (as defined under those facilities) relative to our indebtedness outstanding. At the end of the second quarter of 2008, we were unable to comply with the
tightened covenants. In August 2008, we negotiated amendments to these facilities that provided us with more flexible financial covenants, but also resulted in increased interest expense and
additional loan amortization payments. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
the wake of the global recession that began in 2008, our revenues and EBITDA declined significantly in the last two quarters of 2008, and in January 2009 we notified the lenders under our first-
and second-lien facilities that we had defaulted under the revised leverage covenants and were suspending cash interest payments. With the assistance of an outside advisor, we took
aggressive measures to reduce fixed expenses and cash outflows. The more significant measures were the closure of our manufacturing facilities in Fremont, California, Dalian, China and Bottegone,
Italy, and the transfer of production from these closed facilities to other nearby manufacturing sites. We also suspended matching grants for U.S. employee 401(k) contributions and our annual
company-wide bonus plan and initiated mandatory salary reductions. We estimate that the consolidation of manufacturing and related actions permanently reduced our annual fixed operating
costs by an estimated $30.0&nbsp;million and significantly improved our manufacturing capacity utilization. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>When
global demand for electronic products began to improve in mid-2009, our enhanced operational leverage, in combination with our increased emphasis on higher margin,
high-performance products, led to improved profits and cash flow. In September 2010, based on these improvements, we paid in full the principal and accrued interest on our first- and
second-lien credit facilities from cash on hand and loans under two new credit agreements: a $210.0&nbsp;million senior credit and guaranty agreement, referred to as our senior secured
credit agreement, and a mezzanine credit and guaranty agreement in an initial principal amount of $175.0&nbsp;million, referred to as our mezzanine credit agreement. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Immediately
prior to this offering, Isola Group S.a.r.l. (our current Luxembourg holding company) will reorganize as a Cayman Islands company, Isola Group&nbsp;Ltd. The reorganization is expected to
be a tax-free transaction and the Company does not anticipate that there will be any material income tax expense as a result of the restructuring or any material change to the Company's
ongoing tax position. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_key_financial_measures"> </A>
<A NAME="toc_da12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  KEY FINANCIAL MEASURES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_revenue"> </A>
<A NAME="toc_da12701_6"> </A></FONT> <FONT SIZE=2><B>  Revenue    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Revenue consists primarily of sales of our laminate materials: copper-clad laminates and prepreg. We sell these materials to major PCB fabricators
primarily through our direct global sales force, and we sell to smaller fabricators primarily through third-party distribution arrangements. We have no long-term customer agreements and
sell to customers on a purchase order basis. Consequently, we maintain very little backlog, and our revenue is subject to short-term variability in demand. Although we do not maintain
long-term agreements with our customers, we have developed close relationships with them and the major OEMs&nbsp;that they serve. Through these relationships, we seek to ensure that our
PCB laminate materials are qualified for use in an OEM's product line. In some cases, OEMs&nbsp;may specify Isola laminates as the preferred material. Once a particular PCB laminate material is
"designed in" or qualified for use in a specific product line and one or more particular laminate suppliers are selected, these suppliers tend to remain </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>38 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>suppliers
of choice, even as PCBs for these products change to address OEM product line improvements or extensions or next generation developments. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Revenue
in the laminate materials industry tends to reflect broad economic trends, as well as trends in the semiconductor industry. Historically, revenue has been disproportionally affected (both
positively and negatively) by such trends due to adjustments of inventory levels within the supply chain in response to changing economic conditions. In particular, PCB fabricators tend to discontinue
laminate purchases at the perceived onset of economic downturns and tend to wait to restock supplies until they reach critical levels following recessionary conditions. Revenue was
$570.3&nbsp;million for fiscal 2008, $416.1&nbsp;million for fiscal 2009 and $612.0&nbsp;million for fiscal 2010, and $307.0&nbsp;million for the six months ended June&nbsp;26, 2010 as
compared to $316.6&nbsp;million for the six months ended July&nbsp;2, 2011, reflecting the decline into, and beginning of a recovery from, the global recession. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
sales prices are affected primarily by competitive factors, as well as changing costs of raw materials used in production, especially copper. Copper is a globally traded commodity subject to
ongoing market fluctuations. When feasible, we pass on changes in costs of raw materials to our customers. We believe that the high-performance segment of the PCB materials industry is
more resilient to economic downturns and that customers are generally more willing to absorb, or share, increases in raw materials costs for such products. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
significant percentage of our revenue has historically been concentrated in a limited number of larger customers. While only one of our customers accounted for more than 10% of our revenues in each
of fiscal 2010, fiscal 2009 and fiscal 2008 and the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010, we
believe that our ten largest customers accounted for the majority of our revenues in each of these periods. Though the composition of our top ten customers varies from year to year, we expect that
sales to a limited number of customers will continue to account for a significant percentage of our total revenue for the foreseeable future. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_cost_of_goods_sold"> </A>
<A NAME="toc_da12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  Cost of Goods Sold    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our cost of goods sold includes raw materials, direct and indirect labor and overhead costs such as rent, supplies, and utilities. Cost of goods sold
was $240.4&nbsp;million in the six months ended July&nbsp;2, 2011 (75.9% of total revenue) as compared to $231.9&nbsp;million in the six months ended June&nbsp;26, 2010 (75.6% of total
revenue). Cost of goods sold was $467.8&nbsp;million in fiscal 2010 (76.4% of total revenue), $330.6&nbsp;million in fiscal 2009 (79.4% of total revenue) and $487.1&nbsp;million in fiscal 2008
(85.4% of total revenue). The changes in cost of goods sold as compared to revenue are discussed in the "Gross Margin" section below. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_gross_margin"> </A>
<A NAME="toc_da12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  Gross Margin    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Gross margin, which is gross profit as a percentage of total revenue, has historically been, and is expected in the future to be, affected by a
variety of factors, including the mix of products we sell, competitive pricing pressures, changes in the costs of raw materials (and our ability to pass through these changes to our customers), labor
costs, overhead costs, production volume and manufacturing capacity utilization. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
high-performance products, which address technically challenging applications, typically have higher average selling prices and higher gross margins than our standard products. In
addition, when we provide products on a "quick-turn" basis we are often able to command a pricing premium, which results in higher gross margin than products provided on a standard
lead-time basis. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
overall gross margin was 24.1% in the six months ended July&nbsp;2, 2011 as compared to 24.4% in the six months ended June&nbsp;26, 2010; overall gross margin was 23.6% in fiscal 2010, 20.6%
in fiscal 2009 and 14.6% in fiscal 2008. The first six months of fiscal 2010 were positively impacted by the restocking of our </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>39 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>materials
by PCB manufacturers as economic conditions improved. The improvement in gross margin from fiscal 2008 to fiscal 2010 reflects the operational improvements we made during fiscal 2008 and
2009 and our ongoing focus on higher margin, high-performance products. We expect overall gross margin to continue to improve over time as demand expands in a strengthening economy and
high-performance products become an increasing percentage of our overall revenue. However, our revenues and gross margin will continue to be subject to general economic conditions and
cyclical factors affecting our industry. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_operating_expenses"> </A>
<A NAME="toc_da12701_9"> </A>
<BR></FONT><FONT SIZE=2><B>  Operating Expenses    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our operating expenses include the following: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Sales, general and administrative expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our sales, general and administrative, or SG&amp;A, expense includes expenses incurred in the selling and marketing of our
products to customers, as well as corporate administrative expenses. Sales expenses consist primarily of compensation, benefits and other expenses for sales and marketing personnel, as well as
expenses related to advertising, marketing and trade shows, plus bad debt expense. General and administrative expenses consist primarily of compensation and associated expenses for executive
management, human resources, finance and administrative personnel. SG&amp;A expense was $38.4&nbsp;million in the six months ended July&nbsp;2, 2011 (12.1% of total revenue) as compared to
$31.3&nbsp;million in the six months ended June&nbsp;26, 2010 (10.2% of total revenue). The increase in SG&amp;A expense for the six months ended July&nbsp;2, 2011 was due to higher professional
fees associated with this offering. SG&amp;A expense was $65.3&nbsp;million in fiscal 2010 (10.7% of total revenue), $59.7&nbsp;million in fiscal 2009 (14.3% of total revenue) and $62.8&nbsp;million
in fiscal 2008 (11.0% of total revenue). The percentage reduction in fiscal 2010 compared to fiscal 2009 was primarily attributable to the increase in revenue. We expect SG&amp;A expense to decrease as a
percentage of revenue in the future as the economy continues to strengthen and demand for our products increases. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Research and development expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Research and development, or R&amp;D, expense consists of the compensation, benefits and other expenses of R&amp;D personnel, as well as
other product development
costs, such as direct product design, development and process engineering expenses, legal fees related to the defense of intellectual property and the depreciation of the capital equipment and
facilities used by R&amp;D staff. All R&amp;D costs are recorded as expenses when incurred. Our investments in R&amp;D were $5.2&nbsp;million in the six months ended July&nbsp;2, 2011 (1.6% of total revenue)
as compared to $4.8&nbsp;million in the six months ended June&nbsp;26, 2010 (1.6% of total revenue). R&amp;D expenses were $9.5&nbsp;million in fiscal 2010 (1.6% of total revenue),
$9.2&nbsp;million in fiscal 2009 (2.2% of total revenue), and $10.7&nbsp;million in fiscal 2008 (1.9% of total revenue). We are committed to adding more technical resources to this important
function and expect that R&amp;D expense will increase over time. However, R&amp;D expense as a percentage of our total revenue is expected to decline in the future as demand for our products increases. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Based
on input from OEMs&nbsp;and PCB fabricators, we develop new resin formulations that achieve specific needs for electrical, thermal and physical performance. We undertake very little
exploratory research not directly linked to particular market or customer needs. Our OEM marketing and R&amp;D efforts are tightly integrated, with both functions reporting to our Chief Technology
Officer. However, the expense of these OEM marketing efforts, which we estimate totaled approximately $2.1&nbsp;million in the six months ended July&nbsp;2, 2011 as compared to approximately
$2.0&nbsp;million in the six months ended June&nbsp;26, 2010, and we estimate totaled approximately $4.4&nbsp;million in fiscal 2010, approximately $3.6&nbsp;million in fiscal 2009 and
approximately $3.8&nbsp;million in fiscal 2008, is included in SG&amp;A expense. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Restructuring expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We identify separately the expenses related to restructuring activities, including the cost of site closures and attendant severance
expenses, as well as professional fees incurred in connection with restructuring activities. As described above, in 2008 and 2009 we initiated a number of measures centered on streamlining our
organizational structure, reducing labor costs and improving manufacturing </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>40 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>capacity
utilization. In this regard, we recorded restructuring expenses of $0.2&nbsp;million in the six months ended July&nbsp;2, 2011 as compared to $3.5&nbsp;million in the six months ended
June&nbsp;26, 2010. Restructuring expenses were $4.8&nbsp;million in fiscal 2010, $18.1&nbsp;million in fiscal 2009 and $7.7&nbsp;million in fiscal 2008. Our major restructuring initiatives
have been largely completed. We expect to incur minimal restructuring charges in the remainder of 2011, principally in connection with our reorganization as a Cayman Islands company and immaterial
residual costs associated with various prior site closures. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Goodwill impairment charges.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We test our goodwill asset for possible impairment at least annually and recognize any related losses when incurred. If the carrying
value of goodwill exceeds its fair value, a second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. Circumstances that may lead to impairment of
goodwill include, but are not limited to, the loss of a significant customer or customers and unforeseen reductions in customer demand, future operating performance or industry demand. As a result of
recession-induced reductions in industry demand, we
recognized a goodwill impairment charge in 2008 of $8.5&nbsp;million. This charge eliminated all goodwill from our balance sheet. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_non-operating_expenses"> </A>
<A NAME="toc_da12701_10"> </A>
<BR></FONT><FONT SIZE=2><B>  Non-operating Expenses    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Other income&#151;net.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Other income&#151;net consists of royalty income and other various forms of non-operating income and expenses.
Other income&#151;net was $1.0&nbsp;million in the six months ended July&nbsp;2, 2011, as compared to $3.0&nbsp;million in the six months ended June&nbsp;26, 2010, which included a
$3.0&nbsp;million gain on the successful settlement of an intellectual property dispute. Other income&#150;net was $2.0&nbsp;million in fiscal 2010, $0.2&nbsp;million in fiscal 2009 and
$2.8&nbsp;million in fiscal 2008. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Embedded derivative gain / (loss).</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The conversion feature of our convertible preferred certificates is considered an embedded derivative. In addition, the
mandatory pre-payment features of our senior secured credit agreement and our mezzanine credit agreement are also considered embedded derivatives. The value of each of these embedded
derivatives is measured quarterly, and any changes in the values are reflected in embedded derivative gain / (loss). Changes in the value of these derivatives have no impact on cash flow. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
embedded derivative gain / (loss) associated with the convertible preferred certificates and debt in any period reflects changes in the valuation of our company which we determine with the
assistance of a third party consultant using both income and market approaches to arrive at our enterprise value. The income approach estimates our enterprise value by discounting our expected future
cash flows to present value. The market approach estimates our total enterprise value by comparing our business to similar businesses whose securities are actively traded in public markets, or
businesses that are involved in a public or private transaction. Valuation multiples are derived from trading multiples of public companies that participate in our industry. These valuation multiples
are then applied to the equivalent financial metrics of our business, giving consideration to differences between our company and similar companies for such factors as size, financial leverage, and
growth prospects. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>When
the estimated enterprise value of our company increases from period to period, the value of the embedded derivatives liability associated with the convertible preferred certificates increases and
we record an embedded derivative loss. Conversely, when the estimated enterprise value of our company decreases from period to period, we record an embedded derivative gain. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
embedded derivative gain on the convertible preferred certificates was $11.9&nbsp;million in the six months ended July&nbsp;2, 2011, as compared to a loss of $58.2&nbsp;million in the six
months ended June&nbsp;26, 2010. In fiscal 2010 we recorded an embedded derivative gain of $21.7&nbsp;million, in fiscal 2009 we recorded a loss of $27.5&nbsp;million and in fiscal 2008 we
recorded a gain of $115.4&nbsp;million. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>41 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
embedded derivative gain on loans under the senior secured credit agreement and mezzanine credit agreement was $5.6&nbsp;million for the six months ended July&nbsp;2, 2011, as compared to zero
for the six months ended June&nbsp;26, 2010, which preceded the date of our senior secured credit agreement and mezzanine credit agreement (these credit agreements were effective on
September&nbsp;30, 2010, which fell into our fiscal fourth quarter of 2010). The embedded derivative gain related to the mandatory pre-payment features of our senior secured credit
agreement and mezzanine credit agreement was $3.3&nbsp;million in fiscal 2010. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Interest expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Interest expense consists of cash and non-cash interest expense. Non-cash interest expense includes the amortization of
deferred loan origination costs, the amortization of original issue discount ("OID"), the accretion of interest paid-in-kind ("PIK") on our mezzanine debt and the accretion of
interest on our convertible preferred certificates. See "Description of Indebtedness&#151;Our Existing Credit Agreements". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Total
interest expense was $39.0&nbsp;million in the six months ended July&nbsp;2, 2011, as compared to $27.0&nbsp;million in the six months ended June&nbsp;26, 2010. This $12.0&nbsp;million
increase was primarily due to higher interest rates as well as higher OID amortization. Non-cash interest expense was $21.0&nbsp;million in the six months ended July&nbsp;2, 2011, as
compared to $5.4&nbsp;million in the six months ended June&nbsp;26, 2010. In the six months ended July&nbsp;2, 2011, the non-cash interest included $7.2&nbsp;million of PIK
interest on our mezzanine debt and $5.0&nbsp;million of OID amortization expense, (of which $2.1&nbsp;million was attributable to loans under the senior secured credit agreement and
$2.9&nbsp;million was attributable to loans under the mezzanine agreement), and $1.0&nbsp;million amortization of deferred loan origination costs. Non-cash interest also includes
accreted interest on the convertible preferred certificates of $7.8&nbsp;million in the six months ended July&nbsp;2, 2011 and $4.7&nbsp;million in the six months ended June&nbsp;26, 2010. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Total
interest expense was $72.1&nbsp;million in fiscal 2010, $54.6&nbsp;million in fiscal 2009 and $58.5&nbsp;million in fiscal 2008. Interest expense increased $17.5&nbsp;million in fiscal
2010 compared to fiscal 2009, which amount included $9.5&nbsp;million of "interest on unpaid interest" under the previous first- and
second-lien credit facilities. Non-cash interest expense was $21.2&nbsp;million in fiscal 2010, $11.7&nbsp;million in fiscal 2009 and $20.5&nbsp;million in fiscal 2008.
Of the non-cash interest expense in fiscal 2010, $3.6&nbsp;million was PIK interest on our mezzanine debt and $2.3&nbsp;million was OID amortization, of which $1.0&nbsp;million was
attributable to loans under the senior secured credit agreement and $1.3&nbsp;million was attributable to loans under the mezzanine agreement. $4.6&nbsp;million of non-cash interest in
2010 was attributable to deferred loan origination costs of which $2.8&nbsp;million was due to the write-off of deferred loan origination costs related to our prior first- and
second-lien credit facilities which were repaid in the fourth quarter of fiscal 2010. Non-cash interest expense also includes interest on the convertible preferred certificates
of $10.7&nbsp;million in fiscal 2010, $10.5&nbsp;million in fiscal 2009 and $15.1&nbsp;million in fiscal 2008. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
intend to prepay in full our outstanding senior secured and mezzanine debt with the proceeds of this offering and with the proceeds of borrowings under a new senior secured credit facility, which
will accelerate the amortization of OID and deferred loan origination costs associated with our current credit agreements. See "&#151;Factors Affecting Comparability&#151;Reduction of
Interest Expense Through Debt Repayment" and "Use of Proceeds". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_foreign_exchange_effects"> </A>
<A NAME="toc_da12701_11"> </A>
<BR></FONT><FONT SIZE=2><B>  Foreign Exchange Effects    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our functional currency and reporting currency is the U.S. dollar. Gains or losses resulting from foreign currency transactions (transactions
denominated in a currency other than our subsidiaries' functional currencies) are included in foreign exchange gains and losses in the consolidated statement of operations in the period they occur. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Foreign
currency transaction gains and losses, unrealized translation gains and losses associated with certain of our foreign subsidiaries with a U.S. dollar functional currency that maintain their
books of record </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>42 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>in
a currency other than the U.S. dollar and unrealized translation gains and losses on short-term intercompany and operating receivables and payables denominated in a currency other than
the functional currency are included in foreign exchange gains and losses in the consolidated statement of operations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
each foreign subsidiary whose functional currency is the local currency, assets and liabilities are translated into U.S. dollars using exchange rates prevailing at the end of each reporting
period, while revenues and expenses are translated at average rates in effect for the period. The related translation
gains and losses are included in accumulated other comprehensive income / (loss) within equity on the consolidated balance sheet. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Foreign
exchange gain / (loss)&#151;net totaled a loss of $20.4&nbsp;million in the six months ended July&nbsp;2, 2011 as compared to a gain of $27.9&nbsp;million in the six months ended
June&nbsp;26, 2010, and totaled a gain of $9.6&nbsp;million in fiscal 2010, a loss of $2.1&nbsp;million in fiscal 2009, and a loss of $0.3&nbsp;million in fiscal 2008. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_discontinued_operations"> </A>
<A NAME="toc_da12701_12"> </A>
<BR></FONT><FONT SIZE=2><B>  Discontinued Operations    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Discontinued operations reflect the operations and the loss on the disposal of our closed Italian laminate facility, Mas Italia. We have completed
the liquidation of this subsidiary pursuant to a formal legal process. In connection with our plan to close the facility in 2009, we reclassified the financial results of Mas Italia as discontinued
operations. Accordingly, we reported a loss from discontinued operations of $5.6&nbsp;million in 2009 and $11.7&nbsp;million in 2008, and a loss on disposal of discontinued operations of
$3.6&nbsp;million in 2009. We do not expect to incur any further significant losses in connection with closure of this facility or liquidation of its related subsidiary. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_factors_affecting_comparability"> </A>
<A NAME="toc_da12701_13"> </A>
<BR></FONT><FONT SIZE=2><B>  FACTORS AFFECTING COMPARABILITY    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We anticipate that the following factors, which are described in greater detail above, will affect the comparability of our historic and future
financial performance: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
major restructuring activities have been largely completed, and we expect to incur minimal charges related to these activities in the future;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>financial
results attributable to our discontinued operations were minimal in the three months ended July&nbsp;2, 2011, and are expected to be immaterial for the
remainder of 2011; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>as
a result of the effective conversion of our Sponsors' investment in Isola from convertible preferred certificates to ordinary shares in connection with our
initial public offering, we will not incur financial effects (principally accreted non-cash interest expense) related to these securities subsequent to the effective date of the offering. </FONT></DD></DL>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following sets forth additional factors that may affect the comparability of our historic and future results: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_fiscal_year_and_53rd_week_impact"> </A>
<A NAME="toc_da12701_14"> </A>
<BR></FONT><FONT SIZE=2><B>  Fiscal Year and 53rd&nbsp;Week Impact    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We operate on either a 52- or 53-week fiscal year. References to fiscal 2010 are for the fiscal year ended January&nbsp;1,
2011; references to fiscal 2009 are for the fiscal year ended December&nbsp;26, 2009; and references to fiscal 2008 are for the fiscal year ended December&nbsp;27, 2008. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Each
quarterly period of the fiscal year typically has 13&nbsp;weeks, except for the occasional 53-week year when the fourth quarter has 14&nbsp;weeks. This 53-week year
occurs every five to six years to keep the fiscal and calendar quarters in approximate alignment. Our fiscal years 2009 and 2008 each consisted of 52&nbsp;weeks. Our 2010 fiscal year consisted of
53&nbsp;weeks, which had a favorable impact on revenue and operating income. Fiscal year 2011 is a 52-week year. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>43 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_reduction_of_interest_expense"> </A>
<A NAME="toc_da12701_15"> </A>
<BR></FONT><FONT SIZE=2><B>  Reduction of Interest Expense    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Immediately prior to the completion of our initial public offering, we will undergo a corporate reorganization that includes the effective conversion
of all of our outstanding convertible preferred certificates to ordinary shares. As a result of this conversion, we will no longer
record accreted interest expense related to the convertible preferred certificates, which was $10.7&nbsp;million in fiscal 2010. In the fiscal quarter in which the conversion takes place, we will
reclassify the embedded derivative liability which has a balance of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
at&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011 to stockholder's equity in the consolidated balance sheet. We will also
reclassify approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million of OID incurred in connection with the Class&nbsp;C convertible preferred certificates to stockholder's equity in the consolidated
balance
sheet. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
intend to use the proceeds of this offering to reduce our current indebtedness and to refinance the remaining balance of our current indebtedness with $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
borrowed under
a new senior secured credit facility bearing interest at&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% per annum. We expect to reduce our annualized cash interest expense by
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million and our total interest
expense by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million. Both annualized interest expense savings are based on our annualized actual cash and non-cash interest expense for the six month period ended
July&nbsp;2, 2011. Also, in the fiscal quarter in which we pay down our current debt, as a result of refinancing our current indebtedness we will amortize to interest expense approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million of OID incurred in connection with these financings and write off approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million of deferred financing costs. We expect that our interest
expense will benefit from the termination of the amortization of OID and deferred loan origination costs described above. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_management_fees_and_expense"> </A>
<A NAME="toc_da12701_16"> </A>
<BR></FONT><FONT SIZE=2><B>  Management Fees and Expense    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In connection with the acquisition and investment in the Isola Group by TPG Capital, we entered into a management agreement with TPG Capital, which
remains one of our Principal Sponsors. In each of the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010, we accrued approximately $1.0&nbsp;million in management fees payable to TPG
Capital under this agreement. Management fees and related expenses were $2.1&nbsp;million annually in fiscal 2010, 2009 and 2008, and were paid in full by mid-year 2011. Concurrently
with the closing of this offering, the management agreement will be terminated, provided that we will remain obligated to pay TPG Capital an $8.0&nbsp;million transaction fee plus approximately
$1.0&nbsp;million in accrued management fees and related expenses through such date. See "Certain Relationships and Related Transactions&#151;Agreements with Our Sponsors". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="da12701_public_company_expense"> </A>
<A NAME="toc_da12701_17"> </A>
<BR></FONT><FONT SIZE=2><B>  Public Company Expense    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Upon consummation of this public offering, we will become a public company and our ordinary shares will be listed for trading on the Nasdaq Global
Market. As a result, we will need to comply with numerous additional laws, regulations, and requirements. In 2011, we hired a General Counsel, a Director of External Reporting and a Senior Tax
Director, and we plan to hire other tax, finance, accounting and human resources personnel, as needed, to enhance our internal
compliance capabilities. We will also be adding new independent board members, who will be compensated in accordance with market practice, and we have procured more comprehensive director and officer
liability insurance covering our increased exposure as a public company. We estimate that incremental annual public company costs will be approximately $3.0&nbsp;million. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
expect that we will incur approximately $9.0&nbsp;million in expenses in connection with this offering, including our reorganization as a Cayman Islands company. We have incurred
$4.6&nbsp;million in expenses in connection with this offering as of July&nbsp;2, 2011, which we have elected to expense rather than defer and apply as a reduction of net proceeds to be received
from this offering. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>44 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_non-cash_stock-based_compensation_charges"> </A>
<A NAME="toc_dc12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  Non-cash Stock-based Compensation Charges    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Upon consummation of the offering and capitalization of our new Cayman holding company, outstanding management equity awards will be converted to
equivalent awards in the new, publicly traded company. In addition, we adopted our 2011 Equity Incentive Plan under which we may make future equity awards to directors, executives, and other
employees. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Upon
the closing, we anticipate granting restricted stock to our independent directors and various equity awards to officers and key employees. These equity awards will result in a
non-cash compensation charge to the consolidated statement of operations in future fiscal periods as the awards vest. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_tax_contingencies"> </A>
<A NAME="toc_dc12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  Tax Contingencies    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company and its subsidiaries file income tax returns with U.S. federal, state and local and non-U.S. jurisdictions and are subject to audits of
those returns. Currently, the Internal Revenue Service ("IRS") is examining the 2008 and 2009 federal income tax returns. The Company and its subsidiaries are no longer subject to IRS examination for
periods prior to 2007, although carryforward attributes that were generated prior to 2007 may still be adjusted upon examination by the IRS if they either have been or will be used in a future period.
Income tax returns filed by the Company's German subsidiaries are also under examination for the years 2004 through 2007. With a few exceptions, the Company and its subsidiaries are no longer subject
to examination for years prior to 2004. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company has recorded $56.4&nbsp;million and $53.4&nbsp;million related to uncertain tax positions in the consolidated balance sheet as of July&nbsp;2, 2011 and January, 1, 2011,
respectively. In this regard, an uncertain tax position represents the Company's expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return or
claim that has not been reflected in
measuring income tax expense for financial reporting purposes. Until these positions are sustained by the taxing authorities, the Company does not recognize the tax benefits resulting from such
positions and reports the tax effects as a liability for uncertain tax positions in its consolidated balance sheet. Much of the recorded liability for uncertain tax positions is associated with tax
jurisdictions where we have experienced significant net operating losses in the past and accordingly, a significant portion of the recorded liability, if settled unfavorably, would not be settled in
cash. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_internal_control_over_financial_reporting"> </A>
<A NAME="toc_dc12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  INTERNAL CONTROL OVER FINANCIAL REPORTING    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_overview"> </A>
<A NAME="toc_dc12701_4"> </A></FONT> <FONT SIZE=2><B>  Overview    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As a result of becoming a public company, we will have to comply with the standards adopted by the Public Company Accounting Oversight Board. More
specifically, pursuant to Section&nbsp;404 of the Sarbanes-Oxley Act, management will be required to report on, among other things, the effectiveness of our internal control over financial
reporting. This reporting requirement will begin with our Annual Report on Form&nbsp;10-K for our 2012 fiscal year ending December&nbsp;29, 2012 (to be filed in early 2013).
Management's assessment of the effectiveness of our internal controls will have to include disclosure of any material weaknesses identified in our internal control over financial reporting, as well as
a statement that our independent registered public accounting firm has issued an opinion on the effectiveness of our internal controls over financial reporting. Prior to becoming a public company, we
are not required to be compliant with the requirements of Section&nbsp;404 of the Sarbanes-Oxley Act. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_material_weakness"> </A>
<A NAME="toc_dc12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  Material Weakness    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>In preparation for this offering, we and our independent registered public accounting firm identified a material weakness in our internal controls
over financial reporting. Under standards established by the Public Company Accounting Oversight Board, a material weakness is a deficiency, or combination of </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>45 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>deficiencies,
in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected and
corrected in a timely manner. Our internal control deficiencies resulted in material adjustments to the Company's previously issued consolidated financial statements for fiscal years 2004 through 2009
and to its consolidated financial statements for fiscal 2010. These material adjustments were not previously identified by us because we had limited resources within the accounting function possessing
a requisite level of technical experience in the selection and application of certain accounting principles. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
accounting determinations with respect to our more complex transactions reflected research by our financial and accounting management and the review and vetting of management's preliminary
conclusions with external technical resources. These efforts, however, were not sufficient to ensure that we reached the proper conclusions and accounting determinations regarding the following
accounting topics issued by the Financial Accounting Standards Board's Accounting Standards Codification ("ASC"): </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><B>ASC Topic&nbsp;480: "Distinguishing Liabilities from Equity".</B></FONT><FONT SIZE=2>&nbsp;&nbsp;We have convertible preferred
certificates as part of our capital structure. These are hybrid securities, often issued by companies chartered in Luxembourg, which have characteristics of both debt and equity. Previously, we had
accounted for these convertible preferred certificates as equity. In 2011, it was determined that these securities are properly accounted for as debt instruments based upon their legal form under
Luxembourg law. Further, we completed a financing in 2010 that included the issuance of senior secured term loans, unsecured term loans and Class&nbsp;C convertible preferred certificates, with a
syndicate of lenders, the majority of which are partial owners in the Sponsor Limited Partnership. We did not allocate the total arrangement proceeds among the underlying instruments based upon
relative fair value. Our outstanding convertible preferred certificates will be effectively converted into ordinary shares of Isola Group&nbsp;Ltd. upon the completion of this offering as described
in "Concurrent Transaction&#151;Corporate Reorganization."
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><B>ASC Topic&nbsp;815: "Derivatives and Hedging".</B></FONT><FONT SIZE=2>&nbsp;&nbsp;We completed a refinancing in September&nbsp;2010,
but we failed to recognize at that time that the prepayment options of the new credit agreements constituted embedded derivatives for financial reporting purposes. The conversion feature within our
convertible preferred certificates also represents an embedded derivative. It was also determined during 2011 that the fair value associated with the conversion feature had not taken into account the
rights and privileges associated with our capital structure.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><B>ASC Topic&nbsp;830: "Foreign Currency Matters".</B></FONT><FONT SIZE=2>&nbsp;&nbsp;In 2011, it was determined that we had not changed our
corporate functional currency from the euro to the U.S. dollar coincident with a leveraged recapitalization that changed the currency of our primary financing from the euro to the U.S. dollar. Further
analysis uncovered that two operating subsidiaries had used incorrect local functional currencies.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><B>ASC Topic&nbsp;718: "Compensation&#151;Stock Compensation".</B></FONT><FONT SIZE=2>&nbsp;&nbsp;The Sponsor Limited Partnership,
which is the parent entity that owns Isola Group S.a.r.l. (Isola's current Luxembourg holding company) and is not part of the consolidated Isola group, issued stock-based awards to certain members of
executive management. In 2011, it was subsequently determined that we should have recorded an appropriate expense for stock-based compensation related to the awards issued by the Sponsor Limited
Partnership to certain members of our executive management and that the related compensation expense determination should have considered the rights and preferences of our ownership structure as well
as the ownership structure of the Sponsor Limited Partnership. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Management
has determined that these control deficiencies constitute a material weakness in the design and operation of internal controls. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>46 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
light of the material weakness in our internal control over financial reporting, we performed additional analysis and other post-closing procedures in an effort to ensure that our
consolidated financial statements included in this filing have been prepared in accordance with GAAP. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
Chief Financial Officer, under the supervision of our Chief Executive Officer and with the oversight of our board of directors, is responsible for implementing changes and improvements in our
internal control over financial reporting and remediating the control deficiencies that gave rise to the
material weakness. To date, we have hired a Director of External Reporting, who has experience working in the accounting departments of public companies. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, beginning in the third quarter of 2011, we began to formulate a plan to remediate the underlying causes of our material weakness. The plan includes the following actions: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>redefine
the organizational structure, roles and responsibilities of the accounting and finance staff and establish additional layers of oversight and quality
review, especially with respect to the accounting for complex transactions, including derivatives and financing transactions;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>continue
to recruit additional accounting and finance personnel with the necessary technical skills to fulfill the more demanding accounting and reporting standards
required of a public company;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>engage
outside technical accounting and financial advisors on an ongoing basis to assist our accounting and finance staff to determine proper accounting for more
complex transactions, including derivatives and financing transactions;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>enhance
and extend the documentation, policies and procedures, including documentation of internal controls, required for the timely financial closing and reporting
processes that will be required of us as a public company;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>require
our accounting and financial staff to attend professional courses or seminars to remain abreast of the ever evolving accounting pronouncements and the
additional complexities and reporting requirements of a public company;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>review
and rewrite, as appropriate, our current accounting manual; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>continue
to cross-train accounting and financial staff to ensure coverage and continuity in key positions. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Although
we believe that these actions will improve our internal control over financial reporting, and our disclosure controls and procedures, additional time is required to fully implement these
remediation efforts and to demonstrate they have resulted in the effective operation of our internal controls. Our management will closely monitor and modify, as appropriate, the remediation plan
outlined above to eliminate the identified material weakness. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>If
the steps we take do not correct the material weakness in a timely manner, we will be unable to conclude that we maintain effective internal control over financial reporting. Accordingly, there
would continue to be a reasonable possibility that a material misstatement of the Company's financial statements would not be prevented or detected on a timely basis. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_critical_accounting_policies_and_estimates"> </A>
<A NAME="toc_dc12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  CRITICAL ACCOUNTING POLICIES AND ESTIMATES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The discussion of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance
with U.S. generally accepted accounting principles, or U.S.&nbsp;GAAP. During the preparation of these financial statements, we are required to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions, including those discussed below, that are
used to prepare our financial statements. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The results of our
analysis form </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>47 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>the
basis for making assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different
assumptions or conditions, and the impact of such differences may be material to our financial statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>While
our significant accounting policies are described in more detail in the notes to our audited financial statements included later in this prospectus, we believe that the following critical
accounting policies involve our more significant judgments and estimates used in the preparation of our financial statements: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_revenue_recognition"> </A>
<A NAME="toc_dc12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  Revenue Recognition    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We recognize revenue from sales of our products net of estimated returns and allowances, when persuasive evidence of an arrangement exists, including
where the agreement of a fixed price to our customers has been reached and collectability is reasonably assured. Customer purchase orders are used to determine the existence of an arrangement. Our
sales terms do not include rights of return or subsequent price discounts; therefore, we recognize revenue on products sold at the time of shipment or delivery, based on the terms of the agreement.
Shipping and handling costs charged to customers are included in revenue, and the associated shipping and handling costs incurred by us are recorded as cost of goods sold. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_allowance_for_doubtful_accounts"> </A>
<A NAME="toc_dc12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  Allowance for Doubtful Accounts    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We perform ongoing credit evaluations of our customers and adjust credit limits based on each customer's creditworthiness, as determined by our
review of current credit information. We continuously monitor collections and payments from our customers and maintain an allowance for doubtful accounts based upon our historical experience, our
anticipation of uncollectible accounts receivable and any specific customer collection issues that we have identified. While our credit losses have historically been insignificant (other than a
$6.7&nbsp;million loss in fiscal 2008 which was a result of the softening of the economic environment), we may experience higher credit loss rates in the future than we have in the past. Our
receivables are concentrated in relatively few customers. Therefore, a significant change in the liquidity or financial position of any one significant customer could make collection of our accounts
receivable more difficult, require us to increase our allowance for doubtful accounts and negatively affect our working capital. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_inventories"> </A>
<A NAME="toc_dc12701_9"> </A>
<BR></FONT><FONT SIZE=2><B>  Inventories    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Inventories include the cost of materials, direct labor, and related manufacturing overhead and are stated at the lower of cost (computed using the
first-in, first-out method) or market. We continually assess the recoverability of inventory based on assumptions about demand and market conditions. Inventory carrying value
is reduced for estimated excess and obsolescence by the difference between cost and estimated market value. This estimate is based on assumptions regarding future demand and market conditions.
Forecasted demand is determined based on historical sales and expected future sales. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_long-lived_assets,_goodwill_and_intangibles"> </A>
<A NAME="toc_dc12701_10"> </A>
<BR></FONT><FONT SIZE=2><B>  Long-lived Assets, Goodwill and Intangibles    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Long-lived assets, including property and equipment, and intangible assets subject to amortization, are assessed for impairment whenever
events and circumstances have occurred that indicate the remaining estimated useful lives may warrant revision, or that the remaining balance of these assets may not be recoverable. In performing the
review for recoverability, we estimate the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If an asset is impaired, the amount of the
impairment loss would be calculated based on the excess of the carrying amount of the asset over its estimated fair value. Factors we consider important that could trigger an impairment review include
continued operating losses, significant negative industry trends, significant underutilization of the assets and significant changes in the way we plan to use the assets. The estimation of future cash
flows involves numerous assumptions, which require our judgment, including, but not limited to, future use of the assets </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>48 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>for
our operations versus sale or disposal of the assets, future selling prices for our products and future production and sales volumes. We must use our judgment in determining the groups of assets
for which impairment tests are separately performed. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Depreciation
and amortization of intangible assets and other long-lived assets is provided using the straight-line method over the assets' respective estimated useful lives,
reflecting the pattern of economic benefits associated with these assets. Changes in circumstances such as technological advances, or changes to our business model could cause the actual useful lives
of long-lived assets and other intangible assets to differ from our initial estimates. If we determine that the useful life of an asset should be revised, we depreciate the remaining net
book value over the new estimated useful life. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
2010, we did not record any asset impairments and there were no indications of impairment suggesting a requirement to test the long-lived assets for impairment. In 2009, we recorded
$4.1&nbsp;million in asset impairments associated with the closure of our manufacturing facilities in Fremont, California and Dalian, China. In 2008, we recorded $3.3&nbsp;million in asset
impairments in connection with our Fremont facility. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Goodwill,
which represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination and is not subject to
amortization, is evaluated, at a minimum, on an annual basis and whenever events or circumstances have occurred that indicate that the carrying value may not be recoverable. Our testing approach
utilizes a discounted cash flow analysis and comparative market multiples to determine each reporting unit's fair value for
comparison to its carrying value. In fiscal 2008, we recorded $8.5&nbsp;million in goodwill impairments which reduced our goodwill balance to zero; this impairment was attributable primarily to the
reduction in our revenues and profits due to the general decline of the economy. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_litigation_and_loss_contingencies"> </A>
<A NAME="toc_dc12701_11"> </A>
<BR></FONT><FONT SIZE=2><B>  Litigation and Loss Contingencies    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>From time to time, we may be involved in claims, lawsuits and other proceedings. Such matters involve uncertainty as to the eventual outcomes and any
gains or losses we may ultimately realize when one or more future events occur or fail to occur. We record expenses for litigation and loss contingencies when it is probable that a liability has been
incurred and the amount of the loss can be reasonably estimated. We estimate the probability of such losses based on the advice of internal and external counsel, outcomes from similar litigation,
status of the lawsuits (including settlement initiatives), legislative developments and other factors. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Due
to the numerous variables associated with these judgments and assumptions, both the precision and reliability of the resulting estimates of the related loss contingencies are subject to
substantial uncertainties. We regularly monitor our estimated exposure to these contingencies and, as additional information becomes known, may change our estimates accordingly. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_fair_value_measurement"> </A>
<A NAME="toc_dc12701_12"> </A>
<BR></FONT><FONT SIZE=2><B>  Fair Value Measurement    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We apply fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on
a recurring or nonrecurring basis. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs
by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data
obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions of what market participants would use in pricing the asset or liability developed based on the best
information available in the circumstances. The hierarchy has three levels based on the reliability of the inputs as follows: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Level&nbsp;1&#151;Valuation
is based upon unadjusted quoted market prices for identical assets or liabilities in active markets that we have the ability to
access. </FONT></DD></DL>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>49 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Level&nbsp;2&#151;Valuation
is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets
or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Level&nbsp;3&#151;Valuation
is based on models where significant inputs are not observable. The unobservable inputs reflect our own assumptions about the
inputs that market participants would use. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Financial
instruments consist of cash, trade receivables, bank lines of credit, short-term bank debt, trade payables, long-term debt, including convertible preferred
certificates, and derivative instruments. With the exception of our derivative instruments, which are recorded at fair value, and our long-term debt and convertible preferred certificates,
the carrying value of these other financial instruments approximates fair value either because of the short maturities of these instruments or because the interest rates are based upon variable
reference rates. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
engage a third party consultant to assist in the determination of the estimated fair value of our long-term debt, convertible preferred certificates and embedded derivative liabilities. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
most significant asset or liability recorded at fair value on a recurring basis is our derivative liability, specifically as related to our convertible preferred certificates. The fair value of
our embedded derivatives related to our convertible preferred certificates and our stock-based compensation awards is most sensitive to our determination of the enterprise value of our Company. The
enterprise value inputs associated with the Company's valuation were derived using the income and market approaches. The inputs that significantly impact the enterprise value determination include,
but are not limited to, the following: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
projected financial performance and operating results;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
market performance of comparable companies;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>changes
in the probability of various scenarios towards higher valuation outcomes;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>discount
and illiquidity rates; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
likelihood of achieving a liquidity event, such as an initial public offering or sale of our company, given prevailing market conditions. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
more detailed description of the valuation methodologies used for our long-term debt, convertible preferred certificates and for our assets and liabilities measured at fair value is included in the
footnotes to the consolidated financial statements pertaining the each asset and liability. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Valuation
methodologies used for stock-based awards are included in the footnotes to the consolidated financial statements and in "&#151;Stock-based Compensation Expense" below. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_income_taxes"> </A>
<A NAME="toc_dc12701_13"> </A>
<BR></FONT><FONT SIZE=2><B>  Income Taxes    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We are subject to income taxes in the United States and foreign jurisdictions, and we use estimates in determining our provision for income taxes. We
account for taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax-basis
reporting of assets and liabilities that are measured using the enacted tax rates and laws that are expected to be in effect when differences are expected to reverse. We are required to adjust our
deferred tax assets and liabilities in the period when tax rates or provisions of the income tax laws are enacted. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
effective income tax rate for fiscal 2010 was 82.8%, resulting in a provision for income taxes of $24.4&nbsp;million compared to pretax income of $29.5&nbsp;million. Our effective tax rate for
fiscal 2010 was higher than our statutory income tax rate for fiscal 2010, which was 28.6%. While changes in our effective tax rates are attributable to the mix of taxable income across the
geographies in which we conduct business, our </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>50 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>effective
income tax rate for fiscal 2010 was adversely impacted by several items such as the accruals for uncertain tax positions and fluctuations in the level of income or loss earned in
loss-making jurisdictions for which we do not expect to realize tax benefits. The effective tax rate in fiscal year 2010 was greater than the statutory rate due to the accrual for
uncertain tax positions that increased the effective tax rate 115.3%. This was offset by a release of the valuation allowance associated with a reduction in deferred tax assets in certain
loss-making jurisdictions, including the U.S., which reduced the effective tax rate by 60.8%. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
effective tax rate in fiscal year 2009 was lower than the statutory rate primarily as a result of net operating losses incurred in certain jurisdictions, including in the U.S., for which we do not
expect to realize an associated tax benefit. The effective tax rate in fiscal year 2008 was lower than the statutory rate because of the accrual for uncertain tax positions, which increased the
effective tax rate by 11.3%. This was offset by the release of the valuation allowance associated with a reduction in deferred tax assets in certain loss-making jurisdictions, including
the U.S., which resulted in a net reduction of the effective tax rate by 37.4%. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
recorded a valuation allowance of $104.9&nbsp;million at July&nbsp;2, 2011 to reduce our deferred tax assets to the amount we believe is more likely than not to be realized. We have recorded
valuation allowances on deferred tax assets in a number of tax jurisdictions, the most significant of which are the U.S., Luxembourg and Italy. The most significant tax jurisdictions with deferred tax
assets and no valuation allowances are China and Taiwan. If our assumptions change and we determine we will more likely than not be able to realize those deferred tax assets, the tax benefits related
to any reversal of the valuation allowance will be accounted for in the period in which we make such determination. Likewise, should we determine that we would be able to realize our deferred tax
assets in the future in excess of our recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
tax benefit from an uncertain tax position may only be recognized based on the technical merits when it is more likely than not that the position will be sustained upon examination. The recognition
and measurement of tax benefits requires significant judgment that might change as new information becomes available. If our financial results or other relevant facts change, thereby impacting the
likelihood of realizing the tax benefit of an uncertain tax position, significant judgment would be applied in determining the effect of the change on our valuation allowance. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_pension_and_other_post-retirement_benefits"> </A>
<A NAME="toc_dc12701_14"> </A>
<BR></FONT><FONT SIZE=2><B>  Pension and Other Post-retirement Benefits    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We sponsor several pension plans for certain salaried and hourly employees, and bargaining unit pension plans covering retirees and vested former
employees of the Company. Accounting for pensions and other post-retirement benefits involves estimating the cost of future benefits and attributing the cost over the employees' expected
periods of employment with the Company. The determination of our obligation and expense for these costs requires certain assumptions (see Note&nbsp;7 to the consolidated financial statements). These
assumptions include, among others, the discount rate, expected long-term rate of return on plan assets and health care cost trend rates and are subject to change. While we believe that the
assumptions used are appropriate, significant differences in results or significant changes in our assumptions may materially affect the pension and other post-retirement obligations and
related future expense. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Changes
in key assumptions for our pension and other post-retirement benefits plans would have the following effects for the year ended January&nbsp;1, 2011: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Discount
Rate&#151;Holding all other assumptions constant, a one percentage point increase or decrease in the discount rate assumption for fiscal 2010 would have decreased or increased net
periodic benefit cost in fiscal 2011 by approximately $0.8&nbsp;million with no impact on post-retirement benefits. In addition, a one percentage point increase in the discount rate
would decrease the pension and other post-retirement benefits obligation recorded at January&nbsp;1, 2011 by approximately $13.5&nbsp;million, of which $0.1&nbsp;million relates to </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>51 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


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<P style="font-family:times;text-align:justify"><FONT SIZE=2>post-retirement
benefits, and a one percentage point decrease would increase the pension and other post-retirement benefits obligations recorded at January&nbsp;1, 2011 by
approximately $16.4&nbsp;million, of which $0.1&nbsp;million relates to post-retirement benefits. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Expected
Long-Term Rate of Return&#151;A one percentage point increase or decrease in the expected long-term rate of return assumption for fiscal 2010, holding all other
assumptions constant, would increase or decrease our net periodic benefit cost for the year ended January&nbsp;1, 2011 by approximately $0.6&nbsp;million, with no impact on
post-retirement benefits. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Health
Care Cost Trend Rates&#151;A one percentage point increase or decrease in the initial assumed health care trend rate through ultimate assumed health care trend rates would have an
immaterial effect on the accumulated post-retirement benefit obligation at January&nbsp;1, 2011. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dc12701_stock-based_compensation_expense"> </A>
<A NAME="toc_dc12701_15"> </A>
<BR></FONT><FONT SIZE=2><B>  Stock-based Compensation Expense    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Awards granted  </I></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Certain of our employees and directors have been granted awards to purchase limited partner common units in the Sponsor Limited Partnership
("partnership units"). These awards include options to purchase partnership units ("options") and restricted partnership units ("restricted units"). </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
exercise prices of the options granted were established by the non-executive directors of the Sponsor Holding Company's board of managers who have historically functioned as the
Company's compensation committee. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Award valuation and recognition of compensation expense  </I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The fair values of all option and restricted unit awards, which we refer to as stock-based payment awards, are determined as of their grant date. We
estimate the fair value of each option award using the Black-Scholes option pricing model. This model requires the use of the following assumptions: (i)&nbsp;expected volatility, which is based on a
peer group of publicly traded entities over a period consistent with the expected terms of the options; (ii)&nbsp;expected life of the option award, which is determined based on management's best
estimate of when vested awards are expected to be exercised; (iii)&nbsp;expected dividend yield, which is 0%, as we do not anticipate paying dividends in the foreseeable future; (iv)&nbsp;the
risk-free interest rate, which is based on the U.S. Treasury yield curve in effect at the time of grant consistent with the option's expected life; and (v)&nbsp;the fair value of the
partnership units, which is based on the determination of our enterprise value. If any of the assumptions used in the Black-Scholes model changes significantly, stock-based compensation for future
awards may differ materially from previously granted awards. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
weighted average assumptions used in the Black-Scholes model for fiscal 2008 and 2010 and for the six months ended July&nbsp;2, 2011 are as follows: </FONT></P>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="55pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="55pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Fiscal 2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Fiscal 2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Six months<BR>
ended July&nbsp;2,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=10 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected volatility</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>72</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>65</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>80</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Risk-free interest rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected term (in years)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dividend yield</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=2>No options were granted during fiscal 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
grant date fair value of stock-based payment awards is recognized as compensation expense using the straight line method, net of estimated forfeitures, over the vesting period. Option and
restricted unit awards </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>52 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>vest
ratably over a 2- to 5-year period beginning with the first anniversary of the grant date. We estimate forfeitures based on our historical forfeiture of stock-based
payment awards adjusted to reflect future changes in facts and circumstances, if any. We will revise our estimated forfeiture rate if actual forfeitures differ from our initial estimates. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Exchange event  </I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On October&nbsp;8, 2010, certain employees and directors holding options (vested or unvested at that date) were given an offer to either retain
their existing options with the originally issued terms or surrender their options for $0.53 in cash for each vested option payable immediately as well as $0.53 in cash for each unvested option
payable upon completion of that unvested option's original service-based vesting condition. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Also
on October&nbsp;8, 2010, the remaining employees and directors holding options (vested or unvested at that date) were given an offer to surrender all of their existing options (vested or
unvested at that date) in exchange for a combination of new options and new restricted units. As of October&nbsp;8, 2010, 4,562,000 options were outstanding and the holders thereof elected the
following: </FONT></P>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Action taken</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Options</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Vested options surrendered for cash</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>565,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unvested options surrendered for cash upon vesting</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>331,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options exchanged for new options and restricted units</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3,630,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Original options retained</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>36,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=2>As a result, employees received $299,450 in cash for vested options surrendered and were entitled to $175,430 in cash for unvested options to be paid as those
options vest under their original terms. The consideration given for the vested options surrendered was in excess of the surrender date fair value by $175,610, and this amount was recognized as
compensation expense in 2010. As future service is required for payment of the options unvested as of October&nbsp;8, 2010, we determined that the transaction was a modification under ASC&nbsp;718
that changes the award classification from equity to liability. Incremental compensation cost for these modified awards, measured as the excess of their fair value over the fair value of the original
awards immediately before the terms were modified, was not material. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
total of 13,460,500 new options were issued and 3,337,500 new restricted units were issued in connection with the exchanges. We determined the issuance of new options and new restricted units was a
modification under ASC&nbsp;718 for substantially all of the exchanged options. Accordingly, we measured the incremental fair value of consideration given for these modified awards over that of the
options tendered and determined there to be $6.8&nbsp;million of additional value. This additional stock-based compensation, as well as $1.6&nbsp;million of unrecognized stock-based compensation
related to the options tendered in the modification, will be recognized over the vesting period of the new options and new restricted units using the straight-line method. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>53 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Options granted  </I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>During fiscal 2010 and 2008 and the six months ended July&nbsp;2, 2011, we granted options with exercise prices as follows: </FONT></P>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="83pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="82pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="92pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Grant date</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Options granted</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Exercise price<BR>
per option</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Partnership unit<BR>
fair value</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Option grant date<BR>
fair value<BR>
per option</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=13 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>January&nbsp;29, 2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,145,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.07</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.46</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>April&nbsp;30, 2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,625,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.45</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.08</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>October&nbsp;8, 2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13,460,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.63</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.41</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>January&nbsp;22, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>96,100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.83</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.64</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Restricted units granted  </I></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>During fiscal 2010 and the six months ended July&nbsp;2, 2011, we granted restricted units as follows: </FONT></P>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="78pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="82pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="74pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Grant date</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Restricted units<BR>
granted</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Partnership unit<BR>
fair value</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Restricted unit<BR>
grant date fair<BR>
value per unit</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=10 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>October&nbsp;8, 2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3,337,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.63</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.63</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>January&nbsp;22, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>54,700</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.83</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.83</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Stock-based compensation recognized  </I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We recorded stock-based compensation expense of $2.2&nbsp;million, $1.8&nbsp;million, $1.2&nbsp;million, and $1.2&nbsp;million for fiscal
2010, 2009, 2008 and the six months ended July&nbsp;2, 2011, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Based
upon the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the aggregate intrinsic value of the 13,496,500 options outstanding as of July&nbsp;2, 2011 was
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, of which $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million related to vested options and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million related to unvested options. The aggregate intrinsic value of
the 12,296,500 options outstanding as of July&nbsp;2, 2011 was $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, of which
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million related to vested options and $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
related to unvested options. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Approach to valuation of partnership units  </I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In conducting the valuation of the partnership units, we used a methodology that is consistent with the methods outlined in the AICPA Practice Aid
Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the "Practice Aid"). These valuations were prepared contemporaneous with the grant of stock-based
payment awards granted by us. In preparing the 2010 consolidated financial statements, we determined the contemporaneous valuations did not appropriately consider the rights and preferences of the
Company's and the Sponsor Limited Partnership's share and partner unit classes, respectively. Accordingly, during 2011, we performed retrospective valuations to estimate the fair value of the
partnership units underlying the stock-based payment awards at each significant historical stock-based payment award date. The revised fair values were utilized to prepare our financial statements for
all periods affected. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
enterprise value inputs associated with our valuations were derived using the income and market approaches. The income approach estimates our enterprise value by discounting the expected future
cash flows to present value. Under the market approach, our total enterprise value is estimated by comparing our business to similar businesses whose securities are actively traded in public markets,
or businesses that are involved in a public or private transaction. We have selected valuation multiples derived from trading </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>54 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>multiples
of public companies that participate in our industry. These valuation multiples were then applied to the equivalent financial metric of our business, giving consideration to differences
between our Company and similar companies for such factors as company size, financial leverage, and growth prospects. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
prepared financial forecasts to be used in the computation of the enterprise value for the income approach for each valuation date. The financial forecasts took into account our past experience and
future expectations. There is inherent uncertainty in these estimates. The risks associated with achieving our forecasts were assessed in selecting the appropriate discount rates. If different
discount rates had been used, the valuations would have been different. The fair value of our debt was then subtracted from the calculated enterprise value. The resulting equity value was then
allocated among the instruments that comprise our capital structure based upon rights and preferences of the instruments using the option-pricing method. As all of the allocated value associated with
these instruments would be available to the Sponsor Limited Partnership, the option-pricing method was used to allocate the equity value of the Company among the varying partner interests of the
Sponsor Limited Partnership, including the partnership units underlying our stock-based payment awards. The allocation was based on a series of call options using the Black-Scholes option pricing
model. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
option-pricing method involves making estimates of the anticipated timing of a potential liquidity event such as a sale of our Company or an initial public offering, and estimates of the
volatility of the partnership units. The anticipated timing is based on the plans of our board and management. Estimating the volatility of the share price of a privately held company is complex
because there is no readily available market for the shares. We estimated the volatility of the partnership units based on available information on volatility of stocks of publicly traded companies in
the industry. Had we used different estimates of volatility, the resulting value of the partnership units would have been different. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
discussion of significant factors and assumptions in determining the estimated fair value of our stock-based payment awards granted between December&nbsp;27, 2007 and July&nbsp;2, 2011 is
provided below: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Valuation of partnership units as of January&nbsp;29, 2008  </I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We performed a retrospective valuation of the partnership units of the Sponsor Limited Partnership as of January&nbsp;29, 2008 and estimated the
fair market value to be $2.07 per unit as of that date. To estimate our enterprise value, we used the discounted cash flow ("DCF") methodology for the income approach and a combination of the
guideline public company methodology and the guideline transaction methodology for the market approach, as described above. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the DCF methodology, we prepared annual forecasts of our future cash flows through December 2015 and applied a terminal value based on the constant growth dividend model to estimate the total
value of the cash flows beyond the final year. Our forecasts of future cash flows were based on our estimated net debt-free cash flows. These cash flows were then discounted to the
valuation date at an estimated weighted average cost of capital. Our cost of capital was derived by applying the widely-used capital asset pricing model ("CAPM"). We believe that the
procedures employed in the DCF methodology, including estimating the net debt-free cash flows, weighted average cost of capital, discount rate and terminal value, were reasonable and
consistent with the Practice Aid. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the guideline public company methodology, we selected, as of the valuation date, a range of trading multiples for a group of comparable public companies manufacturing components of printed circuit
boards such as laminates and related materials that, at the time, we considered to be most comparable to us based on size and business model. We focused primarily on a subset of companies within the
broader company group, as we believe their operations are the most comparable to our own. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>55 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the guideline transaction methodology, we observed a range of implied multiples reflecting the ratio of the purchase price paid in the transactions to the target companies' trailing
12&nbsp;months financial metrics prior to the acquisition date for comparable companies in the laminate and electronics industry that had recently been sold. We selected a multiple consistent with
our relative profitability compared with the transaction companies. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
valuations resulting from the foregoing methodologies were then combined to determine an estimated overall enterprise value. In estimating our enterprise value, we weighted the income and market
approaches equally. Within the market approach, we gave greater weight to the guideline public company method compared with the guideline transaction methodology based on the relative reliability of
the methods and underlying data. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the January&nbsp;29, 2008 retrospective valuation, we calculated total allocable equity value by subtracting the fair value of our debt from the enterprise value. We then allocated the equity
value using the option-pricing method based upon rights and preferences of the various financial instruments. Accordingly, the value of the partnership units was determined by calculating its
allocation of value based on their rights. In order to determine the allocation break points, we made estimates of the anticipated timing of a potential liquidity event and estimates of the volatility
of our equity securities. The anticipated timing was based on our plans toward the liquidity event and on our board of directors' judgment. Estimating the volatility of the stock price of a privately
held company is complex because there is no readily available market for the shares. We estimated the volatility of our stock based on available information on volatility of stocks of publicly traded
companies in the industry. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>After
allocating the value of the Company's equity classes, and applying a marketability discount of 22%, we determined the estimated fair value attributable to the partnership units was $2.07 per
unit as of January&nbsp;29, 2008. The discount for lack of marketability reflects the lower value placed on securities that are not freely transferable, as compared to those that trade frequently in
an established market. The marketability discount was based on an at-the-money Black-Scholes put option analysis, assuming a dividend yield of zero; a maturity of one year; a
risk-free rate of 2.3%, which was equal to the rate on U.S. Treasury bills matching the expected term; and an annualized volatility of 60%, which was the average volatility of the
comparable public companies adjusted for relative leverage over a period equal to the expected term. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
methodology and factors used in estimating the partnership unit value on other stock award grant dates were largely consistent with the discussion above. Significant changes in assumptions and
factors impacting partnership unit value for other stock award grant dates are discussed below. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Valuation of partnership units as of April&nbsp;30, 2008  </I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On April&nbsp;30, 2008, the fair value of a partnership unit of the Sponsor Limited Partnership was determined to be $1.45 per unit. Volatility of
the selected guideline public companies increased as compared with January&nbsp;29, 2008 as stock prices recovered somewhat from the prior period declines. The weighted average cost of capital also
increased primarily due to the increased volatility in guideline stock prices. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
overall outlook for the Company was also decreasing at this time due to the declining revenue and profitability. As a result, we selected lower multiples for the guideline public company method. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
calculated total allocable equity value by subtracting the fair value of our debt from the enterprise value. We then allocated the equity value using the option-pricing method based upon rights and
preferences of the various equity classes and applied a marketability discount of 30%, which was higher due to increased volatility. The resulting estimated fair value attributable to the partnership
units was $1.45 per unit, which we determined to be the fair value of our partnership units as of April&nbsp;30, 2008. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>56 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=61,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=455933,FOLIO='56',FILE='DISK108:[11ZAS1.11ZAS12701]DE12701A.;40',USER='KSEAMON',CD='29-OCT-2011;20:08' -->
<A NAME="page_de12701_1_57"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Valuation of partnership units as of October&nbsp;8, 2010  </I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On October&nbsp;8, 2010, the fair value of a partnership unit of the Sponsor Limited Partnership was determined to be $0.63 per unit. Compared with
April 2008, our historical financial results and future outlook were improving. Volatility and cost of capital inputs were similar compared with April 2008. Stock prices of reference guideline
companies and their financial performance continued to be relatively low, resulting in lower market price multiples that were offset by our better performance than in the prior periods. As a result,
the market-based methods indicated higher values for the business enterprise value of the Company. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
calculated total allocable equity value by subtracting the fair value of our debt from the enterprise value. While debt increased, the primary reason for the decline in per unit value compared to
April
2008 was the issuance of additional partnership units in conjunction with the financing transaction that took place in September 2010 (see Note&nbsp;4 of the annual financial statements). The total
economic interests at the partnership unit level increased over 2.5 times, which diluted the per unit value. After allocating the value of the equity classes, and applying a marketability discount of
28%, the estimated fair value attributable to the partnership units was determined to be $0.63 per unit as of October&nbsp;8, 2010. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Valuation of partnership units as of January&nbsp;22, 2011  </I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On January&nbsp;22, 2011, we granted stock options and restricted units to certain key employees. The fair value of a partnership unit as of that
date was determined to be $0.83 per unit, and was based upon retrospective valuations performed as of January&nbsp;1, 2011 and April&nbsp;2, 2011. The financial statement impact of these
stock-based awards is immaterial. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
judgments made in determining the volatility and risk-free rate assumptions to be used in calculating the estimated grant date fair value of the stock option awards are consistent with
the judgments made in determining such inputs for the partnership units valuations. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>57 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=62,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=780941,FOLIO='57',FILE='DISK108:[11ZAS1.11ZAS12701]DE12701A.;40',USER='KSEAMON',CD='29-OCT-2011;20:08' -->
<A NAME="page_de12701_1_58"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="de12701_results_of_operations"> </A>
<A NAME="toc_de12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  RESULTS OF OPERATIONS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table sets forth selected results of operations data for the periods presented and as a percentage of our revenue for those periods: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=1>


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 </FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="44pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="35pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="44pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="35pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="44pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="35pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="44pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="35pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="44pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="35pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>July&nbsp;2, 2011 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>June&nbsp;26, 2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=33 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;"><p style="font-family:times;margin-left:6pt;text-indent:-6pt;"><B> </B>&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=29 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Revenue</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>316,583</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>100</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>306,957</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>100</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>611,987</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>100.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>416,140</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>100.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>570,333</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>100.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Cost of goods sold</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>240,433</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>75.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>231,908</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>75.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>467,751</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>76.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>330,584</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>79.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>487,052</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>85.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Gross profit</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>76,150</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>24.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>75,049</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>24.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>144,236</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>23.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>85,556</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>20.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>83,281</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>14.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Operating expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Sales, general and administrative</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>38,371</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>12.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>31,343</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>65,271</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>59,656</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>14.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>62,763</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>11.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Research and development</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,193</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,817</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9,532</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9,244</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10,663</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Restructuring</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,464</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,782</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>18,129</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,692</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Goodwill impairment</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Total operating expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>43,741</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>13.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>39,624</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>12.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>79,585</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>13.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>87,029</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>20.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>89,631</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>15.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Operating income / (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>32,409</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>35,425</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>11.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>64,651</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,473</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (0.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(6,350</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (1.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Other income&#151;net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,031</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,005</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2.020</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>224</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,768</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Embedded derivative gain / (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>17,472</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(58,162</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (18.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>25,030</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(27,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (6.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>115,352</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>20.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Interest expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(39,032</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (12.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(26,997</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (8.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(72,134</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (11.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(54,620</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (13.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(58,478</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (10.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Interest income</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>94</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>159</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>339</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>453</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,307</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Foreign exchange gain / (loss)&#151;net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(20,402</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (6.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>27,863</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9,596</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(2,116</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (0.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(341</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Income / (loss) from continuing operations, before income taxes</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(8,428</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (2.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(18,707</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (6.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>29,502</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(85,045</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (20.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>54,258</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>9.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Provision for income taxes</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(10,679</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (3.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(11,818</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (3.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(24,420</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (4.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(6,504</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (1.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(6,804</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (1.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Net income / (loss) from continuing operations</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(19,107</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (6.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(30,525</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (9.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>0.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(91,549</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1> (22.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>47,454</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="de12701_six_months_ended_july_2,_2011___six02178"> </A>
<A NAME="toc_de12701_2"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  Six Months Ended July&nbsp;2, 2011 Compared to Six Months Ended June&nbsp;26, 2010    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I>Overview</I></FONT><FONT SIZE=2>&#151;Although unit demand was less robust, overall revenues increased modestly for
the six months ended July&nbsp;2, 2011 compared to the six months ended June&nbsp;26, 2010; however, the six months ended July&nbsp;2, 2011 were unfavorably affected by incremental
$4.6&nbsp;million operating expenses related to preparation for our initial public offering, and overall operating income was $3.0&nbsp;million, or 8.5%, lower than in the comparable prior year
period. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Revenue&#151;  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>June&nbsp;26, 2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=13 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><B> </B>&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Asia</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>185,165</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>176,480</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8,685</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Americas</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>56,856</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>63,747</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(6,891</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (10.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Europe</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>74,562</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>66,730</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7,832</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total revenue</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>316,583</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>306,957</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9,626</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><B>58 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=63,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=797429,FOLIO='58',FILE='DISK108:[11ZAS1.11ZAS12701]DE12701A.;40',USER='KSEAMON',CD='29-OCT-2011;20:08' -->
<A NAME="page_de12701_1_59"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Total revenue was $316.6&nbsp;million for the six months ended July&nbsp;2, 2011 compared to $307.0&nbsp;million for the six months ended June&nbsp;26,
2010, an increase of $9.6&nbsp;million, or 3.1%. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Revenues
in Asia for the six months ended July&nbsp;2, 2011 increased $8.7&nbsp;million, or 4.9%, over the comparable prior year period, driven by improved unit volumes of
high-performance products, even though unit volumes of non-high-performance products and overall unit volumes lagged compared to the prior year period. Revenue for
the six months ended July&nbsp;2, 2011 also benefited from higher pricing to recover increased costs of raw materials. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Revenues
in the Americas were $6.9&nbsp;million, or 10.8%, lower for the six months ended July&nbsp;2, 2011 versus last year's comparable period. Lower unit volumes and lower revenues reflect the
weaker economic conditions in the United States in the current year period. In contrast, fundamental demand for electronics in the comparable prior year period was bolstered by inventory restocking of
basic materials within the supply chain. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Revenues
in Europe were $7.8&nbsp;million, or 11.7%, higher for the six months ended July&nbsp;2, 2011 versus the comparable period of 2010. Revenues for the current year were bolstered by sales
to customers in the solar energy and industrial sectors. A stronger euro to U.S. dollar exchange rate in the current year period accounted for approximately $4.2&nbsp;million, or just more than
half, of the increased revenue. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Demand
for our high-performance products continued to outpace demand for standard products. The relatively stronger demand for our high-performance products reflects our
continued marketing focus on these products and success in getting them qualified for new applications. Demand for these high-performance products is also relatively price-inelastic,
providing better opportunities to pass through material cost increases. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Cost of goods sold and gross profit&#151;  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="120%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="21pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>July&nbsp;2, 2011 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>June&nbsp;26, 2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=19 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><B> </B>&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cost of goods sold</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>240,433</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>75.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>231,908</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>75.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8,525</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>76,150</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>75,049</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,101</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Cost of goods sold was $240.4&nbsp;million for the six months ended July&nbsp;2, 2011, an increase of $8.5&nbsp;million, or 3.7%, over the comparable
prior period driven mainly by higher costs for raw material
and labor, partially offset by lower unit volumes and lower attendant variable manufacturing costs. Our gross margin was slightly lower for the six months ended July&nbsp;2, 2011 at 24.1% compared
to 24.4% gross margin achieved in the comparable prior year period due to the higher costs for raw material and labor; however, these increased costs were partially offset by an increased percentage
of sales of higher margin, high-performance products in 2011, as well as from pricing actions to pass through higher raw material costs to our customers. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Operating expenses</I></FONT><FONT SIZE=2>&#151;Overall, operating expenses increased by $4.1&nbsp;million, or 10.4%, for the six months ended July&nbsp;2, 2011 compared to the six months
ended June&nbsp;26, 2010. The increase in operating expenses </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>59 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=64,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=635043,FOLIO='59',FILE='DISK108:[11ZAS1.11ZAS12701]DE12701A.;40',USER='KSEAMON',CD='29-OCT-2011;20:08' -->
<A NAME="page_de12701_1_60"> </A>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>was
due to higher sales, general and administrative expenses and research and development expenses, partially offset by lower restructuring expenses, as more fully described below. </FONT></P>
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<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>July&nbsp;2, 2011 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>June&nbsp;26, 2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=19 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><B> </B>&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Sales, general and administrative expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>38,371</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>31,343</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,028</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>22.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Research and development expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,193</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,817</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>376</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,464</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(3,287</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (94.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>43,741</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>13.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>39,624</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,117</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Sales, general and administrative expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;SG&amp;A expense increased to $38.4&nbsp;million (12.1% of revenue) for the six months ended July&nbsp;2, 2011 from
$31.3&nbsp;million (10.2% of revenue) in the comparable prior year period. The increase in SG&amp;A expense was primarily due to higher audit fees, which increased $3.1&nbsp;million, and legal and
consulting fees, which were $1.7&nbsp;million higher than the prior year period. The increase in these fees is primarily related to this offering. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Research and development expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;R&amp;D expense increased 7.8% to $5.2&nbsp;million for the six months ended July&nbsp;2, 2011 from $4.8&nbsp;million for the
six months ended June&nbsp;26, 2010. The increase in R&amp;D expense was primarily due to higher personnel-related expenses. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Restructuring expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Restructuring expense was $0.2&nbsp;million for the six months ended July&nbsp;2, 2011, versus $3.5&nbsp;million in the comparable
prior year period. This steep reduction of $3.3&nbsp;million reflects the substantial completion of our restructuring activities in the prior year. The minimal restructuring expense for the six
months ended July&nbsp;2, 2011 is primarily for ongoing maintenance expenses related to the previous closures of various facilities. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="de12701_operating_income_/_(loss)"> </A>
<A NAME="toc_de12701_3"> </A>
<BR></FONT><FONT SIZE=2><I>Operating income / (loss)    <BR>    </I></FONT></P>
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<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>July&nbsp;2, 2011 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>June&nbsp;26, 2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=19 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><B> </B>&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Asia</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>32,569</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>33,997</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1,428</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (4.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Americas</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7,957</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9,696</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1,739</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (17.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Europe</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,299</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,775</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4,524</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>254.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Corporate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(14,416</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (4.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(10,043</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (3.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4,373</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>43.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating income / (loss)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>32,409</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>35,425</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(3,016</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (8.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Operating income was $3.0&nbsp;million, or 8.5%, lower in the first half of 2011 compared to the first half of 2010. Revenue and operating income in the
current period benefited from an improved product mix and more aggressive pricing actions to recover higher costs of raw materials than in the prior year period, all of which more than offset the
impacts of lower unit volume. Operating income was also unfavorably impacted by the increase in audit, legal and consulting fees related to this offering. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>60 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=65,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=231810,FOLIO='60',FILE='DISK108:[11ZAS1.11ZAS12701]DE12701A.;40',USER='KSEAMON',CD='29-OCT-2011;20:08' -->
<A NAME="page_de12701_1_61"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
Asia, despite higher revenues in the current year period, operating income was $1.4&nbsp;million lower than in the prior year period as a result of lower gross margins, despite an improved
product mix, due to higher material costs not fully passed through to customers and inflationary pressures on utilities and other factory inputs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Operating
income in the Americas in the 2011 period was $1.7&nbsp;million below the comparable prior year period as a result of the unfavorable profit impact of lower revenues. This was moderated by
an improved gross margin, arising from a favorable product mix, and lower operating expenses. However, pricing to pass through material cost increases, without an additional profit component, has the
arithmetic effect of diluting gross margin. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Operating
income in Europe was $4.5&nbsp;million higher in the first half of 2011 compared to the first half of 2010. Revenue and operating income in the first half of 2011 benefited from more
aggressive pricing actions to recover higher costs of raw materials than in the comparable prior year period, which offset the impact of lower unit volumes. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Corporate
reflects administrative, legal, sales and marketing, and research and development expenses. The increased Corporate operating loss for the first six months of 2011 compared to the first six
months of 2010 was primarily due to higher SG&amp;A expense incurred for outside professional services related to the Company's decision to proceed with an IPO. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Other non-operating income / (expense)  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>July&nbsp;2, 2011 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>June&nbsp;26, 2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=19 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><B> </B>&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other income&#151;net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,031</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,005</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,974</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (65.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative gain / (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17,472</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(58,162</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (18.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>75,634</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>130.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(39,032</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (12.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(26,997</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (8.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(12,035</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (44.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest income</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>94</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>159</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(65</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (40.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign exchange gain / (loss)&#151;net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(20,402</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (6.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27,863</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(48,265</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (173.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total non-operating income / (expense)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(40,837</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (12.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(54,132</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (17.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>13,295</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>24.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Other income&#151;net.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Other income&#151;net decreased to $1.0&nbsp;million for the six months ended July&nbsp;2, 2011 from $3.0&nbsp;million
for the six months ended June&nbsp;26, 2010. The comparable prior year period included a gain of $3.0&nbsp;million from a favorable settlement of a matter related to our intellectual property
rights. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Embedded derivative gain / (loss).</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The embedded derivative gain / (loss) reflects any change in the values of the embedded derivatives in some of our financial
instruments. The change in value is determined quarterly. The conversion feature of the convertible preferred certificates and the mandatory pre-payment features of the senior secured
credit agreement and mezzanine credit agreement are considered embedded derivatives. There was an embedded derivative gain of $17.5&nbsp;million for the six months ending July&nbsp;2, 2011, of
which $11.9&nbsp;million related to the convertible preferred certificates and $5.6&nbsp;million related to the loans under the senior secured credit agreement and mezzanine credit agreement. For
the six months ended June&nbsp;25, 2010, we recorded an embedded derivative loss of $58.2&nbsp;million, all of which related to the convertible preferred certificates. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>61 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=66,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=17193,FOLIO='61',FILE='DISK108:[11ZAS1.11ZAS12701]DE12701A.;40',USER='KSEAMON',CD='29-OCT-2011;20:08' -->
<A NAME="page_de12701_1_62"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
Sponsors will effectively convert their investments in Isola from convertible preferred certificates to ordinary shares in connection with this offering, and thereafter we will not incur further
financial effects related to the convertible preferred certificates. However, any change in the value of the embedded derivative of the convertible preferred certificates as of the date the offering
is completed will be included in this account in the period in which the offering occurs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Interest expense and interest income.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Total interest expense increased $12.0&nbsp;million, or 44.6%, to $39.0&nbsp;million for the six months ended
July&nbsp;2, 2011 from $27.0&nbsp;million for the six months ended June&nbsp;26, 2010. The increase in interest expense is due to the amortization in the current quarter of OID and deferred loan
origination fees related to our senior secured and mezzanine credit agreements as well as the higher outstanding principal debt balances under these facilities compared to the amounts outstanding
under the credit agreements in place last year. Interest expense for the six months ended July&nbsp;2, 2011 included $5.0&nbsp;million of OID amortization ($2.1&nbsp;million related to our
senior secured debt and $2.9&nbsp;million related to our mezzanine debt) as well as $1.0&nbsp;million amortization of loan origination costs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Foreign exchange gain / (loss)&#151;net.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We recorded a net foreign exchange loss of $20.4&nbsp;million for the six months ended July&nbsp;2, 2011
compared to a net foreign exchange gain of $27.9&nbsp;million for the six months ended June&nbsp;26, 2010. The change was primarily driven by the weakened euro versus the U.S. dollar in the
current period. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Provision for income taxes  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="" style="font-family:times;"></TD>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="28pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>July&nbsp;2, 2011 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>June&nbsp;26, 2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
Revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=19 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><B> </B>&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income / (loss) before tax</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(8,428</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (2.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(18,707</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (6.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10,279</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>54.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax provision</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(10,679</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (3.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(11,818</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (3.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,139</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Effective tax rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (126.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (63.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (63.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The effective tax rates for each of the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010 was based on our forecasted annualized effective tax rates
and adjusted for discrete items that occurred within the periods. The forecasted annualized effective rates are (146.3%) and (60.3%) for the six months ended July, 2, 2011 and June&nbsp;26, 2010,
respectively. Our provision for income taxes decreased primarily as a result of the change in the mix of earnings among the tax jurisdictions in which we operate. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="de12701_fiscal_year_2010_compared_to_fiscal_year_2009"> </A>
<A NAME="toc_de12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  Fiscal Year 2010 Compared to Fiscal Year 2009    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Overview</I></FONT><FONT SIZE=2>&#151;The worldwide demand for our products, which had begun to recover in the third quarter of 2009, continued to improve in 2010. The Company was
well-positioned to benefit from the economic recovery as a result of improved manufacturing capacity utilization and cost reduction measures implemented in the prior year. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>62 </B></FONT></P>

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</FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Revenue&#151;  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="28pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=13 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Asia</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>349,421</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>226,588</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>122,833</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>54.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Americas</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>129,109</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100,275</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>28,834</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>28.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Europe</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>133,457</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>89,277</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>44,180</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>49.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total revenue</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>611,987</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>416,140</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>195,847</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>47.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Total revenue increased by $195.8&nbsp;million, or 47.1%, from 2009 to 2010, reflecting improvement in the global economy boosted by the restocking of
inventory within the electronics supply chain. Revenue in each geographic segment benefited from higher unit volumes, higher pricing, and a more favorable sales mix, reflecting an increased percentage
of sales of high-performance products in 2010 as compared to 2009. Revenue in Asia increased $122.8&nbsp;million, or 54.2%; revenue in the Americas increased $28.8&nbsp;million, or
28.8%; and revenue in Europe increased $44.2&nbsp;million, or
49.5%. The revenue increase in Europe was moderated by the weaker average euro to U.S. dollar exchange rate during 2010 compared to 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Demand
for our high-performance products outpaced demand for standard products, with gross sales for our high-performance products increasing 52.9%
year-over-year. Gross sales from our high-Tg, lead-free and high-speed digital product lines, as described in "Business&#151;Product
Markets and Product Applications", increased by 63.2% and 98.7%, respectively, in 2010. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Gross
sales for our high-performance and standard products are shown below: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="28pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Gross Sales<SUP>(1)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>High-performance</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>High-Tg, lead-free</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>285,635</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>175,066</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>110,569</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>63.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>High-speed digital</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>94,662</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>47,630</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>47,032</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>98.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Military, specialty and other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>117,615</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>103,026</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14,589</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total high-performance</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>497,912</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>325,722</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>172,190</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>52.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Standard</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>131,023</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>102,444</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>28,579</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>27.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total gross sales</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>628,935</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>428,166</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>200,769</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>46.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" >


  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Gross sales represents total revenue excluding certain adjustments for cash discounts, rebates, and other sales adjustments that cannot be allocated to a specific product segment.
These adjustments totaled $16.9&nbsp;million in 2010 and $12.1&nbsp;million in 2009 respectively. Total revenue was $612.0&nbsp;million for 2010 and $416.1&nbsp;million in 2009. Management
uses gross sales as a measure of operating performance.  </I></FONT></DD></DL>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>63 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=68,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=79208,FOLIO='63',FILE='DISK108:[11ZAS1.11ZAS12701]DG12701A.;82',USER='KSEAMON',CD='29-OCT-2011;18:57' -->
<A NAME="page_dg12701_1_64"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Cost of goods sold and gross profit&#151;  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
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<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="28pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2010 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=19 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cost of goods sold</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>467,751</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>76.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>330,584</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>79.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>137,167</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>41.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>144,236</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>23.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>85,556</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>58,680</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>68.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Cost of goods sold increased by $137.2&nbsp;million, or 41.5%, from 2009 to 2010, primarily as a result of increased manufacturing volumes. Our gross profit
increased to 23.6% in 2010 from 20.6% in 2009, representing a 3.0&nbsp;percentage point improvement. This improvement in gross profit resulted primarily
from the better manufacturing capacity utilization combined with an increased percentage of sales of our higher margin, high-performance products in 2010. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Operating expenses.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Overall, operating expenses decreased $7.4&nbsp;million from 2009 to 2010, representing an 8.6% decrease, primarily due to lower
restructuring expense, as described below. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"130%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2010 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=19 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Sales, general and administrative expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>65,271</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>59,656</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,615</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Research and development expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,532</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,244</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>288</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,782</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18,129</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(13,347</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (73.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>79,585</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>13.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>87,029</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>20.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(7,444</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (8.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Sales, general and administrative expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;SG&amp;A expense increased by $5.6&nbsp;million from 2009 to 2010, representing a 9.4% increase. The increase in SG&amp;A
expense is attributable to higher personnel costs, due to higher variable incentive compensation (bonus), and professional fees which were offset by a decrease in bad debt expense. In fiscal 2009,
cost reduction measures, including compensation-related measures, were taken as our revenue declined. In fiscal 2010, we saw an increase in sales and were able to reinstitute our bonus program which
allowed us to award $4.1&nbsp;million in bonuses and increase salaries by $3.6&nbsp;million worldwide. Other professional fees increased by $0.9&nbsp;million in fiscal 2010 as we began investing
in new information technology projects. Fiscal 2009 also was adversely impacted by the write-off of $2.8&nbsp;million of uncollectible accounts receivable. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Restructuring expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Restructuring expense decreased by $13.3&nbsp;million from 2009 to 2010. In 2009, we incurred substantial expenses in connection with the
closure of facilities in Fremont, California, and Dalian, China, and professional fees related to these closures. In 2010, restructuring expense consisted primarily of professional fees related to
financial restructuring activities and some residual expenses related to the previous year's facility closures. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>64 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=69,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=297126,FOLIO='64',FILE='DISK108:[11ZAS1.11ZAS12701]DG12701A.;82',USER='KSEAMON',CD='29-OCT-2011;18:57' -->
<A NAME="page_dg12701_1_65"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dg12701_operating_income_/_(loss)"> </A>
<A NAME="toc_dg12701_1"> </A>
<BR></FONT><FONT SIZE=2><I>Operating income / (loss)    <BR>    </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2010 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=19 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Asia</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>58,777</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>21,755</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>37,022</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>170.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Americas</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>16,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2,561</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14,339</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>559.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Europe</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3,958</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(8,578</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (2.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12,536</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>146.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Corporate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(14,984</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (2.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(17,211</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (4.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2,227</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating income / (loss)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>64,651</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1,473</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>66,124</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4,489.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Consolidated operating income increased to $64.7&nbsp;million in fiscal 2010, up substantially from a loss of $1.5&nbsp;million in the prior year. Operating
income improved in each geographic segment due to higher revenue in fiscal 2010 compared to fiscal 2009, as a result of rebounding economic conditions, increasing demand for electronic products and
restocking of depleted PCB material inventories by some of our customers. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Operating
income in each segment also benefitted from higher rates of manufacturing capacity utilization and the increased percentages in overall sales of higher margin, high-performance
products. The Corporate operating loss decreased to a loss of $15.0&nbsp;million in fiscal 2010 from a loss of $17.2&nbsp;million in the prior year. This was primarily a result of lower
restructuring expense in 2010, partially offset by greater expense associated with variable incentive compensation awards that were reinstituted in 2010. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Other non-operating income / (expense)  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"130%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2010 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=19 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other income / (expense)&#151;net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,020</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>224</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,796</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>801.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative gain / (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25,030</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(27,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (6.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>52,543</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>191.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(72,134</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (11.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(54,620</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (13.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(17,514</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (32.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest income</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>339</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>453</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(114</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (25.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign exchange gain / (loss)&#151;net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,596</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,116</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (0.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>11,712</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>553.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total non-operating income (expense)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(35,149</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (5.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(83,572</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (20.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>48,423</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>57.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Other income&#151;net.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Other income&#151;net increased by $1.8&nbsp;million from 2009 to 2010, primarily due to a gain of $3.0&nbsp;million in
the current year from a favorable settlement of a matter related to our intellectual property rights. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Embedded derivative gain / (loss).</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;There was an embedded derivative gain of $25.0&nbsp;million in 2010 compared to a loss of $27.5&nbsp;million in 2009. The
conversion feature of the convertible preferred certificates and the mandatory pre-payment features of the senior secured credit agreement and mezzanine credit agreement are considered
embedded derivatives. In 2010, the embedded derivative gain related to the convertible preferred certificates was $21.7&nbsp;million and the embedded derivative gain related to the senior </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>65 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=70,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=90221,FOLIO='65',FILE='DISK108:[11ZAS1.11ZAS12701]DG12701A.;82',USER='KSEAMON',CD='29-OCT-2011;18:57' -->
<A NAME="page_dg12701_1_66"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>secured
credit agreement and mezzanine credit agreement was $3.3&nbsp;million. In 2009, there was an embedded derivative loss of $27.5&nbsp;million, all of which was related to the convertible
preferred certificates. Changes in the valuations of the Company from period to period account for the gains or losses in this account. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Interest expense and interest income.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Total interest expense increased by $17.5&nbsp;million, or 32.1%, from 2009 to 2010. In fiscal 2010, we recorded
$9.5&nbsp;million of additional interest on accrued interest on our first- and second-lien credit facilities. In addition, fiscal 2010 interest expense included $3.6&nbsp;million of
PIK interest on our mezzanine debt, as well as $2.3&nbsp;million of OID amortization expense, of which $1.0&nbsp;million was attributable to the senior credit agreement and $1.3&nbsp;million was
attributable to the mezzanine credit agreement in 2010. We also expensed $2.8&nbsp;million of loan origination costs in 2010. At the end of fiscal 2010, the cash interest rate on our senior credit
agreement was 10.0%, and the interest rate on our mezzanine credit agreement was 16.0%, half payable in cash and half payable-in-kind ("PIK"). </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Foreign exchange gain / (loss)&#151;net.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We recorded a net foreign exchange gain of $9.6&nbsp;million in 2010, compared to a net foreign exchange loss of
$2.1&nbsp;million in 2009. This change was primarily due to the strengthening of the U.S. dollar against the euro in 2010. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Provision for income taxes  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"130%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2010 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=19 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income / (loss) before tax</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>29,502</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(85,045</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (20.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>114,547</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>134.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax provision</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(24,420</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (4.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(6,504</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (1.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(17,916</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (275.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Effective tax rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
82.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
(7.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
90.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Our provision for income taxes increased by approximately $17.9&nbsp;million from 2009 to 2010, primarily due to an increase in the reserve recorded for
uncertain tax positions, and an increase of income earned in the taxable jurisdictions. Our effective tax rate was (7.6)% for 2009, as compared to 82.8% in 2010. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dg12701_fiscal_year_2009_compared_to_fiscal_year_2008"> </A>
<A NAME="toc_dg12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  Fiscal Year 2009 Compared to Fiscal Year 2008    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I>Overview&#151;</I></FONT><FONT SIZE=2>Our operating results for 2009 were significantly impacted by the global
recession that began in 2008 and continued to deepen into the first half of 2009. We continued the implementation of various programs initiated in 2008 to improve manufacturing capacity utilization
and lower costs, and our operating results improved in the second half of 2009 as a result of the combination of these measures and improving economic conditions. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>66 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=71,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=192608,FOLIO='66',FILE='DISK108:[11ZAS1.11ZAS12701]DG12701A.;82',USER='KSEAMON',CD='29-OCT-2011;18:57' -->
<A NAME="page_dg12701_1_67"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Revenue&#151;  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=13 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Asia</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>226,588</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>310,379</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(83,791</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (27.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Americas</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100,275</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>132,987</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(32,712</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (24.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Europe</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>89,277</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>126,967</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(37,690</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (29.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total revenue</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>416,140</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>570,333</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(154,193</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (27.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Total revenue decreased by $154.2&nbsp;million to $416.1&nbsp;million in 2009 from $570.3&nbsp;million in 2008, a decrease of 27.0%. The reduction in
revenue was primarily attributable to the recessionary conditions that prevailed for most of 2009. Revenue in each geographic segment declined. Revenue in Asia decreased $83.8 or 27.0%; revenue in the
Americas decreased $32.7&nbsp;million or 24.6%; and revenue in Europe decreased $37.7&nbsp;million or 29.7%. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Demand
for our high-performance products proved more resilient to recessionary conditions than standard products, with gross sales of our high-performance products decreasing
21.0% year-over-year. Gross sales from our high-Tg, lead-free and high-speed digital product lines as described in
"Business&#151;Product Markets and Product Applications" decreased by 14.1% and 2.1%, respectively, in 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Gross
sales for our high-performance and standard products are shown below: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Gross Sales<SUP>(1)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>High-performance</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>High-Tg, lead-free</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>175,066</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>203,834</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(28,768</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (14.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>High-speed digital</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>47,630</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>48,635</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1,005</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (2.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Military, specialty and other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>103,026</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>159,967</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(56,941</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (35.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total high-performance</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>325,722</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>412,436</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(86,714</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (21.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Standard</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>102,444</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>170,020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(67,576</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (39.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total gross sales</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>428,166</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>582,456</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(154,290</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (26.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" >


  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Gross sales represents total revenue excluding certain adjustments for cash discounts, rebates, and other sales adjustments that cannot be allocated to a specific product segment.
These adjustments totaled $12.1&nbsp;million in 2009 and $12.2&nbsp;million in 2008 respectively. Total revenue was $416.1&nbsp;million for 2009 and $570.3&nbsp;million in 2008. Management
uses gross sales as a measure of operating performance.  </I></FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Cost of goods sold and gross profit&#151;  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"130%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2009 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=19 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cost of goods sold</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>330,584</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>79.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>487,052</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>85.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(156,468</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (32.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>85,556</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>83,281</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2,275</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>67 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=72,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=926620,FOLIO='67',FILE='DISK108:[11ZAS1.11ZAS12701]DG12701A.;82',USER='KSEAMON',CD='29-OCT-2011;18:57' -->
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
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 </B></FONT></P>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Total cost of goods sold in 2009 decreased by $156.5&nbsp;million, or 32.1%, compared to 2008, primarily as a result of lower levels of sales and production
in a recessionary environment. Gross margin, however, improved to 20.6% in 2009 from 14.6% in 2008. The improvement in gross margin resulted from the higher levels of manufacturing capacity
utilization in our remaining facilities following the closure of three facilities during 2009. Gross margin in 2009 also benefited from an improved product mix with revenue of higher margin,
high-performance products comprising a greater percentage of overall revenue. Although raw materials costs (especially for copper) increased steadily throughout 2009, we were generally
successful in passing through these increased costs to our customers. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Operating expenses.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses in 2009 decreased by $2.6&nbsp;million, or 2.9%, from the prior year to $87.0&nbsp;million. The absence in 2009 of
the goodwill impairment charge incurred in the prior year, lower expenditures for SG&amp;A (arising from lower bad debt expense and a number of cost containment actions), and lower R&amp;D expenses were only
partially offset by higher restructuring costs arising from the closure of two of our manufacturing facilities, as more fully described below. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2009 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=19 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Sales, general and administrative expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>59,656</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>62,763</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>11.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(3,107</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (5.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Research&nbsp;&amp; development expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,244</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,663</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,419</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (13.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18,129</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,692</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,437</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>135.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Goodwill impairment</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(8,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>87,029</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>20.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>89,631</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,602</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (2.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Sales, general and administrative expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;SG&amp;A expense decreased by $3.1&nbsp;million from 2008 to 2009, a 5.0% reduction. This was primarily attributable to
lower bad debt expense in 2009 compared to 2008. Bad debt expense in fiscal 2009 was $2.8&nbsp;million compared to $8.2&nbsp;million in fiscal 2008, a reduction of $5.4&nbsp;million. A number of
our customers became insolvent during 2008 as a result of the recession. SG&amp;A expense in fiscal 2009 also benefited approximately $1.9&nbsp;million from a number of cost-saving measures,
including the suspension of matching grants for U.S. employees' 401(k) contributions, elimination of a company-wide bonus plan, mandatory salary reductions (where legally possible), staff
reductions and other cost-saving measures. Fiscal 2008 SG&amp;A expense included a gain of $2.8&nbsp;million related to the sale of land and buildings in the Philippines. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Research and development expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;R&amp;D expense decreased by $1.4&nbsp;million, or 13.3%, from 2008 to 2009, primarily due to reduced purchases of materials,
supplies and services and lower personnel-related expense in Asia, all of which was partially offset by increased expense incurred in connection with the successful legal defense of our intellectual
property rights. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Restructuring expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Restructuring expense in 2009 increased $10.4&nbsp;million, or 135.7%, over the
prior year, reflecting the costs of closing manufacturing facilities in Fremont, California and Dalian, China, and related professional fees. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Goodwill impairment.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In fiscal 2008 we recorded a non-cash charge of $8.5&nbsp;million for the impairment of goodwill. The goodwill impairment was a
result of the reduction in business related to the general decline of the global economy. This charge reduced the goodwill balance to zero. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>68 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=73,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=925159,FOLIO='68',FILE='DISK108:[11ZAS1.11ZAS12701]DG12701A.;82',USER='KSEAMON',CD='29-OCT-2011;18:57' -->
<A NAME="page_dg12701_1_69"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dg12701_operating_income_/_(loss)_1"> </A>
<A NAME="toc_dg12701_3"> </A>
<BR></FONT><FONT SIZE=2><I>Operating income / (loss)    <BR>    </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2009 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=19 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Asia</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>21,755</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>27,684</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(5,929</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (21.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Americas</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2,561</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(11,884</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (2.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14,445</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>121.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Europe</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(8,578</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (2.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(6,523</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (1.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(2,055</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (31.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Corporate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(17,211</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (4.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(15,627</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (2.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1,584</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (10.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating income / (loss)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1,473</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(6,350</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (1.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4,877</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>76.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>There was an operating loss of $1.5&nbsp;million in fiscal 2009 compared to an operating loss of $6.4&nbsp;million in the prior year. The profit impact of
lower revenue in 2009 was partially offset by improved gross margins as a percentage of revenues and lower operating expenses. Gross profits benefited from increased sales of
high-performance products in 2009 and improved manufacturing capacity utilization. Lower operating expenses were primarily due to a decrease in SG&amp;A expense, offset by higher restructuring
expenses associated with the closure of three manufacturing facilities in 2009 and the absence of further impairments of goodwill. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
Asia, operating income in fiscal 2009 decreased to $21.8&nbsp;million from $27.7&nbsp;million in fiscal 2008, a decline of $5.9&nbsp;million, or 21.4%. This decline in operating income was
primarily due to the profit impact of lower revenue, partially offset by improved gross profit, which arose from higher levels of manufacturing capacity utilization following the closure of the
facility in Dalian, China and an increased percentage of higher margin, high-performance products in the overall revenue mix. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
the Americas, there was modest operating income in fiscal 2009 of $2.6&nbsp;million, which compared favorably to the operating loss of $11.9&nbsp;million in the prior year. Although revenue
decreased nearly
24.6%, lower fixed manufacturing cost and lower operating expenses, both primarily due to the closure of our Fremont facility and other cost reduction measures taken during the year, more than offset
the profit impact of lower revenue. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
Europe, the operating loss widened in fiscal 2009 to $8.6&nbsp;million, an increase of $2.1&nbsp;million from the operating loss of $6.5&nbsp;million in fiscal 2008. The higher operating loss
in 2009 resulted from the profit impact of lower revenue, only partially offset by a higher gross profit and lower operating expenses following the discontinuance of operations at the Mas Italia
facility and the consolidation of European laminate production in Germany in 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
operating loss attributable to Corporate was $17.2&nbsp;million in fiscal 2009, an increase of $1.6&nbsp;million over the prior year. The increase was primarily due to higher restructuring
charges which increased $10.4&nbsp;million, offset to a significant extent by lower SG&amp;A expense. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>69 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=74,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=637770,FOLIO='69',FILE='DISK108:[11ZAS1.11ZAS12701]DG12701A.;82',USER='KSEAMON',CD='29-OCT-2011;18:57' -->
<A NAME="page_dg12701_1_70"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Other non-operating income / (expense)  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"140%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2009 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=19 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other income (expense), net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>224</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,768</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,544</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (91.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative gain / (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(27,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (6.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>115,352</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>20.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(142,865</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (123.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(54,620</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (13.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(58,478</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (10.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,858</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest income</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>453</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,307</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(854</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (65.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign exchange gain / (loss)&#151;net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,116</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (0.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(341</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,775</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (520.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total non-operating income / (expense)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(83,572</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (20.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>60,608</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(144,180</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2> (237.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Other income&#151;net.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Other income&#151;net decreased in 2009 by $2.5&nbsp;million, or 91.9%, over the prior year. Other income&#151;net in
2009 and 2008 consisted primarily of royalty income. Royalty income decreased in fiscal 2009 on lower industry-wide demand for the technologies on which royalties are based. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Embedded derivative gain / (loss).</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;There was an embedded derivative loss of $27.5&nbsp;million in 2009
compared to a gain of $115.4&nbsp;million in 2008. The embedded derivative gain / (loss) in both years was related to the convertible preferred certificates. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Interest expense.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Interest expense declined in 2009 by $3.9&nbsp;million, or 6.6%, over the prior year. The decline reflects the absence in 2009 of the partial
write-off of deferred loan origination costs required in 2008 as a result of amendments to the first- and second-lien credit agreements. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Foreign exchange gain / (loss)&#151;net.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We recorded a net foreign exchange loss of $2.1&nbsp;million in 2009 and $0.3&nbsp;million in 2008. The
difference was due to strengthening of the euro against the U.S. dollar. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Provision benefit for income taxes  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2009 </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Change </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>% of<BR>
revenue</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>%</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=19 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income / (loss) before tax</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(85,045</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (20.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>54,258</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(139,303</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (256.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax provision</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(6,504</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (1.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(6,804</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>300</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Effective tax rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
(7.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
12.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
(20.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Our provision for income taxes decreased by $0.3&nbsp;million, or 4.4%, from 2008 to 2009, primarily due to fluctuations in income earned in taxable
jurisdictions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>70 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=75,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=708554,FOLIO='70',FILE='DISK108:[11ZAS1.11ZAS12701]DG12701A.;82',USER='KSEAMON',CD='29-OCT-2011;18:57' -->
<A NAME="page_dg12701_1_71"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dg12701_liquidity_and_capital_resources"> </A>
<A NAME="toc_dg12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  LIQUIDITY AND CAPITAL RESOURCES    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dg12701_liquidity"> </A>
<A NAME="toc_dg12701_5"> </A></FONT> <FONT SIZE=2><B>  Liquidity    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We have historically financed our operations, including requirements for our working capital, fixed capital and pension funding, through cash
generated from operations, including operations outside of the U.S., and various lending arrangements. Tax consequences resulting from the transfer of earnings from the Company's various non-U.S.
operating subsidiaries to the Company's U.S. subsidiaries would have an immaterial effect on our financial position, results of operations and cash flows. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>At
July&nbsp;2, 2011 we had working capital (current assets less current liabilities) of $79.3&nbsp;million. Of this amount, unrestricted cash and cash equivalents was $56.0&nbsp;million.
Restricted cash at July&nbsp;2, 2011 was $2.0&nbsp;million (primarily to support letters of credit and retirement obligations in Germany). </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Based
on our current level of operations and anticipated growth, we believe that our cash flow from operations and other sources of liquidity, including cash and cash equivalents and current
borrowings, will provide adequate funds for ongoing operations, planned capital expenditures, debt service and other requirements for at least the next 12&nbsp;months. Our future capital
requirements will depend on many factors, including our growth rate and related working capital requirements, the timing and extent of our research and development efforts, the level of our sales and
marketing activities and capital expenditures. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
have budgeted $14.3&nbsp;million for cash expenditures related to capital expenditures for 2011, primarily for cost reduction projects in the areas of process and quality improvements, of which
we expended $4.8&nbsp;million for the six months ended July&nbsp;2, 2011. Our cash expenditures related to capital expenditures totaled $15.7&nbsp;million in 2010 and $6.2&nbsp;million in
2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dg12701_our_credit_agreements_prior_to_the_offering"> </A>
<A NAME="toc_dg12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  Our Credit Agreements Prior to the Offering    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prior to the offering, our primary lending arrangements consist of a senior secured credit agreement and a mezzanine credit agreement entered into
with a syndicate of lenders, including our Sponsors. We intend to fully repay all loans outstanding under both of these agreements with the proceeds of this offering and the proceeds of a new senior
secured term loan that we intend to enter into concurrently with the closing of this offering. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Senior secured credit agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our senior secured credit agreement provides for a senior secured term loan of $210.0&nbsp;million, the full amount of which was
drawn at closing on September&nbsp;30, 2010. Loans under the senior credit agreement were issued at a discount of $28.5&nbsp;million. The proceeds were used to refinance part of our
then-existing first- and second-lien term loans, as well as to pay other fees and expenses related to our senior secured credit agreement. Loans under the senior secured
agreement bear interest, at our option, at a rate per annum equal either to a base rate (that can be no less than 3%) plus 7%, or an adjusted Eurodollar rate (that can be no less than 2%) plus 8%. As
of July&nbsp;2, 2011, we had principal of $210.0&nbsp;million outstanding under the senior secured credit agreement, bearing interest at 10% per annum and $25.3&nbsp;million of unamortized
original issue discount resulting in a net balance of $184.7&nbsp;million. Loans under this agreement mature on September&nbsp;30, 2015. The borrower under this agreement is our wholly-owned
subsidiary, Isola USA Corp., and loans under the agreement are guaranteed by various Isola Group&nbsp;Ltd. subsidiaries. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Mezzanine credit agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;30, 2010, we issued an initial principal amount of $175.0&nbsp;million in unsecured term loans pursuant to our
mezzanine credit agreement. The unsecured term loans were issued at a discount of $70.4&nbsp;million. The proceeds were used in part to refinance our then-existing first- and
second-lien term debt, as well as to pay other fees and expenses related to the mezzanine credit agreement. The unsecured term loans issued pursuant to the mezzanine credit agreement bear
interest at a rate of 16% per annum, with half (8% per annum) payable in cash and the other half (8% </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>71 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>per
annum) payable by accreting such amount to the outstanding principal amount of the unsecured term loans. The accretion of interest is referred to as payment-in-kind, or
PIK, interest expense. As of July&nbsp;2, 2011, we had principal of $185.7&nbsp;million outstanding under the mezzanine credit agreement, which included $10.7&nbsp;million of accreted PIK
interest. The unamortized original issue discount was $66.2&nbsp;million, resulting in a net balance of $119.5&nbsp;million. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company incurred $19.2&nbsp;million of loan origination costs pursuant to the senior secured credit agreement and the mezzanine credit agreement. Recognition of these costs has been deferred and
is amortized to interest expense over the terms of the agreements. As of July&nbsp;2, 2011, we had $17.4&nbsp;million of unamortized loan origination costs of which $2.9&nbsp;million was
included in current assets and $14.5&nbsp;million was included in long-term assets on our consolidated balance sheet. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
senior secured credit agreement and mezzanine credit agreement require us to maintain certain covenants that restrict our ability to operate our business, including, but not limited to,
restrictions on the ability of the borrower and certain Isola group subsidiaries to (i)&nbsp;dispose of assets or stock; (ii)&nbsp;incur additional indebtedness and guarantee obligations;
(iii)&nbsp;pay certain dividends; (iv)&nbsp;create liens on assets; (v)&nbsp;make investments, loans or advances; (vi)&nbsp;restrict distributions to the borrowers or guarantors from their
subsidiaries; (vii)&nbsp;engage in mergers or consolidations; (viii)&nbsp;engage in certain transactions with affiliates; (ix)&nbsp;incur additional negative pledges; (x)&nbsp;incur capital
expenditures; (xi)&nbsp;change our fiscal year or accounting practices or the lines of business in which we and our subsidiaries are involved; (xii)&nbsp;enter into sale-leaseback
transactions; (xiii)&nbsp;prepay principal of, premium, or interest on, or redeem, purchase, retire, defease, or create a sinking fund or make a similar payment with respect to, any subordinated
indebtedness and certain other debt; (xiv)&nbsp;change the conduct of business; (xv)&nbsp;conduct activities of any parent holding company; (xvi)&nbsp;amend our organizational documents;
(xvii)&nbsp;cease to keep in full force and effect our corporate existence and all rights, franchises, licenses and permits material to our business; (xviii)&nbsp;not pay our taxes or certain
claims when they are due; or (xix)&nbsp;allow insurance to expire. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, our senior secured credit agreement requires us to maintain certain financial and operating covenants, including compliance with an interest coverage ratio and a leverage ratio. The
interest coverage ratio is the ratio of Consolidated Adjusted EBITDA to consolidated interest expense for a rolling four-fiscal quarter period. At July&nbsp;2, 2011, the required
interest coverage ratio was at 1.75:1.00, and our actual ratio was 2.81:1.00. The required interest coverage ratio increases
over time, to 2.00:1.00 effective March&nbsp;31, 2012 and increasing to 2.25:1.00 effective December&nbsp;28, 2013. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
leverage ratio is the ratio of consolidated total secured debt to Consolidated Adjusted EBITDA for a rolling four-fiscal quarter period. At July&nbsp;2, 2011, the maximum allowed
leverage ratio was at 3.35:1.00, and our actual leverage ratio was 2.19:1.00. The maximum leverage ratio decreases over time, to 3.25:1.00 effective December&nbsp;31, 2012 and decreasing to
2.25:1.00 effective June&nbsp;28, 2014. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
definition of Consolidated Adjusted EBITDA under the senior secured credit agreement differs from Adjusted EBITDA used elsewhere in the prospectus. Under our senior secured credit agreement,
Consolidated Adjusted EBITDA includes additional add-backs to net income for certain pension costs, property and other taxes, and certain other expenses. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dg12701_our_credit_facilities_following_the_offering"> </A>
<A NAME="toc_dg12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  Our Credit Facilities Following the Offering    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In connection with this offering, we intend to enter into a new senior secured credit facility consisting of a $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million senior
secured term loan with a $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million senior secured revolving credit facility. The proceeds of the new term loan will be used to repay the portion of the loans under our
existing
senior secured credit and mezzanine agreements that are not repaid with the proceeds of this offering. We expect the new senior secured credit facility to be completed substantially concurrently with
the closing of this offering. Our entry into the new senior secured credit facility is conditioned on the completion of this offering. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
anticipate that the new senior secured credit facility will reduce our annual interest expense and subject us to less restrictive financial covenants. For additional information on the principal
terms of this facility, see "Description of Indebtedness&#151;Our New Credit Facilities". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>72 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="di12701_cash_flows"> </A>
<A NAME="toc_di12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  Cash Flows    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The table below sets forth selected cash flow data for the periods presented: </FONT></P>
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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fiscal year </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2,<BR>
2011</B></FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>June&nbsp;26,<BR>
2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=16 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash provided by / (used in) operating activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(55,348</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(15,099</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(16,837</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash provided by / used in investing activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,073</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,538</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(9,278</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6,974</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(3,758</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash provided by / (used in) financing activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6,696</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(486</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>60,642</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(13,072</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,758</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Effect of exchange rates on cash and cash equivalents</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,174</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,452</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,785</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>357</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Net increase / (decrease) in cash and cash equivalents</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,277</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,250</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,199</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(35,152</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(14,480</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Operating Activities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Cash provided by or (used in) operating activities is the cash we generate through running the business and reflects change in the balances
of operating assets and liabilities as well as adjustments to net income for non-cash income and expense items. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the six months ended July&nbsp;2, 2011, net cash provided by operating activities was $23.7&nbsp;million. The operating cash in-flow was provided by earnings from operations as
well as lower investment in inventories which more than offset an increase in accounts receivable. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the six months ended June&nbsp;26, 2010, net cash provided by operating activities was $23.7&nbsp;million. Increased receivables and inventories in support of increased revenues were partially
financed by higher levels of accounts payable as well as higher accrued interest payable under our then-defaulted loan agreements which was paid in the fourth quarter of fiscal 2010. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
fiscal 2010, net cash used in operating activities was $55.3&nbsp;million. The payment on September&nbsp;30, 2010 of $76.4&nbsp;million of interest expense which had been accrued since the
start of fiscal 2009 was the primary reason for the negative operating cash flows in 2010. Higher receivables and inventories also led to an increase in the cash used in operations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Net
cash used in operating activities was $15.1&nbsp;million in fiscal 2009. Net cash used in operations was affected by increases in receivables and inventory and reduced accounts payable as
several vendors shortened their credit terms to us. Cash outflows were partially offset by an increase of $42.7&nbsp;million in accrued liabilities, most of which was due to the accrual of interest
expense on the loans related to the then-defaulted first- and second-lien credit facilities that we were unable to pay. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
fiscal 2008, net cash used in operating activities was $16.8&nbsp;million. As revenues slowed in the last two quarters of 2008, we were able to reduce our balances in receivables and
inventories; however this was offset by lower accounts payable. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Investing Activities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Cash used in investing activities relates primarily to payments to, or proceeds from, restricted cash accounts, and payments for capital
expenditures. Most of our capital expenditures are to improve manufacturing productivity, to improve the quality of our products, to address environmental health and safety considerations or to
replace aging equipment. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>73 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=78,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=632822,FOLIO='73',FILE='DISK108:[11ZAS1.11ZAS12701]DI12701A.;46',USER='LSMITH',CD='30-OCT-2011;17:22' -->
<A NAME="page_di12701_1_74"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the six months ended July&nbsp;2, 2011, cash provided by investing activities was $1.1&nbsp;million. Purchases of property, plant and equipment were $4.8&nbsp;million, which was more than
offset by the release of restricted cash of $5.5&nbsp;million related to the closure of our Dalian, China facility and repayment of an entrustment loan in the second quarter of 2011. We also had a
small amount of proceeds from the disposition of property, plant and equipment. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the six months ended June&nbsp;26, 2010, net cash used in investing activities was $1.5&nbsp;million. Purchases of property, plant and equipment were $4.2&nbsp;million, which was partially
offset by the release of restricted cash of $2.4&nbsp;million. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
fiscal 2010, net cash used in investing activities was $9.3&nbsp;million. Purchases of property, plant and equipment were $15.7&nbsp;million, which was offset in part by proceeds from the sale
of property, plant and equipment of $4.4&nbsp;million and the release of restricted cash of $2.0&nbsp;million following the partial repayment of an entrustment loan by the Dalian, China facility. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
fiscal 2009, net cash used in investing activities was $7.0&nbsp;million. Net cash used in investing activities in fiscal 2009 was primarily for the acquisitions of property, plant and equipment
in the amount of $6.2&nbsp;million; cash used was affected by significantly lower than normal annual investment in capital expenditures due to the severity of the worldwide recession and our need to
conserve cash. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
fiscal 2008, net cash used in investing activities was $3.8&nbsp;million. Purchases of property, plant and equipment of $11.3&nbsp;million were mostly offset by proceeds from the sale of
property, plant and equipment of $4.9&nbsp;million and the release of restricted cash of $3.5&nbsp;million. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Financing Activities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Cash provided by (used in) financing activities relates primarily to proceeds and
payments from capital and debt raising transactions and payments under agreements and facilities, including capital lease obligations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the six months ended July&nbsp;2, 2011, net cash used in financing activities was $6.7&nbsp;million. Financing activities include $1.7&nbsp;million of expenses, primarily legal and
accounting, related to this offering. The remaining financing activities occurred in our overseas subsidiaries and reflect the roll-over of various term loans and the payoff of the
entrustment loan by the Dalian, China facility in the amount of $5.5&nbsp;million. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the six months ended June&nbsp;26, 2010, net cash used in financing activities was $0.5&nbsp;million and consisted of payments on capital lease obligations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
fiscal 2010, net cash provided by financing activities was $60.6&nbsp;million. We completed a major refinancing in fiscal 2010, entering into new senior secured and mezzanine credit agreements as
well as issuing convertible preferred certificates. We received gross proceeds from these transactions of $376.4&nbsp;million, which was allocated among the three forms of financing based on their
relative fair values. The funds received from these transactions along with $32.7&nbsp;million of cash were used to repay the principal and accrued interest of the then-outstanding
first- and second-lien credit facilities. We incurred $19.2&nbsp;million of debt issuance costs related to the new senior secured and mezzanine credit agreements </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
fiscal 2009, net cash used in financing activities was $13.1&nbsp;million. We received proceeds of $30.7&nbsp;million which reflected the renewal of short-term credit facilities at
our overseas subsidiaries. Debt repayments similarly reflected the repayments of these short-term credit facilities. We made a $6.3&nbsp;million repayment of principal on our
first-lien credit facility in the U.S. as well as a reduction of $2.2&nbsp;million in the entrustment loan by our Dalian, China entity. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
fiscal 2008, net cash provided by financing activities was $5.8&nbsp;million. Proceeds of $77.1&nbsp;million included a $31.9&nbsp;million draw-down in the U.S. under the
revolving credit facility of the first-lien credit agreement. Debt payments included $12.8&nbsp;million of principal repayments under the first-lien credit agreement and a
$3.0&nbsp;million reduction of the entrustment loan by the Dalian, China facility. The remaining debt proceeds </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>74 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=79,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=368156,FOLIO='74',FILE='DISK108:[11ZAS1.11ZAS12701]DI12701A.;46',USER='LSMITH',CD='30-OCT-2011;17:22' -->
<A NAME="page_di12701_1_75"> </A>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>and
payments were related to the roll-over of short-term credit facilities at our overseas subsidiaries. Debt issuance costs of $3.3&nbsp;million were incurred to amend the
first- and second-lien credit agreements in August 2008. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="di12701_contractual_obligations_and_commitments"> </A>
<A NAME="toc_di12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  CONTRACTUAL OBLIGATIONS AND COMMITMENTS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table sets forth, as of January&nbsp;1, 2011, the aggregate amounts of our significant contractual obligations and commitments with
definitive payment terms due in each of the periods presented: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"120%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="120%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Payments due by period </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Year 1</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Years 2-3</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Years 4-5</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>More than<BR>
5 years</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=16 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>&nbsp;&nbsp;<BR> </B></FONT><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Secured term loans under senior secured credit agreement<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>311,209</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21,292</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>37,275</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>252,642</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unsecured term loans under mezzanine credit agreement<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>359,461</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14,716</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28,411</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>37,409</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>278,925</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Short-term debt<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21,710</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21,710</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest rate swaps<SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,259</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>365</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>723</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>171</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Capital leases<SUP>(5)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,460</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,337</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,674</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,674</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12,775</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating leases<SUP>(5)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,943</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,404</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,877</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>857</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,805</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Purchase obligations<SUP>(6)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21,071</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,905</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,061</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,687</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,418</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Convertible preferred certificates<SUP>(7)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,933,597</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,933,597</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,673,710</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>65,729</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>78,021</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>297,440</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,232,520</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

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  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents future principal and interest payments on the senior secured credit agreement entered into on September&nbsp;30, 2010. Includes projected interest of
$101.2&nbsp;million based on the interest rate as of January&nbsp;1, 2011. Refer to Note&nbsp;4 "Debt" in the consolidated financial statements.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents future principal and interest payments on the mezzanine credit agreement entered into on September&nbsp;30, 2010. Includes projected interest of
$184.5&nbsp;million
based on the interest rate as of January&nbsp;1, 2011. Of this amount, $94.0&nbsp;million represents interest "payable in kind" and $90.5&nbsp;million represents interest payable in cash. Refer
to Note&nbsp;4 "Debt" in the consolidated financial statements.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(3)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents future principal and interest payments on short-term debt. Includes projected interest of $0.7&nbsp;million based on interest rates as of January&nbsp;1,
2011. Refer to Note&nbsp;4 "Debt" in the consolidated financial statements.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(4)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents obligations related to interest rate swaps entered into in February 2007, May 2007 and December 2010. Each interest rate swap is based on variable rates.
The projected
obligation is based on the interest rate as of January&nbsp;1, 2011. Refer to Note&nbsp;6 "Interest Rate Swaps" in the consolidated financial statements.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(5)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents obligations under capital and operating leases. Includes imputed interest of $4.2&nbsp;million. Refer to Note&nbsp;8 "Commitments and Contingencies" in
the consolidated
financial statements.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(6)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Includes amounts associated with agreements to purchase goods or services that are enforceable and legally binding on us and specify all significant terms,
including: fixed or minimum
quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. These amounts are primarily comprised of contracts for electricity, gas and
other utilities.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(7)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents future principal and interest payments associated with our convertible preferred certificates, which constitute legal debt instruments in Luxembourg, the
jurisdiction of
issuance. The convertible preferred certificates are denominated in Euro and earn interest based on variable rates. The obligation includes projected interest of $1,747.0&nbsp;million and is based
on interest rates as of January&nbsp;1, 2011. Refer to Note&nbsp;5 "Convertible Preferred Certificates" in the consolidated financial statements. Immediately prior to this offering, all of the
convertible preferred certificates will be effectively converted into ordinary shares of Isola Group Ltd., and the principal and interest on the convertible preferred certificates will no longer be
payable in cash. See the "Pro forma payments due by period" table that follows, which illustrates the pro forma effect of this conversion.  </I></FONT></DD></DL>
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>75 </B></FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=80,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=452211,FOLIO='75',FILE='DISK108:[11ZAS1.11ZAS12701]DI12701A.;46',USER='LSMITH',CD='30-OCT-2011;17:22' -->
<A NAME="page_di12701_1_76"> </A>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<P style="font-family:times;text-align:justify"></FONT></P>
 </DIV>
 <UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The above table excludes the following items: </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Amounts
potentially payable to taxing authorities for uncertain tax positions taken on returns. The amount and timing of payments with respect to these
items are subject to a number of uncertainties such that we are unable to make sufficiently reliable estimates of the timing and amount of future payments. As of January&nbsp;1, 2011, we had accrued
$53.5&nbsp;million related to uncertain tax positions. While each of our uncertain tax positions could be settled in cash at a future date, a significant portion of the uncertain tax positions
relates to jurisdictions in which we have incurred net operating losses. Refer to Note&nbsp;12 "Income Taxes" in the consolidated financial statements.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Amounts
payable to TPG Capital pursuant to an agreement whereby TPG Capital provides financial, advisory and consulting services to us. There are no minimum
levels of service required to be provided pursuant to the agreement and the agreement is in effect until cancelled by either party or the consummation of this offering. The annual amount due under the
agreement is $2.1&nbsp;million. Refer to Note&nbsp;13 "Related Party Transactions" in the consolidated financial statements.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Estimated
minimum funding requirements and expected voluntary contributions for retiree benefit plans as set forth by ERISA in relation to our pension and
post-retirement benefit obligations. Refer to Note&nbsp;7 "Pension and Other Retirement Benefits" in the consolidated financial statements. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table sets forth, as of July&nbsp;2, 2011, the aggregate amounts of our significant contractual obligations and commitments with definitive payment terms due in each of the periods
presented on a pro forma basis to give effect to (i)&nbsp;the reorganization and effective conversion of the convertible preferred certificates to ordinary shares and (ii)&nbsp;the application of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million of the net proceeds from this offering and borrowings of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million of indebtedness under a new senior secured credit
facility to prepay the secured
term loans made under our senior secured credit agreement and the unsecured term loans made under our mezzanine credit agreement as described in "Use of Proceeds": </FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="120%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Pro forma payments due by period </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Year 1</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Years 2-3</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Years 4-5</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>More than<BR>
5 years</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=16 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>&nbsp;&nbsp;<BR> </B></FONT><FONT SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Secured term loans under new senior secured credit facility<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Short-term debt<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest rate swaps<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Capital leases<SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating leases<SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Purchase obligations<SUP>(5)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
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<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents future principal and interest payments on our new senior secured credit facility. Includes projected interest of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents future principal and interest payments on short-term debt. Includes projected interest of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million based on interest rates as of
July&nbsp;2, 2011. Refer to Note&nbsp;4 "Debt" in the consolidated financial statements.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(3)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents obligations related to interest rate swaps entered into in February 2007, May 2007 and December 2010. Each interest rate swap is based on variable rates.
The projected
obligation is based on the interest rate as of July&nbsp;2, 2011. Refer to Note&nbsp;6 "Interest Rate Swaps" in the consolidated financial statements.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(4)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents obligations under capital and operating leases. Includes imputed interest of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million. Refer
to Note&nbsp;8 "Commitments and Contingencies" in the
consolidated financial statements.  </I></FONT></DD></DL>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><B>76 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(5)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Purchase obligations include amounts associated with agreements to purchase goods or services that are enforceable and legally binding on us and specify all significant terms,
including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. These amounts are primarily comprised of contracts
for electricity, gas and other utilities.  </I></FONT></DD></DL>
 </DIV>
 <UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The above table excludes the following items: </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Amounts
potentially payable to taxing authorities for uncertain tax positions taken on returns. The amount and timing of payments with respect to these
items are subject to a number of uncertainties such that we are unable to make sufficiently reliable estimates of the timing and amount of future payments. As of July&nbsp;2, 2011, we had accrued
$56.4&nbsp;million related to uncertain tax positions. While each of our uncertain tax positions could be settled in cash at a future date, a significant portion of the uncertain tax positions
relates to jurisdictions in which we have incurred net operating losses. Refer to Note&nbsp;12 "Income Taxes" in the consolidated financial statements.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Amounts
payable to TPG Capital represent a transaction fee of $8.0&nbsp;million and accrued management fees of $1.0&nbsp;million associated with
financial, advisory and consulting services provided to the Company. The amounts payable do not have scheduled repayment terms.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Estimated
minimum funding requirements and expected voluntary contributions for retiree benefit plans as set forth by ERISA in relation to the our pension
and post-retirement benefit obligations. Refer to Note&nbsp;7 "Pension and Other Retirement Benefits" in the consolidated financial statements. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="di12701_pension_plans"> </A>
<A NAME="toc_di12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  PENSION PLANS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Pension Plans.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We sponsor several pension plans and provide various medical and life insurance
benefits to certain retirees at a minimal cost to Isola. Although we have terminated or curtailed select benefits or plans, including our U.S. pension plans, several others are expected to continue,
including pension plans required by collective bargaining agreements outside of the United States. Some of these plans are underfunded. Based on various assumptions, in the aggregate our pension plans
were underfunded by $43.0&nbsp;million at January&nbsp;1, 2011. We expect to make annual pension contributions of approximately $4.5&nbsp;million for the foreseeable future. For additional
information on our pension plans and postretirement benefits, see Note&nbsp;7 to the Consolidated Financial Statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="di12701_quantitative_and_quali__di102456"> </A>
<A NAME="toc_di12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="di12701_interest_rate_risk,_derivative_instruments"> </A>
<A NAME="toc_di12701_5"> </A></FONT> <FONT SIZE=2><B>  Interest Rate Risk, Derivative Instruments    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We are exposed to certain risks relating to our ongoing business operations. The primary risk managed by using derivative instruments is interest
rate risk. We do not use derivative financial instruments for trading or speculation purposes. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
are subject to interest rate risk in connection with borrowings under our existing senior secured credit agreement. As of July&nbsp;2, 2011, we had $210.0&nbsp;million in senior secured term
loans outstanding under our existing senior secured credit agreement, the unhedged portion of which is subject to variable interest rates. We can elect to lock in interest rates on the existing senior
secured debt for one, two, three or six months. The interest rates vary based upon the loan type, which is either a base rate loan or an adjusted Eurodollar rate. As of July&nbsp;2, 2011, we had
elected to accrue interest for three months using the adjusted Eurodollar rate, which resulted in an interest rate of 10%. Under the existing senior agreement, the adjusted Eurodollar rate would need
to increase above 2% to have an impact on future interest expense. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On
December&nbsp;30, 2010, we entered into an interest rate swap agreement with a notional amount of $25&nbsp;million under which we pay a fixed 2.8% and receive the greater of three-month LIBOR
or 2%. The swap is set to expire December&nbsp;31, 2013. Settlement dates occur quarterly. We did not designate this swap </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>77 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>agreement
as a hedge and, therefore, the change in its fair value will be recorded in our consolidated statement of operations in interest expense, along with the quarterly settlement amounts. This
derivative instrument addresses a requirement of our senior secured credit agreement to have 50% of all indebtedness for borrowed money subject to interest rate agreements and/or fixed rates. The fair
value of this interest rate swap at the end of the six months ended July&nbsp;2, 2011 was immaterial. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="di12701_foreign_currency_risk"> </A>
<A NAME="toc_di12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  Foreign Currency Risk    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>While the Company generates revenues in several currencies, a majority of its operating expenses are in U.S. dollars. Therefore depreciation in these
other currencies against the U.S. dollar would negatively impact revenue upon translation to the U.S. dollars; however, the impact on operating expenses would be less. For example, for fiscal 2010, a
10% decrease in the euro against the U.S. dollar would have resulted in a $13.9&nbsp;million decrease in revenue and an increase of $0.2&nbsp;million in the net loss in fiscal 2010. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="di12701_inflation_risk"> </A>
<A NAME="toc_di12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  Inflation Risk    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Inflationary factors, such as increases in our cost of goods sold and operating expenses, may adversely affect our results of operations. Although we
do not believe that inflation has had a material impact on our financial position or results of operations to date, an increase in the rate of inflation in the future, particularly in Europe and
China, may have an adverse affect on our levels of gross profit and operating expenses as a percentage of revenue if the sales prices for our products do not proportionately increase with these
increased expenses. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="di12701_commodity_risk"> </A>
<A NAME="toc_di12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  Commodity Risk    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We are subject to commodity risks related to the prices of the raw materials used in the manufacture of our advanced PCB laminate materials,
including copper, glass and resin. These raw materials, especially copper, are subject to price fluctuations. We have been able to pass through to our customers a substantial portion of the raw
material cost increases in the past, although our ability to do so to the same degree in the future is not guaranteed. Historically, we have been able to pass through raw material price increases more
readily in connection with our high-performance products. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="di12701_off-balance_sheet_arrangements"> </A>
<A NAME="toc_di12701_9"> </A>
<BR></FONT><FONT SIZE=2><B>  OFF-BALANCE SHEET ARRANGEMENTS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that
would be expected to have a material current or future effect upon our results of operations and financial condition. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="di12701_seasonality"> </A>
<A NAME="toc_di12701_10"> </A>
<BR></FONT><FONT SIZE=2><B>  SEASONALITY    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Historically, our business has not been subject to recurring seasonal patterns. Revenue and earnings from quarter-to-quarter
within a fiscal year are driven primarily by general economic factors and the demand for electronic products. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="di12701_recent_accounting_pronouncements"> </A>
<A NAME="toc_di12701_11"> </A>
<BR></FONT><FONT SIZE=2><B>  RECENT ACCOUNTING PRONOUNCEMENTS    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Changes to accounting principles generally accepted in the United States of America ("U.S.&nbsp;GAAP") are established by the FASB in the form of
accounting standards updates ("ASUs") to the FASB's Accounting Standards Codification. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>78 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management's Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


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<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and were either determined to be not applicable or are expected to have minimal impact on our
consolidated financial position and results of operations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
January 2010, FASB issued ASU No.&nbsp;2010-06, "Fair Value Measurements and Disclosures (Topic&nbsp;820)&#151;Improving Disclosures about Fair Value Measurements"
("ASU&nbsp;2010-06"). ASU&nbsp;2010-06 requires new disclosures regarding significant transfers in and out of Levels&nbsp;1 and 2, as well as information about activity
in Level&nbsp;3 fair value measurements, including presenting information about purchases, sales, issuances and settlements on a gross versus a net basis in the Level&nbsp;3 activity roll forward.
In addition, ASU&nbsp;2010-06 clarifies existing disclosures regarding input and valuation techniques, as well as the level of disaggregation for each class of assets and liabilities.
ASU No.&nbsp;2009-06 is effective for interim and annual periods beginning after December&nbsp;15, 2009, except for the disclosures pertaining to purchases, sales, issuances and
settlements in the roll forward of Level&nbsp;3 activity; those disclosures are effective for interim and annual periods beginning after December&nbsp;15, 2010. The adoption of
ASU&nbsp;2010-06 in fiscal 2010 did not have a material impact on our consolidated financial position, results of operations or cash flows. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
June 2011, the FASB issued an amendment to the existing guidance on the presentation of comprehensive income. Under the amended guidance, entities have the option to present the components of net
income and other comprehensive income in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Entities no longer have the option of presenting
the components of other comprehensive income within the statement of changes in stockholders' equity. This amendment is effective on a retrospective basis for interim and annual periods beginning
after December&nbsp;15, 2011, which for the Company begins with the first quarter of 2012. The adoption of this amendment will result in a change to the Company's current presentation of
comprehensive income, but will not have any impact on the Company's consolidated financial position or results of operations. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>79 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dk12701_business"> </A>
<A NAME="toc_dk12701_1"> </A>
<BR></FONT><FONT SIZE=4>  <A NAME="Business."></A>Business    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dk12701_our_company"> </A>
<A NAME="toc_dk12701_2"> </A></FONT> <FONT SIZE=2><B>  OUR COMPANY    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola is a leading global material sciences company that designs, develops and manufactures copper-clad laminate ("CCL")
and prepreg (collectively, "laminate materials") used to fabricate advanced multilayer printed circuit boards ("PCBs"). PCBs provide the physical platform for the semiconductors, passive components
and connection circuitry that power and control virtually all modern electronics. We focus on the market for high-performance laminate materials, developing proprietary resins that are
critical to the performance of PCBs used in advanced electronic applications. We continually invest in research and development and believe that our industry-leading resin formulations, many of which
are patented, provide us with a competitive advantage. With 11 manufacturing facilities and three research centers worldwide, as well as a global sales force, we are the largest supplier of laminate
materials to PCB fabricators in the United States and Europe, and we are one of the larger suppliers in our addressable Asian market, based on revenue for fiscal year 2010. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
high-performance PCB laminate materials are used in a variety of advanced electronics, including network and communications equipment and high-end consumer electronics, as
well as advanced automotive, aerospace, military and medical applications. Demand in these markets is driven by the rapid growth of bandwidth-intensive high-speed data transmission, the expansion of
the internet, the emergence of cloud computing and the evolution of increasingly complex communications technology. This has led to an urgent need for the development of the underlying infrastructure
to support this growth, including faster and more efficient semiconductor technology. In
addition, increasingly pervasive environmental regulations are driving a need for lead-free compatible, high-performance laminate materials. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
sell our products globally to leading PCB fabricators, including DDi, Ruwel, Sanmina, TTM Technologies, Viasystems and WUS Printed Circuit. These fabricators produce PCBs incorporating our laminate
materials for electronic equipment designed or produced by a broad group of major original equipment manufacturers, or OEMs, including Alcatel-Lucent, Brocade, Cisco, Google, Hewlett-Packard, Huawei,
IBM and Sun Microsystems (now Oracle). We work closely with these leading PCB fabricators and major OEMs to ensure that our high-performance laminate materials, which incorporate our
proprietary resins, meet the thermal, electrical and physical performance criteria of each new generation of electronic equipment. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
were acquired in 2004 by a group of investors led by TPG Capital, formerly known as Texas Pacific Group, a global private equity firm, and Redfern Partners, a strategic partner and an investor in
the laminate materials industry. Under the direction of TPG Capital and our management, we have undertaken a number of operational changes designed to increase manufacturing efficiencies and improve
business processes. We believe that these measures, together with our focus on higher margin high-performance products, provide us with the operating leverage to take advantage of
improving economic conditions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
history dates back nearly 100&nbsp;years to the founding of Isola Werke AG in Germany in 1912. Isola Werke AG manufactured insulators utilizing the then-revolutionary Bakelite
plastic technology, which provided superior insulating and heat resistance properties. We began production of copper-clad epoxy laminates, the direct predecessors of today's
high-performance PCB laminate products, in the 1960s. In 2006, we acquired the assets of Polyclad Laminates,&nbsp;Inc., which extended our product portfolio and expanded our business in
the growing Asian markets. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the six months ended July&nbsp;2, 2011, our revenue was $316.6&nbsp;million, Adjusted EBITDA was $49.2&nbsp;million and our net loss was $19.1&nbsp;million, as compared to revenue of
$307.0&nbsp;million, Adjusted EBITDA of $49.2&nbsp;million and a net loss of $30.5&nbsp;million for the six months ended June&nbsp;26, 2010. For fiscal 2010, our revenue was
$612.0&nbsp;million, our Adjusted EBITDA was $89.7&nbsp;million and our net income was </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>80 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Business </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>$5.1&nbsp;million,
as compared to revenue of $416.1&nbsp;million, Adjusted EBITDA of $39.0&nbsp;million and a net loss of $100.7&nbsp;million in fiscal 2009. For a discussion of our primary
non-GAAP metric, Adjusted EBITDA, including reconciliation to net income, see our discussion of non-GAAP financial measures in "Selected Historical Consolidated Financial and
Other Data", included elsewhere in this prospectus. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dk12701_industry_overview_and_market_opportunity"> </A>
<A NAME="toc_dk12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  INDUSTRY OVERVIEW AND MARKET OPPORTUNITY    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>High-performance laminate materials are used in a variety of advanced electronics, including network and communications equipment,
high-end consumer electronics, as well as advanced automotive, aerospace, military and medical applications. The increasingly complex performance and environmental requirements of advanced
electronics are driving greater demand for higher performance PCBs, which require laminate materials with resins specifically formulated to satisfy demanding performance criteria. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Based
on data from Prismark, an independent research firm, we estimate that our addressable market for high-performance PCB laminate materials was $4.6&nbsp;billion in 2010. According to
BPA, another independent research firm, the market for multilayer PCB laminate materials (predominately comprised of the high-performance market segment) is expected to make up
approximately 55% of the worldwide PCB laminate materials market in 2011 (measured in square meters) and remains the fastest growing segment with an expected CAGR of 12.4% from 2010 to 2014 for PCB
production value. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dk12701_pcb_laminate_materials_and_fabrication"> </A>
<A NAME="toc_dk12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  PCB Laminate Materials and Fabrication    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prepreg and CCL are the primary laminate materials used in the construction of multilayer PCBs, and we estimate that these materials represent
greater than 40% of the material cost required to fabricate a PCB. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prepreg
is an industry term derived from the contraction of "</FONT><FONT SIZE=2><B><U>pre</U></B></FONT><FONT SIZE=2>viously
im</FONT><FONT SIZE=2><B><U>preg</U></B></FONT><FONT SIZE=2>nated". Prepreg is a dielectric material that provides electrical insulation and other properties. Prepreg is
manufactured by the impregnation of fiberglass fabric with specially formulated resins. The resin confers specific electrical, thermal and physical properties to the prepreg and is critical to the
proper functioning of a PCB. Prepreg may be incorporated into a CCL or sold as a separate product. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>CCL
consists of an inner layer of prepreg laminated on both sides with a thin layer of copper foil. The lamination is achieved by pressing together one or more plies of copper and prepreg under
intense heat, pressure and vacuum conditions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>PCB
fabricators use prepreg and CCL to construct multilayered PCBs in a complex process comprised of multiple operations that are often repeated. In general, the copper surfaces of the laminate are
etched to create an electronic circuit. These etched laminates are assembled into a multilayer configuration by inserting one or more plies of insulating prepreg between each etched laminate. Holes
are then drilled and plated in the PCB to establish electrical connections among the layers. The resulting multilayer PCB is an intricate interconnection device on which semiconductors and other
components are mounted, which is then incorporated into an end-market product. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Although
end products and PCB designs often evolve rapidly as a result of product line improvements or extensions, the lifespan of the underlying PCB laminate materials is relatively long. The same
laminate materials can be used in successive generations of PCBs within a product line or be adapted to new products having similar performance specifications. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dk12701_pcb_laminate_materials_segments_and_properties"> </A>
<A NAME="toc_dk12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  PCB Laminate Materials Segments and Properties    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>PCB laminate materials can be categorized as either high-performance, standard or paper-based. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>81 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><I>High-performance</I></FONT><FONT SIZE=2> PCB laminate materials are defined by their superior performance capabilities achieved primarily through the use of
advanced resin formulations and materials. These products compete primarily on their technological capabilities and secondarily on the price of PCB laminate materials with similar performance
characteristics. High-performance products are used in circuit boards that combine eight or more layers, with some applications requiring circuit boards with more than 20 layers. In the
high-performance market, the following properties are critical: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><U>Electrical</U>:&nbsp;&nbsp;This
property refers to the speed with which an electric current moves through the circuit and the signal loss,
or dissipation. Signal speed of a material is expressed by its dielectric constant; signal loss is expressed by its dissipation factor.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><U>Thermal</U>:&nbsp;&nbsp;This
property refers to the stability of the material at various temperatures. This is important for dimensional
stability over the expected range of temperatures that a PCB will be exposed to during its final assembly (i.e.,&nbsp;soldering process), as well as the operating temperature of the particular
electronic device. Thermal stability of a material is measured by its glass transition temperature (expressed as "Tg").
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><U>Physical</U>:&nbsp;&nbsp;This
property refers to a number of factors, including peel strength (i.e.,&nbsp;susceptibility to
de-lamination), flammability, moisture absorption, ease of processing, drilling and reliability. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I>Standard</I></FONT><FONT SIZE=2> PCB laminate materials are based on proven, though relatively less sophisticated, resin chemistry. These products compete primarily on price
and are produced in high volumes and at a low cost. Standard PCB laminate materials involve minimal proprietary technology and are used in applications requiring lower layer counts and less
complexity. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I>Paper-based</I></FONT><FONT SIZE=2> PCB laminate materials are used in very simple consumer electronics, are very low-cost and typically rely upon somewhat
rudimentary chemical formulations. Isola does not participate in this market segment. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dk12701_end-market_overview"> </A>
<A NAME="toc_dk12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  End-market Overview    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The market for high-performance PCB laminate materials is influenced by a number of factors, including developments in the markets for
servers and storage, network communications and advanced automotive electronics as discussed below. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Servers and storage.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The need for additional server and data storage capacity has significantly increased due to the proliferation of digital data and the
widespread adoption of cloud computing applications. Cloud computing entails the use of virtual servers which are accessed through the internet and deliver hosted services that have traditionally been
deployed in-house, including software as a service, platform as a service and infrastructure as a service. According to IDC, a leading independent research organization, as reported in its
Digital Universe Study of June&nbsp;2011 (sponsored by EMC), the amount of digital data created, replicated and stored by 2015 will reach 7.9&nbsp;trillion gigabytes, which is 6.4&nbsp;times the
amount of data in 2010, representing a CAGR of 45%. Storing and utilizing vast amounts of data will require significant increases in server and storage capacity and capability, as well
as more robust cloud computing technology. As servers and storage equipment become more sophisticated and technically demanding, manufacturers will need more effective PCB laminate materials comprised
of high-performance resin formulations to achieve the required performance in PCBs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Network communications.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Enterprise routers and wireless infrastructure form the network foundation required for high-speed data transmission and
internet access over wired and wireless servers, including the 4G wireless services that are now being rolled out globally. Currently deployed network infrastructure will require significant
investment in more sophisticated equipment with greater speed, processing power and performance characteristics in order to provide the increased capacity needed to address increased volumes </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>82 </B></FONT></P>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>of
traffic and data driven by social networking, increased mobile internet access and increased transmission of high-bandwidth content such as high-definition videos. The Cisco
Visual Networking Index estimates that global IP traffic will grow at a CAGR of approximately 32% from 2010 to 2015, largely driven by the increase in mobile internet demand. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Advanced automotive electronics.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;While traditional automotive electronics utilize standard PCB laminate materials, the emergence of more sophisticated features,
such as vehicle information systems, engine and power train electronics and vehicle control systems, are driving demand for more advanced automotive electronics. These electronics require
higher-performing PCBs that incorporate high-performance laminate materials. Prismark estimates that automotive electronic applications represented 5.5% of the global PCB market in 2011,
and that the high-performance PCB market for automotive electronics is expected to grow at a 6.9% CAGR from 2010 to 2015. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Other markets.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Other markets include military/aerospace equipment, advanced mobile devices and satellite television receivers. High-performance PCBs
are used in military/aerospace applications, including radar, guidance control, communications and navigation, warfare and electro-optical equipment. Advanced mobile devices such as smart phones and
tablets incorporate PCBs made with high-performance halogen-free laminate materials. Satellite receivers require advanced high frequency PCB laminate materials that efficiently
transform signals to high quality, low frequency signals suitable for transmission over indoor cables. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dk12701_trends_and_drivers_in___dk102224"> </A>
<A NAME="toc_dk12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  Trends and Drivers in the Global PCB Laminate Industry    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Current trends and drivers in the global industry for PCB laminate materials include the following: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Rapidly expanding data infrastructure and increasing demand for high-performance PCB laminate materials.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Higher volumes of high-performance
PCB laminate materials will be required as OEMs sell more enterprise-level servers, storage solutions, routers, switches and other high-performance electronics. Growth in these products
continues due to fast-growing applications such as cloud computing, social networking and online video streaming combined with ubiquitous internet access. This trend is expected to
continue as developed nations continually improve upon existing technologies and developing nations further adopt and rely on high-performance electronics. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Increasing performance requirements of advanced electronics require high-performance PCB laminate materials.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;To meet continually increasing performance
requirements of advanced electronics, semiconductor and component manufacturers regularly introduce successive generations of higher performance microprocessors, memory and logic devices and
electronic components. High-performance multi-layer PCBs and laminate materials are required to facilitate fast interconnect speeds and deliver superior electrical properties, enabling
semiconductors and components to optimally function as a system. As a result, the PCB laminate materials industry must continually develop better performing, more cost effective laminate and resin
formulations to meet the growing requirements of new semiconductor and component technologies. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Growing demand for environmentally friendly lead-free compatible PCB laminate materials.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Increased regulation applicable to electronic equipment
requires manufacturers to consider use of lead-free materials in products and manufacturing processes. While these regulatory measures do not have a direct impact on PCB laminate
materials, which do not contain lead or other prohibited chemicals, they do change the thermal requirements of the laminates used in the lead-free soldering of PCBs. Lead-free
applications have been gaining momentum globally with many companies introducing products to meet the new regulations, and some converting exclusively to lead-free compatible assemblies in
order to avoid having separate bills of material and dedicated product lines. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>83 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Greater emphasis on closer collaboration with OEMs and materials suppliers.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Time-to-market for new products has become increasingly
important as the rate of technology advancement accelerates and competition increases. OEMs are more frequently working directly with laminate materials suppliers early in the product lifecycle to
qualify specific laminates to be used in the PCBs incorporated into the end product. This collaboration allows OEMs to accelerate the product development process and bring products to market faster.
In addition, just-in-time inventory stocking by PCB fabricators results in a need for quick-turn availability of laminate materials. Laminate materials producers
benefit from these trends, partnering closely with customers to accommodate their demands, while obtaining higher margins on quick-turn orders. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dk12701_our_competitive_strengths"> </A>
<A NAME="toc_dk12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  OUR COMPETITIVE STRENGTHS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We believe that we possess the following competitive strengths, which will enable us to continue to grow our business globally. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Product technology leadership.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our significant technology expertise enables us to produce market-leading high-performance PCB laminate materials. We
possess an extensive portfolio of patent and other intellectual property rights covering our proprietary resin formulations, and have pioneered the development of several product categories with "best
in class" technology. Our proprietary resin formulations are capable of supporting complex circuit boards used in the most demanding electronic equipment. We believe that our technology provides a
competitive advantage, and differentiates our products from commonly available, lower performance materials. We continue to devote considerable efforts to research and develop new resin formulations
and other PCB laminate materials to meet evolving market needs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Recognized market leadership.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We maintain a leading market share, based on revenues, in each of our larger addressable markets for high-performance
laminate materials. We have an established reputation as an industry leader and product innovator with strong brand recognition. We
believe that our products are known for their performance, quality and long product life cycles. We believe that our reputation and brand awareness provide meaningful advantages when developing and
marketing new and existing products and will play a significant role in our future growth. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Blue-chip customer base served by global strategic manufacturing locations.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have developed strong, long-term relationships with leading
global PCB fabricators and the major OEMs they serve. We believe that the collaborative relationships provide us with a competitive advantage and assist us in bringing new products to market in a
timely manner. We own state-of-the-art equipment in manufacturing facilities that are strategically located around the world in close proximity to these key
industry participants. Our global network of plants facilitates quick-turn manufacturing and delivery of product, which reduces our customers' inventory levels and shipping costs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Streamlined manufacturing with significant operating leverage.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We seek to achieve continual improvement in our manufacturing and business processes. We use "six
sigma" processes and "lean" best practices, and recently completed the implementation of a sophisticated SAP-based ERP and analytical system across our global operations. In 2009, we
closed three of our manufacturing facilities to improve factory utilization and lowered our fixed costs. Together with other measures, these closures are estimated to result in permanent fixed cost
savings of approximately $30&nbsp;million annually. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Experienced management team.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have a highly experienced management team comprised of well-respected industry veterans who possess an average of over
20&nbsp;years of experience in the electronics industry. Our management team has a proven track record of implementing sound business practices, which include focusing our product development on
higher margin products, improving the efficiency of our manufacturing facilities and successfully integrating acquired businesses. </FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dk12701_our_growth_strategies"> </A>
<A NAME="toc_dk12701_9"> </A>
<BR></FONT><FONT SIZE=2><B>  OUR GROWTH STRATEGIES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We intend to extend our market leadership in the higher margin, high-performance laminate materials market through the following growth
strategies: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Leverage collaborative relationships and technology leadership to develop innovative solutions.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have implemented focused product development teams to further
expand our relationships with leading PCB fabricators and the OEMs they serve. Our product development teams include members of our research and development, technical support and OEM marketing
groups, all working under the direction of our Chief Technology Officer. Our teams actively monitor product developments for OEMs and engage in regular dialog with them and their PCB fabricators, in
order to anticipate and plan for required technical product specifications. Through this collaborative effort we seek to develop innovative laminate materials solutions that meet future OEM product
requirements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Further penetrate the Asian market.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Many OEMs and PCB fabricators are increasingly migrating the manufacturing of complex electronic equipment to Asia. In
addition, several Asian markets are simultaneously undergoing infrastructure build-outs as their economies grow and develop. To supply this market, six of our 11 manufacturing facilities
are located in Asia, and we maintain a sales force dedicated to serving this region. We will seek to capitalize on the opportunities presented by the very large and fast growing Asian markets for
high-performance PCB laminate materials based on the high quality of our products and our technology. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Extend high-performance products into new applications.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We believe that other markets could benefit from our PCB laminate materials and proprietary
resin formulations, including the markets for next generation automotive equipment and consumer devices such as smart phones and tablets. In addition, we believe that environmental regulations will
become increasingly global and expand the addressable market for our high-performance, lead-free compatible and halogen-free PCB laminate materials. We intend to
devote marketing and technical resources to address these growing potential markets. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Opportunistically pursue strategic acquisitions and alliances.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have grown through select acquisitions since we were acquired in 2004. While we believe that our
future success will depend primarily on
product innovation from collaborative relationships with our major customers and the OEMs they serve, we may pursue strategic acquisitions that provide products or technology complementary to our
current operations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dk12701_product_markets_and_product_applications"> </A>
<A NAME="toc_dk12701_10"> </A>
<BR></FONT><FONT SIZE=2><B>  PRODUCT MARKETS AND PRODUCT APPLICATIONS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Product Markets.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Isola focuses on the high-performance segments of the market for PCB laminate materials, which are expected to provide the greatest
growth opportunities. Currently the largest of the markets we serve include: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>High-Tg.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;High-Tg products exhibit superior thermal, electrical and physical
performance characteristics, including the ability to withstand fabrication processes involving temperatures of 170&deg;C or more. They are used in the communications, industrial, medical,
automotive, military, aerospace and computing industries.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>High-Tg, lead-free.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;High-Tg, lead-free compatible
products incorporate resins specially formulated to withstand thermal stresses arising in higher temperature lead-free PCB fabrication. Demand for lead-free products is driven
by growing environmental concerns, including lead-free initiatives in major geographies. We maintain an extensive portfolio of proprietary technology and we believe we have significant
market share in this product segment.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>High-speed digital.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;High-speed digital, or high-frequency, products
provide superior electrical properties, specifically low dissipation factors and low dielectric constants. Demand for these products </FONT></DD></DL>
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<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>is
driven by a need for increased circuit speeds for servers, storage application networks, network infrastructure and military electronics. We have a leading market position and an extensive
portfolio of proprietary technology addressing this market. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
also participate in the following high-performance markets: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Halogen-free.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;Halogen-free products satisfy consumer demand for "green" products
because they do not contain halogen-derived flame retardants. This market is currently growing primarily in the consumer electronics sector with specific applications ranging from smart phones to
tablets and LCD displays. Although the current market for these products is extremely price competitive, newer and more demanding applications are emerging. We are currently developing more advanced
halogen-free materials utilizing resin formulations with improved thermal and electrical properties to address the emerging needs of this market, and we expect that these next generation
halogen-free products are likely to command higher prices and provide improved margins.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Military/specialty.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;These laminate materials find specialized uses within the military and aerospace
industries. Typically they have high glass-transition temperatures, very high decomposition temperatures and low expansion rates&#151;all attributes required for demanding military and
aerospace applications. We work through licensed government contractors to address existing and emerging applications. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
also provide the following standard products to our customers: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Low- and mid-Tg.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;These laminate materials are used in less demanding
applications within the consumer, automotive and industrial industries. Our revenues in the low- and mid-Tg markets are expected to decline as we continue to focus on the more
attractive, high-performance markets. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>86 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Business  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Product Applications.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The below chart shows the characteristics and some major applications of various high-performance products and standard products
that we offer. </FONT></P>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Market</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Segment</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Major Isola products</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Characteristics</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Major applications</B></FONT><BR></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=1>High-performance</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>High-Tg</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>-FR406</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>High thermal limits (170<SUP>o</SUP>C or higher)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Advanced automotive applications<BR></FONT> <FONT SIZE=1> <p
align=left style="font-family:times;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Communications and computing<BR></FONT> <FONT SIZE=1> <p align=left
style="font-family:times;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Medical, military and aerospace</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=1> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>High-Tg, lead-free</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>-370HR<BR>
-410HR</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:6pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>High thermal limits (170<SUP>o</SUP>C or higher)<BR></FONT>
<FONT SIZE=1> <p align=left style="font-family:times;margin-top:6pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Lead-free variant compatible with automated lead-free soldering</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:6pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Enterprise class servers<BR></FONT> <FONT SIZE=1> <p align=left
style="font-family:times;margin-top:6pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Entry-level routers and storage solutions<BR></FONT> <FONT SIZE=1> <p align=left
style="font-family:times;margin-top:6pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Mid-range computers<BR></FONT> <FONT SIZE=1> <p align=left
style="font-family:times;margin-top:6pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Advanced automotive electronics</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=1> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>High-speed digital</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>-FR408<BR>
-FR408HR<BR>
-IS415</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>High thermal limits (170<SUP>o</SUP>C or higher)<BR></FONT>
<FONT SIZE=1> <p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Better electrical properties<BR>
</FONT><FONT SIZE=1> <p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Greater transmission efficiency<BR></FONT> <FONT SIZE=1> <p align=left
style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>More robust materials</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Enterprise class servers and storage applications<BR></FONT>
<FONT SIZE=1> <p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>High-speed routers and communication equipment</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=1> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Halogen-free</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>-DE156</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Do not use halogen compounds to impart fire
retardants<BR></FONT> <FONT SIZE=1> <p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>"Green" alternative</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Smart phones<BR></FONT> <FONT SIZE=1> <p align=left
style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Tablets<BR></FONT> <FONT SIZE=1> <p align=left
style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Other high-end consumer products</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=1> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Military / specialty</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>-P95<BR>
-P96<BR>
-406N</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>High thermal limits<BR></FONT> <FONT SIZE=1> <p align=left
style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Very low expansion</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Aerospace equipment<BR></FONT> <FONT SIZE=1> <p align=left
style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Military and other specialty applications</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Standard</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Mid-Tg</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>-IS400</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Moderate thermal limits (under 170<SUP>o</SUP>C)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Automotive electronics</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=1> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Base low-Tg</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>-DE104<BR>
-FR402</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Low thermal limits (125<SUP>o</SUP>C or less)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=1>  </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Basic automotive electronics<BR></FONT> <FONT SIZE=1> <p
align=left style="font-family:times;margin-top:10pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=1>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=1>Entry-level consumer devices</FONT></TD>
</TR>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>We are able to customize our PCB laminate materials to meet particular customer requirements and maintain over 25,000 SKUs, or Stock Keeping Units. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dm12701_customers_and_sales_strategy"> </A>
<A NAME="toc_dm12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  CUSTOMERS AND SALES STRATEGY    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dm12701_sales_and_distribution"> </A>
<A NAME="toc_dm12701_2"> </A></FONT> <FONT SIZE=2><B>  Sales and Distribution    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola's products are primarily sold through our direct sales forces located in Asia, Europe and the United States. As of August&nbsp;1, 2011, we
employed approximately 62 direct sales and technical service representatives. In addition, we use third party distribution channels in the United States, Canada and Europe, as well as in select Asian
countries, primarily to address smaller PCB fabricators. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dm12701_strategic_customer_and_oem_relationships"> </A>
<A NAME="toc_dm12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  Strategic Customer and OEM Relationships    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As a global leader in the high-performance segments of the PCB laminate materials industry, we have developed long-term
customer relationships with leading PCB fabricators such as AT&amp;S, DDi, Gold Circuit </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>87 </B></FONT></P>

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<A NAME="page_dm12701_1_88"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Business </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Electronics,
Hitachi, Ibiden, Multek, Ruwel, Sanmina, TTM Technologies, Unimicron, Viasystems and WUS Printed Circuit. While only one of our customers accounted for more than 10% of our revenues in
each of fiscal 2010, fiscal 2009 and fiscal 2008 and the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010, we believe that our ten largest customers accounted for the majority of our
revenues in each of these periods. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
also maintain strategic relationships with the OEMs&nbsp;our customers serve, such as Alcatel-Lucent, Bosch, Brocade, Cisco, Ericsson, Google, Hewlett-Packard, Huawei, IBM, Motorola, Nokia,
Siemens and Sun Microsystems (now Oracle). We work with OEMs&nbsp;to deliver highly customized products that meet their specific performance requirements on a cost-effective basis. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
have established industry-specific marketing teams dedicated to collaborating with key players in particular end-markets on new product introductions. These teams collaborate with major
OEMs&nbsp;and their PCB fabricators, as well as with our research and development personnel, to specify proprietary resins that meet the specific performance criteria of next generation products.
While OEMs&nbsp;do not purchase laminate materials directly from Isola, they are an important part of the design process, significantly influencing the specific performance requirements of the
laminates and prepreg to be used in new products and in some cases pre-qualifying a limited number of approved suppliers whose materials may be incorporated into the product. In cases
where materials are pre-qualified, PCB fabricators or OEMs&nbsp;will select a particular laminate material among the pre-qualified materials, typically based on price,
service and performance. Once a particular PCB laminate material is designed in or qualified for use in a specific product line and one or more particular laminate suppliers are selected, these
suppliers tend to remain suppliers of choice, even as the PCBs for these products change to address OEM product line improvements or extensions or next generation developments. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
generally sell our products directly to our customers. We do limited advertising in select trade publications, and we actively participate in major trade shows as our principal form of sales
promotion. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dm12701_research_and_development"> </A>
<A NAME="toc_dm12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  RESEARCH AND DEVELOPMENT    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola's business strategy depends on the continued improvement of our PCB laminate technologies. As of August&nbsp;1, 2011, we had approximately 64
employees engaged in research and development, with an additional 24 employees engaged in technical support and additional 19 employees engaged in OEM marketing activities. We maintain a major
research and development facility near our corporate headquarters in Chandler, Arizona, as well as facilities in Germany and Singapore to serve Europe and Asia, respectively. In addition, global teams
of technical and support personnel maintain collaborative partnerships with our customers and leading OEMs&nbsp;in order to help us maintain technological and product leadership. Our OEM marketing
function and research and development function are tightly integrated, and both report to our Chief Technology Officer. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
research and development activities are primarily focused on the following areas: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>High-Speed / High-Frequency Applications</I></B></FONT><FONT SIZE=2>&#151;We are developing laminate materials and related resin formulations that
can support increasingly critical high-speed/high-frequency applications. Specifically, we seek to continually develop improved dielectric platforms which deliver lower
dissipation factors and lower, controlled dielectric constants, and improved performance. We are also developing PCB laminate materials that will support faster data transfer rates in order to enhance
our portfolio of materials for radio frequency ("RF") applications. As a result of these development efforts, we plan to introduce two new products addressing these applications by the end of 2011:
I-Speed, addressing the emerging high-speed applications that go beyond 10 Gigabit Ethernet; and I-Tera, a next generation product for lead-free,
low-loss RF applications. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>88 </B></FONT></P>

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<BR>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>High-Tg, Lead-Free Compatible and High Reliability Products</I></B></FONT><FONT SIZE=2>&#151;We are developing
resins, PCB laminate materials and process enhancements that can support lead-free compatible, high-performance applications that are designed to address increasingly pervasive
environmental regulations and lead-free initiatives. We are focusing on improving dielectric properties and reliability.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Halogen-Free Platforms</I></B></FONT><FONT SIZE=2>&#151;We are currently developing more advanced halogen-free
materials utilizing resin formulations with improved thermal and electrical properties to address the emerging needs of this market, and expect that these next generation halogen-free
products are likely to command higher prices and provide improved margins. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
the six months ended July&nbsp;2, 2011, we spent $5.2 on research and development activities and $0.5&nbsp;million on capital expenditures related to these activities. In fiscal 2010 we spent
$9.5&nbsp;million on research and development activities and $0.7&nbsp;million on capital expenditures related to these activities, in fiscal 2009 we spent $9.2&nbsp;million on research and
development activities and $0.4&nbsp;million on capital expenditures related to these activities, and in fiscal 2008 we spent $10.7 on research and development activities and $0.1&nbsp;million on
capital expenditures related to these activities. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dm12701_notable_research_and_development_accomplishments"> </A>
<A NAME="toc_dm12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  NOTABLE RESEARCH AND DEVELOPMENT ACCOMPLISHMENTS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We continually invest in research and development, as well as in our relationships with key customers and OEMs, in order to develop products that
address the particular needs of the OEMs&nbsp;served by our customers. Many of our R&amp;D efforts result in innovative new products that enable us to gain a "first mover" advantage over our competition
and leading market share. Because many OEM products have life cycles of six to 10&nbsp;years, our research and development efforts can result in long-term, sustainable benefits. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Set
forth below are two examples of our R&amp;D efforts. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dm12701_370hr_(high-tg,_lead-free)"> </A>
<A NAME="toc_dm12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  370HR (High-Tg, Lead-Free)    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Over the past several years, contract manufacturers and PCB fabricators have been compelled to use lead-free soldering alloys due to
increasing consumer and regulatory pressure. These alloys require soldering temperatures significantly higher than lead-containing alloys, and thus the laminate materials industry had
developed a cured laminate capable of withstanding the process. While the cured laminate chemistry solved the higher assembly temperature problem, it also introduced new problems such as thermal
expansion and proved harder for PCB fabricators to drill and process. It was clear that a new laminate product was needed to address these issues. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Through
a unique combination of our intellectual property and technical know-how, we developed a new, patented filler technology that significantly lowered the instance of thermal
expansion and improved the processing attributes of the laminate. This technology was introduced as our 370HR product, which we believe was the first high-Tg, lead-free product
of its kind to offer superior reliability and provide a compelling value proposition to OEMs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Today,
we believe that the 370HR is acknowledged as the "best in class" product for high reliability applications across the telecommunications, high-end computing and high-end
automotive markets. We have a leading position in the high-Tg market segment, and enjoy numerous OEM design approvals for our products in this segment. By anticipating customer needs, we
were able to gain a "first mover" advantage over our competition, and our continuing development efforts have allowed us to maintain our leadership. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dm12701_fr408hr_(high-speed_digital)"> </A>
<A NAME="toc_dm12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  FR408HR (High-Speed Digital)    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The rapid growth of smart phones, the increased use of social media and the expansion of cloud computing have pressured OEMs&nbsp;to develop
servers, routers and other infrastructure hardware that can operate at </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>89 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>ever-higher
speeds. Due to increasing consumer and regulatory pressure, the components of these devices have also needed to be lead-free. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>To
meet the requirements for increased speed and frequency, as well as environmental concerns, PCB fabricators needed a high-performance but cost-effective laminate that would
be compatible with existing manufacturing processes, handle the transition to lead-free soldering, and allow for low-loss signal transmission, all at a reasonable price. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
early 2009, our research department began to address this industry-wide issue, initially using modeling and simulation programs to determine the efficacy of various potential chemical
combinations. Within three months, we had developed a potential materials solution, which was field-tested in collaboration with several PCB fabricators, presenting the successful results to
OEMs&nbsp;just weeks later. In total, it took us less than six months to go from concept to market introduction of our FR408HR laminate material, which we believe is the PCB industry's first and
leading lead-free compatible, high-speed and low-loss laminate. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Today,
the FR408HR is used by major high-end PCB fabricators globally and has been designed into several key OEM product lines. The FR408HR forms an important component of our
high-speed digital product portfolio, which we have been able to grow significantly over the last five years by understanding the needs of our customers and developing innovative products. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dm12701_laminate_manufacturing_process"> </A>
<A NAME="toc_dm12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  LAMINATE MANUFACTURING PROCESS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola maintains 11 manufacturing facilities, strategically located in the United States, Europe and Asia, including nine fully integrated laminate
facilities, one "pressing and finishing-only" facility to serve a customer in a relatively remote location in Asia and one fiberglass manufacturing facility in Italy. Our global network of
plants facilitates quick-turn manufacturing and delivery of product, and minimizes customers' shipping costs and inventory levels. We employ "six sigma" business processes to improve working capital
management and enhance factory productivity. We also employ manufacturing "best practices" throughout our 11 facilities and maintain a dedicated, internet-based private computer network for
manufacturing personnel to share information. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
process for manufacturing our prepreg and laminates is capital intensive and requires sophisticated equipment as well as clean-room environments. The diagram below depicts the key
steps in our manufacturing process.  </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>The
preparation and formulation of specially designed resin systems.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>The
impregnation of specially designed fiberglass fabric with the resin system and partial curing of the resulting prepreg.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>The
assembly of single or multiple plies of prepreg and copper foil in a clean-room environment, which is referred to as "lay-up".
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>4.</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>The
lamination of the copper-clad assemblies under simultaneous exposure to intense heat, pressure and vacuum conditions, which is referred to as
"pressing".
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>5.</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>The
sizing and packaging of the laminates to customer specifications. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>90 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prepreg
is manufactured in a treater at the impregnation stage of the manufacturing process. A treater is a continually operating roll-to-roll machine that impregnates the
fiberglass or other reinforcement fabric with a resin formulation and then sequences the resin-impregnated fabric through a series of ovens which partially cure the resin-fiberglass. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
manufacture CCL by assembling in a clean room one or more plies of prepreg stacked between sheets of specially manufactured copper foil purchased from outside vendors. Similar such assemblies are
then inserted into a large, multiple-opening vacuum lamination press, which subjects the assemblies to intense heat, pressure and vacuum conditions. After the press cycle is completed, the laminates
are removed from the press and sheeted, paneled and finished to customers' specifications. The CCL is then inspected and packaged for shipment to customers. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dm12701_enterprise_software"> </A>
<A NAME="toc_dm12701_9"> </A>
<BR></FONT><FONT SIZE=2><B>  ENTERPRISE SOFTWARE    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>In 2010, Isola completed a long-term project to consolidate its laminate manufacturing facilities on a single ERP platform. Utilizing SAP
ERP software, this system established a common template across all of our laminate operations for the finance/accounting, manufacturing and sales and service functions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
global ERP template enables centralized financial planning and reporting and facilitates a fast and efficient financial closing process at the end of each fiscal period. This template provides a
flexible and standardized methodology to support our anticipated growth. By eliminating older legacy systems and adopting this new system, we believe we have reduced business risk and achieved a high
level of system and data integrity. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
SAP ERP platform is tightly integrated with our global business intelligence system. This analytical environment provides our management with rapid insight into changing operational conditions.
The business intelligence system offers a single source of information from multiple disciplines, including sales and marketing, supply-chain logistics, and financial planning and analysis. It also
provides specific, periodic operational scorecards to guide the management team's ongoing business improvement efforts. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>91 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Business  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="do12701_sources_of_raw_materials"> </A>
<A NAME="toc_do12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  SOURCES OF RAW MATERIALS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Materials costs comprised approximately 70.6% of Isola's total cost of goods sold in the six months ended July&nbsp;2, 2011, and 69.5% in fiscal
2010. Copper, resin and fiberglass are the principal raw materials used in the manufacture of our advanced PCB laminate materials. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
have developed close working relationships with multiple suppliers for each of our three key raw materials. Our suppliers are required to comply with our stringent specifications and technical
requirements. In addition to copper, resin and fiberglass, Isola uses certain specialty materials for which it relies on a limited number of suppliers or a sole supplier. To date, we have not
experienced any major supply disruptions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prices
of raw materials, especially copper, are subject to price fluctuations. Historically, we have been able to pass through raw material price increases more readily in the
high-performance segment of the market than for our mid- or low-Tg materials. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="do12701_intellectual_property"> </A>
<A NAME="toc_do12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  INTELLECTUAL PROPERTY    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We hold a position of technology leadership within the laminate industry, providing our customers with innovative solutions to meet their application
needs. This is a result of our significant investment in research and development, particularly with respect to innovative proprietary resin formulations and our comprehensive patent portfolio. As of
August&nbsp;4, 2011, we held a total of 172 patents (including foreign counterparts) in the United States, Europe and Asia. While these patents are primarily directed to our resin formulations, we
also hold patents related to our thin-glass style and copper foil manufacturing processes. We continue to file new patent applications, for which terms extend up to 20&nbsp;years from
the filing date in the United States. Our key patents include: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Drum
Side Treated Foil, or DSTF, which enables the use of reverse treat copper technology widely used by the copper foil manufacturers;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Styrene
Maleic Anhydride, or SMA, which we have used to formulate many products providing us with a leading edge in high-speed and
high-frequency markets; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>two
patents related to our proprietary Talc mineral-based fillers used in our lead-free compatible PCB laminate materials. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
key U.S. patents described above have expiration dates ranging from 2015 to 2017. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
order to protect our intellectual property rights, we rely on a combination of patent, trade secret, copyright and trademark laws, as well as employee and third-party nondisclosure agreements.
Because of the differences in foreign trademark, patent and other laws concerning proprietary rights, our intellectual property rights may not receive the same degree of protection in foreign
countries as they would in the United States. We believe that while the protection afforded by patent, trademark and trade secret laws may provide some advantages, the competitive position of
participants in our industry is principally determined by such factors as the technical and creative skills of their personnel, the frequency of their new product developments and their ability to
anticipate and rapidly respond to evolving market requirements. Therefore, we have focused our efforts on developing substantial expertise and know-how in our industry, and protecting that
know-how with confidentiality agreements and trade secrets. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition to confidentiality agreements, we rely on a variety of methods to protect unpatented proprietary technology and trade secrets. To protect our proprietary materials formulae, only a select
few of our senior research and development employees have access to key resin formulations. In addition, we ship the ingredients for some of our resins to our offshore facilities in containers which
do not identify by name the components of the resin. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>92 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
rely on our trademarks, trade names and brand names to distinguish our products and services from the products and services of our competitors, and have registered or applied to register many of
these trademarks. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
also license certain of our manufacturing processes to PCB fabricators and copper foil suppliers, from which we derive limited income. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
periodically evaluate our competitors' product offerings in order to identify potential infringements of our intellectual property rights. When deemed appropriate, we have aggressively defended our
intellectual property rights through legal action. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="do12701_competition"> </A>
<A NAME="toc_do12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  COMPETITION    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola has many competitors, ranging in size from large, international corporations, some of which are vertically integrated, to small regional
producers. Some of our competitors are well-established and have a larger market share, as well as greater manufacturing, financial, research and development and marketing resources than
we do. We compete for business in the PCB materials industry primarily on the basis of technology, product performance, innovative new product development, product qualification, price and customer
responsiveness and service. Our primary global competitors in the high-performance market, which we consider to be our core competency, include Guangdong Shengyi Sci. Tech.&nbsp;Co.,
ITEQ, Panasonic, Park Electrochemical, Rogers Corp. and Taiwan Union Technology Corporation. Unlike many of our competitors, we are focused solely on the design, development and manufacturing of PCB
laminate materials. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
a more complete description of the risks we face related to competition, see "Risk Factors&#151;Risks Related to Our Industry and Business". We face intense competition within the PCB
materials industry, including from diversified manufacturers and suppliers, which could negatively impact our results of operations and cause or market share to decline". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="do12701_legal_proceedings"> </A>
<A NAME="toc_do12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  LEGAL PROCEEDINGS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>From time to time, Isola is subject to various legal proceedings that arise in the normal course of our business activities. In addition, from time
to time, third parties may assert
intellectual property infringement claims against us. As of the date of this prospectus, we are not a party to any litigation the outcome of which, if determined adversely to us, would individually or
in the aggregate be reasonably expected to have a material adverse effect on our results of operations or financial position. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="do12701_regulation"> </A>
<A NAME="toc_do12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  REGULATION    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola's operations are subject to various environmental laws and regulations that limit discharges into the environment, establish standards for the
handling, generation, use, emission, release, discharge, treatment, storage and disposal of, or exposure to, hazardous materials, substances and waste, and require cleanup of contaminated soil and
groundwater. These laws and regulations are complex, change frequently and have tended to become more stringent over time. Failure to comply with these laws and regulations could have a material
adverse effect on our operations, including the temporary or permanent shut down of our facilities. Many of these laws and regulations provide for substantial fines and penalties and, in some cases,
criminal sanctions for violations. Some of these laws and regulations may also impose liability for property damage and personal injury stemming from the presence of, or exposure to, hazardous
substances. For example, under the Superfund Act and similar state laws in the United States, or under comparable laws in foreign jurisdictions, if one of our manufacturing facilities were to be
identified by the applicable governmental authority as a hazardous waste disposal site or contaminated area, all parties who may have contributed to </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>93 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Business </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>any
waste, including us, could be jointly and severally liable for the cost of cleanup. Generally, these sites are locations at which numerous persons disposed of hazardous waste. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
are required to certify compliance with various material content restrictions in our products based on laws of various jurisdictions or territories, such as the Restriction of Hazardous Substances
("RoHS") directives in the European Union, and comparable directives in China, which restrict the use of various hazardous materials, including lead, in the manufacture of certain types of electronic
and electrical equipment. The European Union's Registration, Evaluation, Authorization and Restriction of Chemicals regulations ("REACH"), requires companies manufacturing or importing certain
chemical substances into the European Union to register those substances. Disclosure by manufacturers that they use such materials could result in pressure from customers and other constituencies. We
do not believe that these laws or regulations currently apply to our operations, although we continually monitor changes in interpretations of these laws, and regulations adopted under them, for
potential application to our operations. These laws and regulations provide for substantial fines and penalties for violations and, if applicable, could require the change or discontinuation of
certain operations, any of which could have a material adverse effect on us. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
operations are also governed by laws and regulations relating to workplace safety and worker health. We believe we are in material compliance with these laws and regulations. We also believe that
we are in material compliance with applicable labor and employment laws and regulations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="do12701_employees"> </A>
<A NAME="toc_do12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  EMPLOYEES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As of August&nbsp;1, 2011, Isola had approximately 2,088 employees worldwide. Of these employees, 1,703 were engaged in manufacturing operations
and 385 were employed in engineering, sales or administrative positions. We consider our employee relations to be good. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>As
of August&nbsp;1, 2011, approximately 135 of our employees (or 6.5% overall) were members of one of the following unions: in Singapore, the United Workers of Electronic and Electrical Industries;
in Germany, IG Metall; and in Italy, FEMCA CISL and FILTEA CGIL. Our relationship with these unions generally has been satisfactory. Within the last five years, we have not experienced any work
stoppages at any of our facilities. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="do12701_properties_and_facilities"> </A>
<A NAME="toc_do12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  PROPERTIES AND FACILITIES    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola's corporate headquarters are in leased office space located in Chandler, Arizona. We maintain manufacturing facilities and research and
development laboratories globally. We believe that our facilities are adequate for our current and projected needs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>94 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Business </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table sets forth information concerning our principal facilities owned or leased by us. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"140%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="82pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="67pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="102pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="126pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Location</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Owned /<BR>
leased / land<BR>
use rights</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Approximate<BR>
square<BR>
footage</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Expiration of<BR>
lease or land<BR>
use rights</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Type of facility</B></FONT><BR></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Elk Grove, California</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Owned</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>44,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Manufacturing</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Chandler, Arizona<BR>
(3100 W. Ray Road)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Leased</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
18,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>May&nbsp;31, 2013</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Corporate and regional offices</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Chandler, Arizona<BR>
(165 S. Price Road)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Owned</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
97,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Manufacturing; research and development</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Franklin, New Hampshire<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Owned</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
99,700</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>N/A</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
Manufacturing</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fremont, California<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Owned</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
76,800</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Manufacturing</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ridgeway, South Carolina</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Owned</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
110,000</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>N/A</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
Manufacturing</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD ALIGN="CENTER" style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Total in North America</I></B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><B><BR>
446,000</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Hong Kong</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Leased</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
11,400</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>May&nbsp;31, 2012</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Regional offices</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Taoyuan, Taiwan</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Owned</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
138,600</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Manufacturing</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Yangmei, Taiwan</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Owned</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
90,700</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Manufacturing</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Huizhou, China<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Land Use Right</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
220,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>January&nbsp;1, 2048</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Manufacturing</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Suzhou, China<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Land Use Right</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
146,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>December&nbsp;31, 2046</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Manufacturing</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Kuching, Malaysia</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Leased</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
39,200</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>April&nbsp;30, 2012</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Manufacturing</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Singapore</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Leased</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
134,200</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>December&nbsp;31, 2019</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Manufacturing; research and development</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD ALIGN="CENTER" style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Total in Asia</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B><BR>
781,100</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Duren, Germany</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Owned</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
826,300</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Manufacturing; regional offices; research and development</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Brugherio, Italy (glass fabric)</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Leased</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
252,000</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><p align=center style="font-family:times;margin-top:11pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>March&nbsp;9, 2023</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
Manufacturing</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD ALIGN="CENTER" style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Total in Europe</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B><BR>
1,078,300</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>TOTAL WORLDWIDE</I></B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><B><BR>
2,305,400</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

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  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> These facilities have been closed and are currently being marketed for sale.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> There is no private land ownership in China. Land in China is owned by the government and cannot be sold to any individual or entity. Instead, the government grants
or allocates
landholders a "land use right", which is sometimes referred to informally as land ownership. Land use rights are granted for specific purposes and for limited periods. Each period may be renewed at
the expiration of the initial and any subsequent terms. Granted land use rights are transferable and may be used as security for borrowings and other obligations. We have been issued land use right
certificates for our property located in Huizhou, China until 2048 by the municipal government of Boluo and for our property located in Suzhou, China until 2046 by the municipal government of Suzhou
Industrial Park. Such certificates may be renewed upon our application and the municipal governments' approval.  </I></FONT></DD></DL>
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>95 </B></FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=100,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=168097,FOLIO='95',FILE='DISK108:[11ZAS1.11ZAS12701]DO12701A.;21',USER='KSEAMON',CD='29-OCT-2011;18:57' -->
<A NAME="page_do12701_1_96"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Business </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="do12701_financial_information___do102307"> </A>
<A NAME="toc_do12701_8"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  FINANCIAL INFORMATION FOR SEGMENTS AND GEOGRAPHICAL AREAS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For information regarding revenues from external customers by segment and geographic area, measures of profit or loss and total assets by segment and
long-lived assets by geographic area, see Note&nbsp;14 to our consolidated financial statements and Note&nbsp;12 to our unaudited interim financial statements, included elsewhere in
this prospectus. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>96 </B></FONT></P>

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NAME="page_dq12701_1_97"> </A>


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</FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dq12701_management"> </A>
<A NAME="toc_dq12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Management    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prior to this offering, we were a private company controlled by our Sponsors. The following table sets forth certain information
regarding our executive officers, other key employees and directors. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="187pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="23pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Age</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Position</B></FONT><BR></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=6 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Raymond Sharpe</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>62</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>President, Chief Executive Officer and Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>F. Gordon Bitter</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>68</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Executive Vice President and Chief Financial Officer</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tarun Amla</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>47</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Executive Vice President and Chief Technology Officer</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Mathew LaRont</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>47</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>President, Asia and Global Supply Chain Officer</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Robert Chaney</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>51</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>President, Americas</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Karl Stollenwerk</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>53</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>President, Europe</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Kevin Burns</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>47</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Donald Colvin</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>58</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>H. McIntyre Gardner</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>50</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jordon Kruse</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>40</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jeffrey McCreary</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>54</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Eric Noeth</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>26</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cassidy Traub</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>30</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="dq12701_executive_officers_and_key_employees"> </A>
<A NAME="toc_dq12701_2"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  EXECUTIVE OFFICERS AND KEY EMPLOYEES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Raymond Sharpe</I></B></FONT><FONT SIZE=2> is the President and Chief Executive Officer of Isola, a position that he has held
since he joined us in June 2004. Mr.&nbsp;Sharpe has also served as a member of our board of directors since September 2011, and served as a member of the board of directors of the Sponsor Holding
Company since June 2004. Prior to joining Isola, Mr.&nbsp;Sharpe was the Chief Executive Officer of Cookson Electronics and a member of the board of directors of Cookson Group&nbsp;Plc, a position
he held for over ten years. Mr.&nbsp;Sharpe helped build Cookson Electronics into a leading global supplier of materials and equipment servicing the PCB, PCB assembly and semiconductor packaging
markets. In addition, Mr.&nbsp;Sharpe served for ten years as a director for SPS Technologies,&nbsp;Inc., a NYSE-listed manufacturer of specialty materials for the aerospace industry.
He also currently serves as a director of Cytec Industries&nbsp;Inc., a NYSE-listed specialty chemicals company. Mr.&nbsp;Sharpe received a bachelor of arts degree from East Carolina
University and has over thirty years of experience in the electronics industry. In April 2011, Mr.&nbsp;Sharpe was elected to serve on the board of IPC, the industry association for printed circuit
board and electronics manufacturing service companies. Mr.&nbsp;Sharpe was selected to serve as a member of our board of directors because of his extensive leadership experience in the electronics
industry, his intimate knowledge of Isola's business and operations, and his deep understanding of both our markets and our competitors. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>F. Gordon Bitter</I></B></FONT><FONT SIZE=2> is the Executive Vice President and Chief Financial Officer of Isola, a position that he has held since he joined us in 2008. Prior to
joining Isola, Mr.&nbsp;Bitter was the Senior Vice President and Chief Financial Officer of Plexus, a Nasdaq-listed contract manufacturer of high-end technology products servicing the
wireless infrastructure, networking, medical and aerospace markets. Prior to his five year tenure at Plexus, Mr.&nbsp;Bitter was the Senior Vice President and Chief Financial Officer of Hadco
Corporation, a NYSE-listed PCB manufacturer. Mr.&nbsp;Bitter received a
bachelor of science degree in mathematics from Bucknell University and an M.B.A. from the Wharton School of the University of Pennsylvania. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Tarun Amla</I></B></FONT><FONT SIZE=2> is the Executive Vice President and Chief Technology Officer of Isola, and is responsible for our global research and technology and global
OEM marketing programs with a focus on new product development. Prior to his current role, Mr.&nbsp;Amla served in various leadership capacities, including as Vice </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>97 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>President
of Operations and Technology and Vice President of Marketing and Technology. Prior to joining Isola, Mr.&nbsp;Amla was the Director of Operations for AlliedSignal Laminate Systems in
Singapore. During his more than twenty years in the electronics industry, Mr.&nbsp;Amla has gained extensive experience in general management, manufacturing operations, engineering, product
technology, marketing and sales. Mr.&nbsp;Amla received a bachelor of science degree in mechanical engineering from the National Institute of Technology Calicut in India, a master of science degree
in engineering from Arizona State University with an emphasis on modeling and simulation, a master of science degree in mechanical engineering with a concentration in computational mechanics from
Purdue University, and an M.B.A. from the Kellogg School of Management at Northwestern University. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Mathew LaRont</I></B></FONT><FONT SIZE=2> is the President, Asia, a position he has held since June 2011. In July 2009, Mr.&nbsp;LaRont assumed additional responsibility as
Isola's Global Supply Chain Officer, a position that he still holds. In his current roles, Mr.&nbsp;LaRont is responsible for all aspects of our Asian operations and oversees our strategic global
supply chain, managing supply contracts and supplier licensing. Prior to his current position, Mr.&nbsp;LaRont served as the President, Americas and prior to that, Vice President, Sales and
Marketing&#151;Asia. Mr.&nbsp;LaRont joined Isola in 2004. Prior to joining Isola, Mr.&nbsp;LaRont held various positions with Solectron Corporation, a global electronics manufacturing
company, including Director of Global Materials and General Manager in Taiwan. Prior to his tenure at Solectron Corporation, Mr.&nbsp;LaRont served as the Director of Sales and Operations for
Sanmina-SCI Corporation, a Nasdaq-listed integrated electronics manufacturing service provider, and held various managerial positions with Praegitzer Industries,&nbsp;Inc., including
Financial Controller and Regional Sales Manager for the West Coast. With over twenty years of electronics industry experience, Mr.&nbsp;LaRont brings a broad range of expertise to Isola. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Robert Chaney</I></B></FONT><FONT SIZE=2> is the President, Americas, a position he has held since joining us in August 2011. In his current role, Mr.&nbsp;Chaney is responsible
for all sales, customer service and manufacturing operations in the Americas. Prior to joining Isola, Mr.&nbsp;Chaney was President of the PCB Interconnect Technologies division at
Sanmina-SCI Corporation, a position he held from June 2010 to December 2010. Prior to Sanmina-SCI, Mr.&nbsp;Chaney was President of First Mile Technologies, a provider of
Internet, security monitoring, fiber connectivity, phone, and cable television services, a position he held from January 2004 to June 2010. Mr.&nbsp;Chaney has held senior-level positions with a
number of other high-technology companies, including ATMI, Nanovation Technologies, AT&amp;T and IBM. Mr.&nbsp;Chaney is a graduate of Purdue University and has more than twenty years of
experience in the electronics industry. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Karl Stollenwerk</I></B></FONT><FONT SIZE=2> is the President, Europe, a position he has held since May 2009. In his current role, Mr.&nbsp;Stollenwerk is responsible for
managing all operations for the Isola and Isola Fabrics business in Europe. Before assuming his current position, Mr.&nbsp;Stollenwerk was Director of Sales, General Manager and Managing Director of
our Isola Dueren operation. Mr.&nbsp;Stollenwerk joined Isola in October 1987 and, during his more than twenty years with Isola, he has acquired extensive experience in marketing and sales in the
electronics industry. He has a broad knowledge of all customer-related aspects of the European PCB industry. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
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<BR></FONT><FONT SIZE=2><B>  NONEMPLOYEE DIRECTORS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Kevin Burns</I></B></FONT><FONT SIZE=2> has served as a member of our board of directors since September 2011, and served as a
member of the board of directors of the Sponsor Holding Company since June 2004. Mr.&nbsp;Burns has been a Partner in the Operations Group of TPG Capital, a private equity investment firm, since
2003. In March 2008 he became the Partner in Charge of TPG Capital's Manufacturing/Industry Sector. Prior to joining TPG Capital, he served as Executive Vice President and Chief Materials Officer of
Solectron Corporation, an electronics manufacturing services provider. Prior to joining Solectron, Mr.&nbsp;Burns served as Vice President of Worldwide Operations of the Power Generation Business
Unit of Westinghouse Corporation, and President of Westinghouse Security Systems. Prior to Westinghouse, he was a consultant at </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>98 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>McKinsey&nbsp;&amp;&nbsp;Company,&nbsp;Inc.
and spent three years at the General Electric Corporation in various operating roles. Mr.&nbsp;Burns received a bachelor of science degree in mechanical
and metallurgical engineering (cum laude) from the University of Connecticut and received an M.B.A. from the Wharton School of the University of Pennsylvania. He currently serves on the boards of
directors of Armstrong World Industries, Graphic Packaging Holding&nbsp;Co. and American Tire Distributors. From 2008 to 2011, Mr.&nbsp;Burns also served on the board of directors of Freescale
Semiconductor Holdings I,&nbsp;Ltd. Mr.&nbsp;Burns was selected to serve as a member of our board of directors because of his extensive management expertise and his knowledge of both our Company
and industry. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Donald Colvin</I></B></FONT><FONT SIZE=2> has served as a member of our board of directors since September 2011. Mr.&nbsp;Colvin joined ON Semiconductor and SCI&nbsp;LLC as
Senior Financial Director in March 2003 and currently serves as Executive Vice President and Chief Financial Officer. Before joining ON Semiconductor, beginning in 1998, Mr.&nbsp;Colvin served as
Vice President of Finance and Chief Financial Officer at Atmel Corporation, a manufacturer of advanced semiconductors. Mr.&nbsp;Colvin served as Chief Financial Officer of a subsidiary of Atmel from
1995 to 1998. From 1985 to 1995, he held various positions with European Silicon Structures, most recently as Chief Financial Officer. Mr.&nbsp;Colvin also held various financial positions with
Motorola Semiconductors Europe from 1977 to 1985. Mr.&nbsp;Colvin holds a bachelor of arts degree in economics and an M.B.A. from the University of Strathclyde, Scotland. From May 2007 to August
2011, Mr.&nbsp;Colvin served as a member of the board of directors of Applied Micro Circuits Corporation, a Nasdaq-listed provider of integrated circuits for processing, transporting and
storing information. Mr.&nbsp;Colvin was selected to serve as a member of our board of directors because of his finance and accounting expertise, managerial experience and knowledge of our industry. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>H. McIntyre Gardner</I></B></FONT><FONT SIZE=2> has served as a member of our board of directors since September 2011. Mr.&nbsp;Gardner retired in 2008 from Merrill
Lynch&nbsp;&amp;&nbsp;Co.,&nbsp;Inc. as the Head of Americas Region and Global Bank Group, Global Private Client. Prior to joining Merrill Lynch in July 2000, Mr.&nbsp;Gardner was the President
and Chief Operating Officer of Helen of Troy Limited, a Nasdaq-listed personal care products manufacturer. Mr.&nbsp;Gardner has also been a member of the board of directors of Spirit Airlines, a
Nasdaq-listed provider of passenger airline services, since 2010. Mr.&nbsp;Gardner received a bachelor of arts degree from Dartmouth College. Mr.&nbsp;Gardner was selected to serve as a member of
our board of directors because of his financial management expertise, qualifications as a business executive and his prior experience as a director of both public and private companies. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Jordon Kruse</I></B></FONT><FONT SIZE=2> has served as a member of our board of directors since September 2011, and served as a member of the board of directors of the Sponsor
Holding Company since October 2010. Mr.&nbsp;Kruse is a Managing Director at Oaktree Capital Management,&nbsp;LP, a Los Angeles based institutional money manager. He is a member of Oaktree's
Principal Fund, which focuses on investments in private equity and distressed debt for control and is responsible for the aviation, packaging, chemicals, building products and consumer apparel
sectors. Prior to joining Oaktree in 2001, Mr.&nbsp;Kruse was an attorney at the law firm of Kirkland&nbsp;&amp; Ellis&nbsp;LLP, which he joined in 1997. Mr.&nbsp;Kruse serves on the board of
directors of Spirit Airlines,&nbsp;Inc., a Nasdaq-listed provider of passenger airline services, Dayton Superior Corporation, a manufacturer and distributor of products used in concrete
construction, Chesapeake UK Holding&nbsp;Ltd, a supplier of specialty paperboard packaging products in Europe, Nordenia International AG, a manufacturer of plastic films and flexible packaging, BP
Clothing&nbsp;LLC, an apparel company, Cyanco Corporation, a manufacturer of sodium cyanide used in the gold mining industry, and CF Group&nbsp;Inc., a commercial furniture company.
Mr.&nbsp;Kruse received a bachelor of arts degree from the University of Virginia and a J.D. from Northwestern University. Mr.&nbsp;Kruse was selected to serve as a member of our board of
directors because of his financial expertise, knowledge of our Company and his general business experience. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Jeffrey McCreary</I></B></FONT><FONT SIZE=2> has served as a member of our board of directors since September 2011, and served as a member of the board of directors of the Sponsor
Holding Company since January 2006. Mr.&nbsp;McCreary is an </FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>independent
management consultant who retired in 2005 as a Senior Vice President for Texas Instruments. In this capacity he was responsible for Texas Instruments' sales and account management, field
technical support and channel marketing strategies around the globe. Prior to joining Texas Instruments, Mr.&nbsp;McCreary held engineering and strategic marketing positions within the Bell System.
Mr.&nbsp;McCreary received a bachelor of science degree in electrical engineering and an honorary doctorate of engineering from the Rose-Hulman Institute of Technology.
Mr.&nbsp;McCreary currently serves on the board of Gennum Corporation, a Toronto Stock Exchange-listed provider of semiconductor products and intellectual property cores for consumer connectivity,
enterprise, video broadcast and data communications applications. Mr.&nbsp;McCreary was selected to serve as a member of
our board of directors because of his international experience in business, his background in engineering, and his extensive experience in the technology industry. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Eric Noeth</I></B></FONT><FONT SIZE=2> has served as a member of our board of directors since September 2011, and served as a member of the board of directors of the Sponsor
Holding Company since October 2010. Mr.&nbsp;Noeth has been a member of the technology-focused investment practice of TPG Capital, a private equity investment firm, since August 2009. Prior to
joining TPG Capital, Mr.&nbsp;Noeth worked in Morgan Stanley's Investment Banking Division, where he focused on advising companies in the technology and telecom industries. Mr.&nbsp;Noeth joined
Morgan Stanley in 2007 after receiving a bachelor's degree in business administration from Indiana University, where he graduated with honors. Mr.&nbsp;Noeth was selected to serve as a member of our
board of directors because of his finance and banking background and experience in the technology industry. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I>Cassidy Traub</I></B></FONT><FONT SIZE=2> has served as a member of our board of directors since September 2011. Mr.&nbsp;Traub is a Vice President at Oaktree Capital
Management,&nbsp;LP, a Los Angeles based institutional money manager. He is a member of Oaktree's Principal Fund, which focuses on investments in private equity and distressed debt for control, and
is responsible for the packaging, chemicals, technology and business services sectors. Prior to joining Oaktree in 2005, Mr.&nbsp;Traub was an investment banker at UBS Investment Bank, which he
joined in 2003. Mr.&nbsp;Traub serves on the board of directors of Crimson Exploration&nbsp;Inc., a Nasdaq-listed energy company, Chesapeake UK Holding&nbsp;Ltd, a supplier of specialty
paperboard packaging, and Cyanco Corporation, a manufacturer of sodium cyanide used in the gold mining industry. Mr.&nbsp;Traub received a bachelor of arts degree in economics from Princeton
University. Mr.&nbsp;Traub was selected to serve as a member of our board of directors because of his financial expertise, knowledge of our Company and his general business experience. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dq12701_composition_of_the_board_of_directors"> </A>
<A NAME="toc_dq12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  COMPOSITION OF THE BOARD OF DIRECTORS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Controlled Company Exemption.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;After the completion of this offering, the Sponsors and their affiliates will control a majority of the voting power of our
outstanding ordinary shares (approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% if the underwriters do not exercise their option to purchase additional shares). In addition, at the completion of this offering, we will
enter into a shareholders agreement with our Sponsors that will give each of TPG Capital and Oaktree the right to nominate representatives to our board of directors, and require all of our Sponsors to
vote for the election of these nominees to our board of directors, so long as TPG Capital and Oaktree own specified percentages of our outstanding voting securities. See "Certain Relationships and
Related Party Transactions&#151;Agreements with Our Sponsors&#151;Shareholders and Registration Rights Agreement". As a result, we are a "controlled company" within the meaning of the
Nasdaq corporate governance standards. Under the Nasdaq rules, if more than 50% of the voting power of a listed company is held by an individual,
group or another company, the listed company is a "controlled company" and may elect not to comply with certain Nasdaq corporate governance standards, including: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
requirement that a majority of our board of directors consist of independent directors; </FONT></DD></DL>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the
committee's purpose and responsibilities;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose
and responsibilities; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
have adopted charters for our audit, nominating and corporate governance and compensation committees, intend to conduct annual performance evaluations for these committees, and initially expect all
of our committee members and a majority of our board of directors to be considered independent directors under the independence criteria of Nasdaq. All of our directors, except Mr.&nbsp;Sharpe, are
considered independent directors. Although we intend to comply with these listing requirements whether or not we are a controlled company, there is no guarantee that we will not take advantage of the
controlled company exemptions in the future. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements
of Nasdaq. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Any
director may be removed from office by our shareholders. Our Principal Sponsors are together the beneficial owners of a majority of our ordinary shares and will be able to unilaterally remove
directors. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dq12701_board_committees"> </A>
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<BR></FONT><FONT SIZE=2><B>  BOARD COMMITTEES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prior to the consummation of this offering, we anticipate that our board of directors will establish an audit committee, a compensation committee and
a corporate governance and nominating committee, as discussed below. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Audit Committee.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our audit committee will be responsible for, among other things, making recommendations concerning the engagement of our independent public
accountants, reviewing with the independent public accountants the plans and results of the audit engagement, approving professional services provided by the independent public accountants, reviewing
the independence of the independent public accountants, considering the range of audit and non-audit fees and reviewing the adequacy of our internal accounting controls. Our audit
committee will be comprised of Messrs.&nbsp;Colvin (chairman), Gardner and McCreary, each of whom is a financial expert for purposes of the Nasdaq rules. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Compensation Committee.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The compensation committee will be primarily concerned with administering programs and policies regarding the compensation of executive
officers and employee benefit plans. The committee is responsible for determining compensation of our executive officers and other employees and overseeing the administration of all employee benefit
plans and programs. Our compensation committee will be comprised of Messrs.&nbsp;Gardner (chairman), Burns and Kruse. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Corporate Governance and Nominating Committee.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The corporate governance and nominating committee will be primarily concerned with identifying individuals qualified
to become members of our board of directors, selecting the director nominees for the next annual meeting of the shareholders and reviewing our corporate governance policies. The committee will be
responsible for reviewing director compensation and benefits, overseeing the annual self-evaluations of our board of directors and making recommendations to the board concerning the
structure and membership of the other board committees. Our corporate governance and nominating committee will be comprised of Messrs.&nbsp;McCreary (chairman), Noeth and Traub. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
so long as we are a controlled company within the meaning of the Nasdaq listing standards, each of TPG Capital and Oaktree have the right to designate one member to our compensation committee, and
one </FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Management </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>member
to our corporate governance and nominating committee. See "Certain Relationships and Related Party Transactions&#151;Agreements with Our Sponsors-Shareholders and Registration Rights
Agreement". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dq12701_compensation_committee__dq102484"> </A>
<A NAME="toc_dq12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>There are no compensation committee interlocks; no executive officer of ours serves as a member of the board of directors or the compensation
committee of another entity that has an executive officer serving on our board of directors. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>102 </B></FONT></P>

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<A NAME="toc_ds12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Executive Compensation    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_compensation_discussion_and_analysis"> </A>
<A NAME="toc_ds12701_2"> </A></FONT> <FONT SIZE=2><B>  COMPENSATION DISCUSSION AND ANALYSIS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>This section explains the material elements of the compensation of our named executive officers: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Raymond
Sharpe, President and Chief Executive Officer
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>F.
Gordon Bitter, Executive Vice President and Chief Financial Officer
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Tarun
Amla, Executive Vice President and Chief Technology Officer
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Robert
Haskins, former President, Asia
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Mathew
LaRont, President, Asia and Global Supply Chain Officer </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_how_have_compensation___ds102262"> </A>
<A NAME="toc_ds12701_3"> </A>
<BR></FONT><FONT SIZE=2><B><I>How have compensation decisions historically been made?    <BR>    </I></B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prior to this offering, we were a privately held company controlled by our Sponsors. Accordingly, we have not been subject to stock exchange listing
or SEC rules, including those requiring that a majority of our board of directors be independent or regarding the formation and functioning of board committees, such as the compensation committee.
Prior to this offering, the non-employee members of the Sponsor Holding Company's board of managers, which we refer to in this section as our board of directors, have functioned as a
compensation committee and established our general compensation philosophy. The board of directors has annually reviewed and approved any changes in the compensation of our executives and granted
options, restricted units and other awards. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Historically,
our chief executive officer has made recommendations to our board of directors and has participated in discussions regarding executive compensation, but has not participated in any
discussions or decisions regarding his own compensation. Members of our corporate finance, legal and human resources staffs have provided data and analyses to the board of directors at their request. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
late 2009, we engaged Mercer, a global human resources and financial services consulting firm, to conduct a market review of our executive compensation program. To analyze our executive
compensation program, Mercer used two market references to compare our compensation practices for our executives to those in our market: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><I>Published Compensation Surveys:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Two private surveys regarding executive compensation in the high
technology industry: the Mercer US Global Premium Executive Remuneration Suite and the Towers Watson Top Management Compensation Survey; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><I>Select Peer Group:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Publicly available data for a competitive peer group of publicly traded companies in
the electronic manufacturing industry of similar revenue size and market capitalization. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
2010 peer group consisted of the following companies: </FONT></P>
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<TD style="font-family:times;"><FONT SIZE=2>&#150;&gt;&nbsp;&nbsp;&nbsp;&nbsp;Merix Corp*</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&#150;&gt;&nbsp;&nbsp;&nbsp;&nbsp;H.B. Fuller</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&#150;&gt;&nbsp;&nbsp;&nbsp;&nbsp;Mentor Graphics</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>&#150;&gt;&nbsp;&nbsp;&nbsp;&nbsp;Powerwave Technologies</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&#150;&gt;&nbsp;&nbsp;&nbsp;&nbsp;RF Micro Devices</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&#150;&gt;&nbsp;&nbsp;&nbsp;&nbsp;Rogers Corporation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>&#150;&gt;&nbsp;&nbsp;&nbsp;&nbsp;SMART Modular Technologies</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&#150;&gt;&nbsp;&nbsp;&nbsp;&nbsp;TTM Technologies</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&#150;&gt;&nbsp;&nbsp;&nbsp;&nbsp;Viasystems Group*</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#150;&gt;&nbsp;&nbsp;&nbsp;&nbsp;Zebra Technologies</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>*</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Effective February&nbsp;16, 2010, Merix Corp merged with Viasystems Group.  </I></FONT></DD></DL>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


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 <UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Mercer benchmarked each of the elements of our 2010 executive compensation, including base salaries, performance-based annual incentives and
long-term equity incentive awards, against those of other executives in the selected peer group as well as the published compensation
surveys and reported their findings to management. Our chief executive officer then presented the Mercer analysis to our board of directors. The Mercer analysis indicated that the base salaries and
the target annual incentives for each of our named executive officers were generally below the market median. Additionally, the Mercer analysis indicated that our long-term equity
incentive levels (when a 3-year average grant was assumed, as we have not typically provided annual equity grants) were below the 25th&nbsp;percentile. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Mercer US Global Premium Executive Remuneration Suite included data from 2,757 companies in approximately 52 major industry classifications, including high tech manufacturing. The Towers Watson
Data Services: Survey Report on Top Management Compensation included data from 3,422 companies in a variety of industries, including high tech manufacturing. The Mercer and Towers Watson survey data
was equally weighted. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
each reviewed position, Mercer blended peer group data with the broader surveys, equally weighing the selected peer group and broader published compensation survey data. This blended data was used
to benchmark base salaries, annual incentive and long-term incentive opportunities as well as total compensation. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
2010, we again engaged Mercer to conduct a market overview of our executive compensation program for 2011. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_how_is_the_compensation_progra__how02789"> </A>
<A NAME="toc_ds12701_4"> </A>
<BR></FONT><FONT SIZE=2><B><I>How is the compensation program likely to evolve after the offering?    <BR>    </I></B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In 2011, immediately prior to the completion of this offering, we will reorganize as a Cayman Islands company, Isola Group&nbsp;Ltd., and both the
Sponsor Holding Company and the Sponsor Limited Partnership will be liquidated. In connection with this offering, the board of directors of our Cayman Islands company, which we refer to in this
section as our new board of directors, will establish a compensation committee that will be comprised of only certain members of the new board of directors. For additional information regarding the
compensation committee of our new board of directors that will oversee our compensation program following the completion of this offering, see "Management&#151;Board Committees." We expect that
our compensation committee will meet several times per year to determine the components and levels of compensation and the appropriate performance metrics. While we expect that our
post-offering compensation plans and programs will not significantly differ from our historical practices, there may be changes to some of our compensation practices as a public company,
such as annual equity incentive awards, long-term equity incentive awards and changes in the metrics that we use to make annual cash incentive awards, to help motivate executive officers
to achieve and exceed our business objectives, and to align the incentives of our officers with the long-term interests of our shareholders. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_what_types_of_equity_compensat__wha05772"> </A>
<A NAME="toc_ds12701_5"> </A>
<BR></FONT><FONT SIZE=2><B><I>What types of equity compensation awards have historically been made, and how will our equity compensation practices change after the offering?    <BR>    </I></B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Historically, our equity compensation awards granted to executive officers and other employees have been made through awards to purchase limited
partner common units in the Sponsor Limited Partnership (the "partnership units"), as well as profits interests in the Sponsor Limited Partnership ("profits interest units"). Prior to completion of
this offering, the Sponsor Limited Partnership owns 100% of our current Luxembourg Holding Company, and is wholly-owned by the Sponsor Holding Company. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
2004, following the acquisition of Isola by TPG Capital and certain of our other Sponsors, the Sponsor Limited Partnership established a "profits interest program" under which the Sponsor Limited
Partnership granted profits interest units to certain of our senior executives, including Mr.&nbsp;Sharpe and Mr.&nbsp;Amla. The </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>104 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<UL>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2>Sponsor
Limited Partnership's profits interest program allows participants to share in the increase in value of Isola above certain valuation thresholds related to the purchase price paid for Isola in
the 2004 acquisition (in this case, at 2x and 3x such price). The program was intended to provide an incentive to management to keep focused on our long-term value. The profits interest
units vest after our Sponsors have received certain returns on their investment. All profits interest units are expected to be redeemed prior to the consummation of this offering. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
2004, the Sponsor Limited Partnership also established an option plan (the "2004 Option Plan") to permit grants of options to purchase partnership units ("options") to our executive management and
other employees. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
2007, the Sponsor Limited Partnership established a restricted unit plan (the "2007 Restricted Unit Plan") to allow us to make grants of restricted partnership units ("restricted units"). A number
of grants of these restricted units were made to key employees to provide an economic incentive for them to enhance the value of the Company and as a retention vehicle. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
the fourth quarter of 2010, we issued additional equity interests in the Sponsor Holding Company to the lenders who participated in our mezzanine credit agreement. The issuance of these equity
interests substantially diluted the value of the partnership units. This dilution also diminished the value of the outstanding options that had been previously granted under the 2004 Option Plan. As a
result,
the outstanding option grants provided little or no incentives to the recipients, particularly since there was no public market for our securities. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>To
address this reduction in the value of the outstanding options, our board of directors authorized two new programs. The first program for eligible participants was the offer to either retain their
existing options with the originally issued terms or surrender their options for $0.53 in cash for each vested option payable immediately as well as $0.53 for each unvested option payable upon
completion of the unvested option's original service-based vesting condition. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
second program was the opportunity to participate in a cash incentive plan. Under this plan, the Company would accrue 5% of each participant's annual base salary and pay out these accrued amounts
to participants at the end of 2012 provided that we achieved certain financial objectives and that a liquidity event, such as the public offering of our securities, occurred prior to
December&nbsp;31, 2012. Eligible employees were required to surrender their outstanding options in order to participate in these programs; all eligible employees agreed to participate. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
small number of our most senior executives, including our named executive officers, were not eligible to participate in these two programs. Rather, this group agreed to the cancellation of their
prior option grants in exchange for new equity awards comprised of new option and restricted unit grants, both of which were issued on October&nbsp;8, 2010. Both the new option and restricted unit
grants vest ratably over three years on the anniversary date of the initial award, assuming continued employment with the Company and, with respect to the restricted units, provided that there has
been either (i)&nbsp;a change in control, or (ii)&nbsp;an initial public offering of equity securities of the Company and that the participant may sell such securities in a public market free of
any "market stand-off" or "lock-up" restrictions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
connection with the completion of this offering, our new Cayman Islands company, Isola Group&nbsp;Ltd., will establish a new long-term incentive plan that will allow our executive
management to receive equity awards, such as stock options, restricted stock and restricted stock units for ordinary shares of Isola Group&nbsp;Ltd. Except for the profits interest units, which are
expected to be redeemed prior to the consummation of this offering, all of the existing ownership interests and equity awards of executive management and other employees in the Sponsor Limited
Partnership, including the options and restricted </FONT></P>

</UL>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>105 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<UL>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2>units,
will, concurrent with this offering, be converted into equivalent ordinary shares and awards for ordinary shares, respectively, of Isola Group&nbsp;Ltd., which will be publicly traded. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_compensation_programs_and_practices_for_2010"> </A>
<A NAME="toc_ds12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  COMPENSATION PROGRAMS AND PRACTICES FOR 2010    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_what_were_the_objectives_and_p__wha03490"> </A>
<A NAME="toc_ds12701_7"> </A></FONT> <FONT SIZE=2><B><I>What were the objectives and principles of our named executive officers' compensation?    <BR>    </I></B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our philosophy is to fairly compensate all of our employees, including our named executive officers, for their specific contributions to our success.
Compensation is designed to both motivate and retain employees taking into account both short-term and long-term considerations, all within the context of our ability to
finance any compensation programs. We consider, among other things, our financial condition, compensation practices of our peer group companies and the market surveys provided by Mercer, and general
economic trends (including their likely effects on our projected profitability and cash flows) in making compensation decisions. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
2010 executive compensation program was designed to achieve the following objectives: </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Attract,
motivate and retain the talented people needed to lead a complex, high-technology business.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Motivate
executives to make decisions and pursue opportunities that are aligned with the interests of our Sponsors but without exposing us to undue risks.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Balance
our financial performance and the executive's contributions to that success, including by making variable cash compensation comprise a greater percentage of
overall cash compensation for more senior executives.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Emphasize
a greater component of cash compensation in our overall compensation package, given the limited equity pool approved by our Sponsors from which to make
grants to executives.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Increase
earnings and cash flow to meet debt service requirements and to generate funds to finance growth by establishing Consolidated Adjusted EBITDA (as defined
under our senior secured credit agreement) targets to determine annual cash incentive awards. </FONT></DD></DL>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_what_were_the_components_of_ou__wha06007"> </A>
<A NAME="toc_ds12701_8"> </A>
<BR></FONT><FONT SIZE=2><B><I>What were the components of our named executive officers' 2010 compensation program and how did they reflect the objectives and principles described  above?    <BR>    </I></B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The principal components of our named executive officers' compensation program in 2010 were as follows: </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><I>Base Salary.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This element provides a fixed component of compensation that is not tied to our financial
or operational performance. Base salary offers regular compensation for the fulfillment of regularly assigned duties and responsibilities. Although salaries are typically reviewed each year, there are
no assurances of annual increases.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><I>Annual Cash Incentive.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our variable incentive compensation plan ("Bonus Plan") rewards executives for
meeting or exceeding Consolidated Adjusted EBITDA (as defined under our senior secured credit agreement) targets tied to our financial plan for the year. The opportunity to earn a substantial cash
award under the Bonus Plan places a significant percentage of total cash compensation "at risk" and dependent on achieving our annual earnings and cash flow objectives. Our board of directors looked
at the selected peer group data and the market surveys provided by Mercer to determine the allocation between short-term cash incentives, including Bonus Plan awards, which are based on
the current year's financial performance, and longer-term equity incentives for our executives. The variable portions of our executive compensation packages are designed to motivate our
executives to pursue present opportunities that are aligned with the Company's long-term interests while not encouraging undue risk taking. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>106 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><I>Long-term Equity Incentives.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A substantial part of compensation which is also "at risk" is
longer-term equity based compensation in the form of options, restricted units and profits interest units in the Sponsor Limited Partnership. The incentive to participants in these
arrangements is not only related to our financial performance, but also to our ability to establish a market for our equity securities, either through a public offering of our securities or other
liquidity event. Executives have typically been awarded one-time grants at or close to their date of hire. However, as previously discussed, when we refinanced our first-and
second-lien credit facilities in the fourth quarter of 2010, we cancelled most of these outstanding options, which were then under water, and made new grants of options and restricted
units to certain executive officers. All other holders of canceled options became participants in a long-term cash incentive plan.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><I>Employment and Change of Control Agreements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have employment agreements with our executive officers
that set forth severance and other arrangements following the executive's termination "without cause" or a change in control which results in the executive's separation from the Company. We believe
these arrangements with our executive officers are appropriate to ensure they will not be distracted by personal considerations in the case of a potential acquisition of the Company or other strategic
transaction. </FONT></DD></DL>
<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
named executive officers are eligible to participate in our employee benefit plans on the same terms as our other employees. These benefits include a 401(k) plan, group health insurance and short-
and long-term disability insurance. We do not have an active defined benefit retirement plan, although Mr.&nbsp;Amla is a vested participant in our former pension plan which was frozen
on December&nbsp;31, 2003 and former supplemental executive retirement plan, or SERP, which was frozen on January&nbsp;31, 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
believe that the combination of these components of compensation achieves the objectives and follows the principles that our board of directors has established. In the following sections, we
provide more detail about the various components of our 2010 compensation programs and their roles in achieving our objectives consistent with our principles. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_how_were_base_salaries_determined_"> </A>
<A NAME="toc_ds12701_9"> </A>
<BR></FONT><FONT SIZE=2><B><I>How were base salaries determined?    <BR>    </I></B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In fiscal 2009, base salaries for our named executive officers were maintained at the same level as the prior year due to the impact of the global
recession on our business. Improving business conditions in fiscal 2010, however, afforded us an opportunity to make selective salary increases, effective January 2010. The following chart sets forth
the increases in the
base salaries of our named executive officers as well as the percentage change between fiscal 2009 and 2010: </FONT></P>

</UL>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Percentage deviation in 2010 base<BR>
salary from 2009&nbsp;market data<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Percentage<BR>
change<BR>
2009/2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Named executive officer</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2009 Base<BR>
salary</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2010 Base<BR>
salary</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>25th<BR>
Percentile</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Median</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>75th<BR>
Percentile</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=19 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Raymond Sharpe</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>546,364</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>546,364</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-6.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-14.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>F. Gordon Bitter</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>330,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>330,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>25.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-10.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tarun Amla</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>255,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>285,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-7.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-20.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Robert Haskins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>250,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>275,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>16.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-9.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-20.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Mathew LaRont</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>240,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>265,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>18.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-10.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-20.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Market data from 2009 used to benchmark our named executive officers' 2010 base salaries was weighted evenly among companies in our selected peer group and companies in proprietary
compensation surveys, with 50% of the market data deriving from our peer group and 50% from proprietary compensation surveys. For more information on our selected peer group and the proprietary
compensation surveys used to benchmark our named executive officers, see "&#151;Compensation Discussion and Analysis&#151;How have compensation decisions historically been made?".  </I></FONT></DD></DL>
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 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>107 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>Neither Mr.&nbsp;Sharpe nor Mr.&nbsp;Bitter received an increase in base salary in fiscal 2010, although each of their target awards under our Bonus Plan
was increased. Our board of directors believed that Mr.&nbsp;Sharpe and Mr.&nbsp;Bitter should have more compensation "at risk" during what was expected to be a turnaround year. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
salary increases for Messrs.&nbsp;Amla, Haskins and LaRont were made in order to move their compensation closer to the market median, and, in the case of Mr.&nbsp;LaRont, to reflect his
assumption of additional responsibilities for the supply chain function. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_how_was_annual_bonus_compensation_determined_"> </A>
<A NAME="toc_ds12701_10"> </A>
<BR></FONT><FONT SIZE=2><B><I>How was annual bonus compensation determined?    <BR>    </I></B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our board of directors established a Bonus Plan for fiscal 2010, in which our named executive officers and other executives participated. The award
opportunities for each participant are expressed as a percentage of base salary. We chose Consolidated Adjusted EBITDA (as defined under our senior secured credit agreement) as the sole criterion to
determine awards because of its emphasis on operational earnings and its ability to serve as a proxy for "cash flow". Achieving a certain level of Consolidated Adjusted EBITDA is also an element of a
key covenant of our principal credit agreements, so its use as the criterion for the 2010 Bonus Plan aligns the interest of our executives with the corporate objective of ensuring compliance with
these agreements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Consolidated
Adjusted EBITDA (as defined under our senior secured credit agreement) is different than Adjusted EBITDA used elsewhere in this prospectus. Under our senior secured credit agreement, it
includes additional add-backs to net income for certain pension costs and other taxes. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
2010 Bonus Plan had three target levels of Consolidated Adjusted EBITDA for determining bonus awards: </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>a
"threshold" level of Consolidated Adjusted EBITDA of $40.0&nbsp;million for fiscal 2010, below which no bonus could be earned;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>a
"target" level of Consolidated Adjusted EBITDA of $53.0&nbsp;million for fiscal 2010, above which a bonus could be earned; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>a
"maximum" level of Consolidated Adjusted EBITDA of $65.0&nbsp;million for fiscal 2010, beyond which no additional bonus could be earned. </FONT></DD></DL>
<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Each
target level of Consolidated Adjusted EBITDA for fiscal 2010 was tied to our fiscal 2010 financial plan. Awards for attainment of Consolidated Adjusted EBITDA between the threshold and the target
would have been determined by straight line interpolation, as was attainment of Consolidated Adjusted EBITDA between target and maximum. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Actual
Consolidated Adjusted EBITDA for fiscal 2010 was $89.7&nbsp;million and well in excess of the $65.0&nbsp;million maximum credited level of Consolidated Adjusted EBITDA achievement, so our
named executive officers received the maximum bonuses achievable under the 2010 Bonus Plan in fiscal 2010. The chart below shows the bonus opportunity (expressed both as a dollar amount and as a
percentage of base salary) at each level and the actual bonus amount and percentage of base salary that were paid to each named executive. For example, Mr.&nbsp;Sharpe received a bonus of $983,455,
equal to 180% of his base salary. Had we only achieved the target level of Consolidated Adjusted EBITDA, his bonus would have been </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>108 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<UL>
<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>$491,728
(equal to 90% of his base salary). Had we only achieved the threshold level of Consolidated Adjusted EBITDA, Mr.&nbsp;Sharpe's bonus would have been $368,796 (equal to 67.5% of his base
salary). </FONT></P>

</UL>
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<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="20pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Named executive officer</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Threshold</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Target</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Maximum</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Actual</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=13 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Raymond Sharpe</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>368,796<BR>
(67.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>491,728<BR>
(90</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>983,455<BR>
(180</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>983,455<BR>
(180</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>F. Gordon Bitter</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
160,875<BR>
(48.75</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
214,500<BR>
(65</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
429,000<BR>
(130</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
429,000<BR>
(130</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tarun Amla</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
106,875<BR>
(37.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
142,500<BR>
(50</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
285,000<BR>
(100</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
285,000<BR>
(100</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Robert Haskins</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
103,125<BR>
(37.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
137,500<BR>
(50</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
275,000<BR>
(100</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
275,000<BR>
(100</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Mathew LaRont</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
99,375<BR>
(37.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
132,500<BR>
(50</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
265,000<BR>
(100</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
265,000<BR>
(100</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><BR>)%</FONT></TD>
</TR>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our named executive officers have a large percentage of their overall compensation at risk given they are instrumental to our overall success and have the
greatest ability to impact our financial and operational results. This compensation allocation is consistent with executives at our peer group companies and the market surveys provided by Mercer. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
do not have a policy to recover or "claw back" incentive compensation in an amount that exceeds the amount that would have been earned based on our actual financial performance determined after an
accounting restatement due to material non-compliance with any financial reporting requirements of the securities laws. While we understand that legislative mandates will require such a
policy in the future, we are waiting to see the final rules to be issued by the SEC before adopting a policy. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_what_types_of_long-term_incent__wha03521"> </A>
<A NAME="toc_ds12701_11"> </A>
<BR></FONT><FONT SIZE=2><B><I>What types of long-term incentive compensation did the named executive officers receive?    <BR>    </I></B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Historically, option grants have been made to executives and other management employees around the dates of their hire. We have also made grants of
restricted units, profits interest units and options at other times as warranted by business conditions but have not done so on a consistent basis. Equity awards have been designed to align the
incentives of our executives with the interests of our Sponsors and with our long-term success. Additionally, we believe that equity awards have enabled us to attract, motivate and retain
executive talent. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As
previously discussed, in the fourth quarter of 2010, we cancelled substantially all grants of options under the 2004 Option Plan for participants, including our named executive officers. Our board
of directors subsequently approved new equity-based compensation for a small group of our most senior executives, including our named executive officers, comprised of both options and restricted
units, to strike a balance between equity grants that resulted in unit price appreciation (options) and grants that resulted in retention value (restricted units). Newly hired executives have received
grants similar to those of the incumbent executives who agreed to the cancellation of earlier grants. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
new option grants were made under the 2010 Option Plan and provide plan participants with non-qualified options to acquire partnership units. The option exercise price of the grants
was $0.49 per partnership unit, which was slightly higher than the estimated value of the partnership units on the date of grant of $0.41 per partnership unit. The options have a 10-year
term and are subject to a three-year ratable vesting schedule on the anniversary dates of the original grant. </FONT></P>

</UL>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>109 </B></FONT></P>

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<A NAME="page_ds12701_1_110"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
new restricted unit grants were made under the 2010 Restricted Unit Plan. The estimated fair market value of the restricted units on the date of grant was $0.63 per partnership unit. The
restricted units vest pursuant to a three-year ratable vesting schedule on the anniversary dates of the original grant, provided that there has been either (i)&nbsp;a change in control
or (ii)&nbsp;an initial public offering of equity securities of the Company and that the participant may sell such securities in a public market free of any "market stand-off" or
"lock-up" restrictions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
number of partnership units subject to each award was determined by our board of directors taking into account market surveys of equity grants conducted by Mercer, internal equity, and the size of
the available equity pool. The equity grants for the named executive officers that were made in 2010 and the 2x and 3x profits interests that were granted to Mr.&nbsp;Sharpe and Mr.&nbsp;Amla in
2004 are reflected in the table below: </FONT></P>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Options<BR>
(#)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Restricted units<BR>
(#)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2X Profits interest<BR>
units</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>3X Profits interest<BR>
units</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=13 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Raymond Sharpe</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,767,100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,094,300</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>210,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>210,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>F. Gordon Bitter</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,537,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>465,100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tarun Amla</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,252,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>458,400</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Robert Haskins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,200,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>400,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Mathew LaRont</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,200,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>400,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="ds12701_do_the_named_executive_officers_receive_perquisites_"> </A>
<A NAME="toc_ds12701_12"> </A>
<BR>    </I></FONT><FONT SIZE=2><B><I>Do the named executive officers receive perquisites?    <BR>    </I></B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>To facilitate the attraction and retention of highly qualified executives, we provide our named executive officers with other specified benefits that
we believe are limited and consistent with current market practices. We do not provide any tax gross-ups to our named executive officers. In 2010, all of our named executive officers were
eligible for an executive physical and Mr.&nbsp;Sharpe and Mr.&nbsp;Haskins received supplemental life insurance. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Under
the terms of Mr.&nbsp;Sharpe's employment agreement, he receives an annual stipend of $35,000, which is paid in monthly installments, for a country club membership and a company car allowance. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
2010, Mr.&nbsp;Amla received an annual stipend of $12,000 for a company car allowance. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Mr.&nbsp;Haskins,
as an expatriate executive, received payments to cover housing, airfare for home leave for him and his family, automobile and other expenses, as well as tax equalization. We
believe that these benefits are appropriate and in line with other similarly situated expatriate executives. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_do_any_of_the_components_of_ou__do_05863"> </A>
<A NAME="toc_ds12701_13"> </A>
<BR></FONT><FONT SIZE=2><B><I>Do any of the components of our named executive officers' compensation provide benefits upon a termination of employment or a change in control?    <BR>    </I></B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our named executive officers have agreements that provide for severance benefits for specific involuntary terminations of employment, including
termination "without cause" or in the event of a change of control. The terms and estimated amounts of these benefits are described below under "Potential Payments upon Involuntary Termination without
Cause before a Change in Control" and "Potential Payments upon Involuntary Termination without Cause or by Executive for Good Reason after a Change in Control". Under the terms of the 2010 Option Plan
and the 2010 Restricted Unit Plan, our board of directors may accelerate the vesting of all unvested awards in the event of a change of control, in its sole discretion. For a discussion of the terms
of our 2011 Equity Incentive Plan see "Executive Compensation&#151;Equity Incentive Plans". We believe these provisions are reasonable because the possibility of a change in control could cause
uncertainty among our named executive officers and concern over potential loss of equity awards and therefore could result in their departure or distraction to the detriment of our Company and our </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>110 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>shareholders.
We believe the combination of severance and change in control arrangements will help our executive officers maintain continued focus and dedication to their responsibilities to help
maximize shareholder value. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_do_we_consider_the_tax_impact___do_02707"> </A>
<A NAME="toc_ds12701_14"> </A>
<BR></FONT><FONT SIZE=2><B><I>Do we consider the tax impact of the compensation that we provided?    <BR>    </I></B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Section&nbsp;162(m) of the Internal Revenue Code limits the tax deductibility by a public company of compensation in excess of $1&nbsp;million
paid to certain of its most highly compensated executive officers. However, performance-based compensation that has been approved by shareholders is excluded from the $1&nbsp;million limit if, among
other requirements, the compensation is payable only upon attainment of pre-established, objective performance goals. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
limitations of Section&nbsp;162(m) have not been applicable to us prior to this offering. Following this offering, our compensation committee will consider the tax impact of all compensation
arrangements in light of our overall compensation philosophy and objectives. However, there may be circumstances in which our and our shareholders' interests are best served by providing compensation
that is not fully deductible and our ability to exercise discretion outweighs the advantages of qualifying compensation under Section&nbsp;162(m). </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ds12701_actions_taken_in_fiscal_2011"> </A>
<A NAME="toc_ds12701_15"> </A>
<BR></FONT><FONT SIZE=2><B>  ACTIONS TAKEN IN FISCAL 2011    <BR>    </B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As a part of its annual review of executive compensation, our board of directors made the following adjustments to the base salaries of our named
executive officers for fiscal 2011, all of which were effective as of January 2011. </FONT></P>

</UL>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Percentage deviation<BR>
from 2010&nbsp;market data<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Named executive officer</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>2011 Base<BR>
salary</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Percentage<BR>
increase</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>25th<BR>
Percentile</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Median</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>75th<BR>
Percentile</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=16 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Raymond Sharpe</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>600,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-4.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-15.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>F. Gordon Bitter</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>340,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-14.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tarun Amla</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>315,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-6.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-24.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Robert Haskins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>285,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>16.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-1.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-22.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Mathew LaRont</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>275,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>16.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-3.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>-20.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

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  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Market data from 2010 used to benchmark our named executive officers' 2011 base salaries was weighted evenly among companies in our selected peer group and companies in proprietary
compensation surveys, with 50% of the market data deriving from our peer group and 50% from proprietary compensation surveys. For more information on our selected peer group and the proprietary
compensation surveys used to benchmark our named executive officers, see "&#151;Compensation Discussion and Analysis&#151;How have compensation decisions historically been made?".  </I></FONT></DD></DL>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Mr.&nbsp;Sharpe had not received a salary increase in two years, and his salary was well below the median for chief executive officers of comparable
experience and tenure. Accordingly, his salary was increased from $546,364 to $600,000, an increase of 9.8%. Mr.&nbsp;Sharpe's salary remains below the market median. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Mr.&nbsp;Amla's
salary was increased from $285,000 to $315,000, an increase of 10.5%. Mr.&nbsp;Amla's increase reflected an adjustment to move his salary closer to the market median and to
compensate him for the elimination of a car allowance. Mr.&nbsp;Amla's salary remains below the market median. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Messrs.&nbsp;Bitter,
Haskins and LaRont received salary increases of 3% to 4%, to provide cost of living adjustments comparable to those extended to non-executive employees in the United
States. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Mr.&nbsp;Haskins
resigned as an officer of Isola, effective May&nbsp;16, 2011. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>111 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We also adopted a Bonus Plan for 2011 that is similar in structure to the 2010 Bonus Plan. It is based on Consolidated Adjusted EBITDA (as defined under our senior secured
credit agreement) and is tied to our current operating plan. The threshold level of Consolidated Adjusted EBITDA achievement for 2011 exceeds the 2010 maximum credited level of Consolidated Adjusted
EBITDA achievement, reflecting the compensation committee's desire to continue to make the plan goals challenging to achieve: </FONT></P>
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<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="74pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="82pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="82pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Performance level</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Threshold</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Target</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Maximum</B></FONT><BR></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=7 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Payout Trigger</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>75% of plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100% of plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>115% of plan</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Payout (as % of target)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>75%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>200%</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>In connection with this offering, we anticipate implementing an omnibus incentive compensation plan that would enable us to grant a range equity-based incentive
awards, including stock options, restricted stock, restricted stock units and stock appreciation rights, the vesting criteria of which may be performance- or time-based. See "Executive
Compensation&#151;Equity Incentive Plans". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="du12701_compensation_risk_assessment"> </A>
<A NAME="toc_du12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  COMPENSATION RISK ASSESSMENT    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our new board of directors reviewed our compensation policies and practices for all employees and determined that our compensation policies and
programs are not structured to be reasonably likely to have a material adverse effect on Isola. Our new board of directors believes that the mix and design of the elements of executive compensation do
not encourage management to assume excessive risks, based on the following: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
allocation of compensation between cash compensation and long-term equity compensation, combined with our typical three year vesting schedule (with
vesting at a rate of 33<SUP>1</SUP>/<SMALL>3</SMALL>% for each year of continued employment following the grant date), discourages short-term risk taking;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
approach of goal setting, setting of targets with payouts at multiple levels of performance, capping the amount of our incentive payouts, and evaluation of
performance results assist in mitigating excessive risk-taking;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
compensation decisions include subjective considerations, which restrain the influence of formulae or objective factors on excessive risk taking; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
business does not face the same level of risks associated with compensation for employees at financial services (traders and instruments with a high degree of
risk). </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>112 </B></FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="du12701_summary_compensation_table"> </A>
<A NAME="toc_du12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  SUMMARY COMPENSATION TABLE    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table sets forth information with respect to our named executive officers for fiscal 2010: </FONT></P>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="34pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="55pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="63pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="63pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="55pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name and principal position</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Year<SUP>(1)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Salary<BR>
($)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Bonus<SUP>(2)</SUP><BR>
($)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Stock<BR>
awards<SUP>(3)(5)</SUP><BR>
($)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Option<BR>
awards<SUP>(4)(5)</SUP><BR>
($)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>All other<BR>
compensation<BR>
($)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Change in<BR>
pension<BR>
value and<BR>
non-qualified<BR>
deferred<BR>
compensation<BR>
earnings<BR>
($)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
($)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=25 style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Raymond Sharpe</B></FONT><FONT SIZE=1><BR>
President and Chief Executive Officer</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>2010</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>556,871</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>983,455</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>689,409</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>2,028,431</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>45,882</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><SUP>(6)</SUP></FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>4,304,048</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>F. Gordon Bitter</B></FONT><FONT SIZE=1><BR>
Executive Vice President and Chief Financial Officer</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
2010</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
336,346</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
429,000</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
293,013</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
510,539</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
1,568,898</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Tarun Amla</B></FONT><FONT SIZE=1><BR>
Executive Vice President and Chief Technology Officer</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
2010</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
292,673</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
385,000</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR><SUP>(7)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
288,792</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
445,725</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
17,493</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR><SUP>(8)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
15,000</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR><SUP>(9)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
1,444,683</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Robert Haskins</B></FONT><FONT SIZE=1><BR>
Former President, Asia<SUP>(10)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
2010</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
287,319</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
275,000</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
252,000</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
398,100</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
305,204</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR><SUP>(11)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
1,517,623</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1><B>Mathew LaRont</B></FONT><FONT SIZE=1><BR>
President, Asia and Global Supply Chain Officer, former President, North America<SUP>(12)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
2010</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
269,115</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
265,000</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
252,000</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
434,900</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
5,504</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR><SUP>(13)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
1,226,519</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> The base salary amounts, Mr.&nbsp;Sharpe's stipend and Mr.&nbsp;Amla's car allowance reflect the fact that fiscal 2010 had 53&nbsp;weeks.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Except as otherwise described in the footnote below, represents cash bonuses paid under our 2010 Bonus Plan, our annual cash incentive plan that rewarded our named
executive officers
for meeting or exceeding Consolidated Adjusted EBITDA targets tied to our 2010 financial plan.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(3)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents restricted limited partner common units in the Sponsor Limited Partnership.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(4)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents options to purchase limited partner common units in the Sponsor Limited Partnership.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(5)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> The amounts shown reflect the incremental fair value of each new award granted to our named executive officers in the fourth quarter of 2010 under the 2010 Option
Plan in exchange for
the cancellation of each existing award held by our named executive officers in the fourth quarter of 2010 granted under the 2004 Option Plan, computed in accordance with the provisions of FASB ASC
Topic 718. Assumptions used in the calculation of these amounts are included in Note&nbsp;9 to our consolidated financial statements included in this prospectus. As required by SEC rules, the
amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(6)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents the aggregate value during 2010 of all perquisites provided to Mr.&nbsp;Sharpe. Under the terms of Mr.&nbsp;Sharpe's employment agreement, he receives an
annual stipend
of $35,673, which is paid in monthly installments, for a country club membership and a car allowance. Also includes life insurance premiums for Mr.&nbsp;Sharpe in the amount of $7,057 and matching
contributions made by the Company to his 401(k) account in the amount of $3,152.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(7)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents (a)&nbsp;a bonus of $285,000 under our 2010 Bonus Plan; and (b)&nbsp;a one-time bonus of $100,000 paid to Mr.&nbsp;Amla in connection with expenses he
incurred as a result of his relocation from Singapore to the United States.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(8)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents the aggregate value during 2010 of all perquisites provided to Mr.&nbsp;Amla which includes $12,231 for a car allowance and matching contributions made by
the Company to
his 401(k) account in the amount of $5,262.  </I></FONT></DD></DL>
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>113 </B></FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=118,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=228491,FOLIO='113',FILE='DISK108:[11ZAS1.11ZAS12701]DU12701A.;36',USER='LSMITH',CD='30-OCT-2011;17:25' -->
<A NAME="page_du12701_1_114"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<P style="font-family:times;text-align:justify"></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(9)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents an increase of: (i)&nbsp;$4,000 in Mr.&nbsp;Amla's qualified pension value; and (ii)&nbsp;$11,000 in Mr.&nbsp;Amla's supplemental executive retirement plan.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(10)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Mr.&nbsp;Haskins resigned from the Company, effective May&nbsp;16, 2011.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(11)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents the aggregate value during 2010 of all perquisites provided to Mr.&nbsp;Haskins, including: (i)&nbsp;$17,813 for a club membership; (ii)&nbsp;$180,325
for rent,
utilities and other housing related expenses; (iii)&nbsp;overseas allowance of $70,152; (iv)&nbsp;$6,606 for tax preparation services; (v)&nbsp;$2,922 for life insurance premiums; and
(vi)&nbsp;$27,386 in contributions to the Mandatory Provident Fund in Hong Kong.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(12)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Mr.&nbsp;LaRont served as President, North America and Global Supply Chain Officer during 2010. He currently serves as President, Asia and Global Supply Chain
Officer.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(13)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents the aggregate value during 2010 of all perquisites provided to Mr.&nbsp;LaRont which includes matching contributions made by the Company to his 401(k)
account in the
amount of $5,504.  </I></FONT></DD></DL>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="du12701_fiscal_2010_grants_of_plan-based_awards"> </A>
<A NAME="toc_du12701_3"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  FISCAL 2010 GRANTS OF PLAN-BASED AWARDS    <BR>    </B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table provides information regarding all grants of plan-based awards that were made to or earned by our named executive
officers during fiscal 2010 as well as information regarding certain options granted in prior years under the 2004 Option Plan that were cancelled and exchanged for new options granted under the 2010
Option Plan. Disclosure on a separate line item is provided for each grant of an award made to and each repriced option held by a named executive officer. The information in this table supplements the
dollar value of options and other awards set forth in the "Summary Compensation Table" by providing additional details about the awards. </FONT></P>

</UL>
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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="75pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="103pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="108pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="105pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Grant date<SUP>(1)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Number of<BR>
stock awards<SUP>(2)</SUP><BR>
(#)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Number of securities<BR>
underlying options<SUP>(3)</SUP><BR>
(#)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Exercise of base price<BR>
of option awards<BR>
($/unit)<SUP>(4)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Grant date fair value<BR>
of stock and option<BR>
awards</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=16 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Raymond Sharpe</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10/8/2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,094,300</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>689,409</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10/8/2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,767,100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2,028,431</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>F. Gordon Bitter</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
10/8/2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
465,100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
293,013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10/8/2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,537,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>510,539</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Tarun Amla</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
10/8/2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
458,400</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
288,792</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10/8/2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,252,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>445,725</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Robert Haskins</B></FONT><FONT SIZE=2><SUP>(5)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
10/8/2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
400,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
252,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10/8/2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,200,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>398,100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Mathew LaRont</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
10/8/2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
400,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
252,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10/8/2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,200,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>434,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

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<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" >


  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> The general partner of the Sponsor Limited Partnership approved the grants of the option and restricted unit awards on September&nbsp;30, 2010. The actual grants were made as of the
dates set forth in the table.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents restricted limited partner common units in the Sponsor Limited Partnership.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(3)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents options to purchase limited partner common units in the Sponsor Limited Partnership.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(4)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents the exercise price following repricing of the options that occurred on October&nbsp;8, 2010.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(5)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Mr.&nbsp;Haskins resigned from the Company, effective May&nbsp;16, 2011.  </I></FONT></DD></DL>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><B>114 </B></FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=119,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=744172,FOLIO='114',FILE='DISK108:[11ZAS1.11ZAS12701]DU12701A.;36',USER='LSMITH',CD='30-OCT-2011;17:25' -->
<A NAME="page_du12701_1_115"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


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 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<P style="font-family:times;text-align:justify"></FONT></P>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="du12701_outstanding_equity_awa__du101994"> </A>
<A NAME="toc_du12701_4"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  OUTSTANDING EQUITY AWARDS AS OF THE END OF FISCAL 2010    <BR>    </B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table provides information concerning unexercised option awards and stock awards that have not vested for each of our named executive
officers as of January&nbsp;1, 2011: </FONT></P>

</UL>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="150%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="75pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="79pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="87pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Option awards<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Number of<BR>
securities<BR>
underlying<BR>
unexercised<BR>
options (#)<BR>
exercisable</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Stock awards<SUP>(2)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Unexercisable (#)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Option exercise<BR>
price ($)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Option expiration<BR>
date</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Number of<BR>
stock awards<BR>
held that have<BR>
not vested (#)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Market value of<BR>
stock awards<BR>
held that have<BR>
not yet vested ($)<SUP>(3)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=15 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Raymond Sharpe</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,767,100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10/8/2020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,094,300</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>842,611</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>F. Gordon Bitter</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,537,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10/8/2020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>465,100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>358,127</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Tarun Amla</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,252,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10/8/2020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>458,400</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>352,968</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Robert Haskins<SUP>(4)</SUP></B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,200,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10/8/2020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>400,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>308,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Mathew LaRont</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,200,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10/8/2020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>400,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>308,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

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  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents options to purchase limited partner common units in the Sponsor Limited Partnership. Each of the option grants shown in the table vests over a period of three years in
equal installments on the anniversary date of the grant (i.e.,&nbsp;the first third of the grant vests on October&nbsp;8, 2011, the second third of the grant vests on October&nbsp;8, 2012 and
the remaining third of the grant vests on October&nbsp;8, 2013).
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents restricted limited partner common units in the Sponsor Limited Partnership. Each of the restricted unit grants shown in the table vests over a period of
three years in
equal installments on the anniversary date of the grant (i.e.,&nbsp;the first third of the grant vests on October&nbsp;8, 2011, the second third of the grant vests on October&nbsp;8, 2012 and
the remaining third of the grant vests on October&nbsp;8, 2013), provided that there has been either (i)&nbsp;a change in control or (ii)&nbsp;an initial public offering of equity securities of
the Company and that the participant may sell such securities in a public market free of any "market stand-off" or "lock-up" restrictions.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(3)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents the estimated market value of the restricted limited partner common units in the Sponsor Limited Partnership as of January&nbsp;1, 2011.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(4)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Mr.&nbsp;Haskins resigned from the Company, effective May&nbsp;16, 2011.  </I></FONT></DD></DL>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="du12701_option_exercises_and_stock_vested"> </A>
<A NAME="toc_du12701_5"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  OPTION EXERCISES AND STOCK VESTED    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>None of our named executive officers had any vested equity grants in fiscal 2010 and as a result, there were no exercises of grants. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="du12701_pension_benefits"> </A>
<A NAME="toc_du12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  PENSION BENEFITS    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="93pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="98pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="102pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="86pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Plan name<SUP>(1)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Number of years of<BR>
credited service</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Present value of<BR>
accumulated benefit<BR>
($)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Payments during<BR>
last fiscal year<BR>
($)</B></FONT><BR></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=12 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Raymond Sharpe</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>F. Gordon Bitter</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Tarun Amla</B></FONT><FONT SIZE=2><SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Retirement Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(3)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(5)</SUP></FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>29,609</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>SERP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(4)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(6)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>141,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Robert Haskins</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Mathew LaRont</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

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  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Pension benefits are provided to the named executive officer under the Isola USA Corp. Retirement Plan ("Retirement Plan") and the Supplement Executive Retirement Plan ("SERP").
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Mr.&nbsp;Amla is the only named executive officer who participated in the Retirement Plan or the SERP.  </I></FONT></DD></DL>
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>115 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=120,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=368245,FOLIO='115',FILE='DISK108:[11ZAS1.11ZAS12701]DU12701A.;36',USER='LSMITH',CD='30-OCT-2011;17:25' -->
<A NAME="page_du12701_1_116"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<P style="font-family:times;text-align:justify"></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(3)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> The Retirement Plan was frozen on December&nbsp;31, 2003.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(4)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> The SERP was frozen on January&nbsp;31, 2009.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(5)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Mr.&nbsp;Alma's credited service in the Retirement Plan began on January&nbsp;4, 2000 (when he became a U.S.-based employee of the Company) and terminated on
December&nbsp;31,
2003 when the Retirement Plan was frozen.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(6)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Mr.&nbsp;Alma's credited service in the SERP began on January&nbsp;1, 2004 (when the SERP was established) and terminated on January&nbsp;31, 2009 when the SERP was
frozen.  </I></FONT></DD></DL>
 </DIV>
 <UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The benefit formulas and assumptions used to calculate these estimates are as follows: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Retirement Plan is a defined benefit plan that was frozen on December&nbsp;31, 2003. The benefit formula for the annual annuity payable at age 65 is 1.3% of final average earnings (based on the
highest 60 consecutive months of the last 120&nbsp;months prior to the freeze date of W-2 earnings, not greater than the Internal Revenue Code limit for each year) times years of
service. The actuarial assumptions used to determine the present value are the funding assumptions used under the Pension Protection Act funding rules as of January&nbsp;1, 2011 (for the value as of
December&nbsp;31, 2010) and as of January&nbsp;1, 2010 (for the value as of December&nbsp;31, 2009). Specifically, the interest rates are funding segment rates of 3.78% for the first five years,
6.31% for the next 15&nbsp;years, and 6.57% for the years beyond 20&nbsp;years and the IRS 2011 Static Mortality Table, and 5.03% for the first 5&nbsp;years, 6.73% for the next 15&nbsp;years,
and 6.82% for the years beyond 20&nbsp;years and the IRS 2010 Static Mortality Table, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
SERP is a defined benefit plan that was frozen January&nbsp;31, 2009. The benefit formula is the same as the Retirement Plan, without the Retirement Plan compensation and benefit limitations.
Service is credited from January&nbsp;1, 2004 through the date of the freeze, January&nbsp;31, 2009. The actuarial assumptions used to determine the present value are the assumptions specified in
the SERP, the 30-year Treasury rate as of November of the prior year and GAR 1994 Mortality. The interest rates used are 4.19% as of December&nbsp;31, 2010 and 4.31% as of
December&nbsp;31, 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Mr.&nbsp;Alma
participated in the Retirement Plan from January&nbsp;4, 2000, the date on which he became a U.S.-based employee of the Company, to December&nbsp;31, 2003 when the Retirement Plan
was frozen. The Retirement Plan is a qualified retirement plan in which all Company employees were eligible to participate. In January 2004, the Company established the SERP to replace the benefits
provided under the Retirement Plan, which had been frozen, and to supplement the benefits provided under the Company's 401(k) plan. Participation in the SERP was limited to management or highly
compensated employees who were relocated in connection with the Company moving its headquarters from LaCrosse, Wisconsin to Chandler, Arizona in 2004. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="du12701_employment_agreements___du102330"> </A>
<A NAME="toc_du12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS    <BR>    </B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Raymond Sharpe.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We entered into an employment agreement with Raymond Sharpe, our President and Chief Executive Officer, on June&nbsp;2, 2004, which was amended
and restated as of August&nbsp;11, 2008. If we terminate Mr.&nbsp;Sharpe's employment without cause, he is entitled to receive his base salary at the monthly rate in effect as of the date of
termination for a period of eighteen months. If we terminate Mr.&nbsp;Sharpe's employment without cause or he resigns for good reason within two years following a change in control, then
Mr.&nbsp;Sharpe is entitled to a lump sum payment equal to 1.5 times his annual base salary at the date of termination plus his target bonus. In addition, for the eighteen month period following the
date of termination, he is entitled to continued medical benefits that he was receiving at the date of termination. We pay Mr.&nbsp;Sharpe an annual stipend of $35,000 for a country club membership
and a car allowance. Mr.&nbsp;Sharpe's employment agreement also includes non-competition and non-solicitation covenants by Mr.&nbsp;Sharpe for a one-year
period following termination of his employment with us for any reason. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>116 </B></FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_du12701_1_117"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> F. Gordon Bitter.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We entered into an employment agreement with Gordon Bitter, our Executive Vice President and Chief Financial Officer, on June&nbsp;30, 2009. If
we terminate Mr.&nbsp;Bitter's employment without cause or he resigns for good reason following a change in control, Mr.&nbsp;Bitter is entitled receive his current monthly base salary for a
period of 12&nbsp;months in accordance with our normal payroll practices. During the period in which he is receiving severance benefits from us, Mr.&nbsp;Bitter is eligible to continue to
participate in the health and benefit coverage that is available to our employees. Mr.&nbsp;Bitter's employment agreement also includes non-competition and non-solicitation
covenants by Mr.&nbsp;Bitter for a one-year period following termination of his employment with us for any reason. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Tarun Amla.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We entered into a restated employment agreement with Tarun Amla, our Executive Vice President and Chief Technology Officer, on October&nbsp;1, 2004.
If we terminate Mr.&nbsp;Amla's employment at
any time for any reason, he is entitled receive his current monthly base salary for a period of 12 months in accordance with our normal payroll practices. Mr.&nbsp;Amla's employment agreement also
includes non-competition and non-solicitation covenants by Mr.&nbsp;Amla for a one-year period following termination of his employment with us for any reason. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Robert Haskins.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We entered into an employment agreement with Robert Haskins, our former President, Asia, on November&nbsp;17, 2004 and amended the agreement as
of March&nbsp;10, 2005, March&nbsp;28, 2006 and May&nbsp;27, 2008. On March&nbsp;1, 2011, Mr.&nbsp;Haskins voluntarily resigned from his position with Isola, effective May&nbsp;16, 2011.
Under the terms of his employment agreement, Mr.&nbsp;Haskins received his current base salary paid in accordance with our usual payroll procedures up until the effective date of his resignation,
and participated in the health and benefit coverage that are available to our employees. Mr.&nbsp;Haskins did not receive any other severance benefits from us in connection with his resignation. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Mathew LaRont.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We entered into an employment agreement with Mathew LaRont, our President, Asia and Global Supply Chain Officer on April&nbsp;30, 2007. If we
terminate Mr.&nbsp;LaRont's employment without cause, Mr.&nbsp;LaRont is entitled receive his current monthly base salary for a period of 12&nbsp;months in accordance with our normal payroll
procedures. During the period in which he is receiving severance benefits from us, Mr.&nbsp;LaRont is eligible to continue to participate in the health and benefit coverage that is available to our
employees. Mr.&nbsp;LaRont's employment agreement also includes non-competition and non-solicitation covenants by Mr.&nbsp;LaRont for a one-year period
following termination of his employment with us for any reason. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="du12701_potential_payments_upon_involu__pot03692"> </A>
<A NAME="toc_du12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION WITHOUT CAUSE BEFORE A CHANGE IN CONTROL    <BR>    </B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The table below quantifies the potential payouts to each of the named executive officers upon involuntary termination without cause before a change
in control. The potential payouts assume (a)&nbsp;the employment </FONT></P>

</UL>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>117 </B></FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>agreements
were effective as of the last business day of our fiscal 2010 year and (b)&nbsp;no change in control occurred on or before such date. </FONT></P>

</UL>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="72pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="67pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Cash payment</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Continuation of health&nbsp;&amp; welfare benefits</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=7 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Raymond Sharpe</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>819,546</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15,101</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(1)</SUP></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>F. Gordon Bitter</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>330,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10,108</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(2)</SUP></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Tarun Amla</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>285,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13,963</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(2)</SUP></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Robert Haskins</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>275,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13,963</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(2)</SUP></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Mathew LaRont</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>265,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13,963</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(2)</SUP></FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

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  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents cost to provide continuation of health and dental benefits to Mr.&nbsp;Sharpe for a period of 18&nbsp;months pursuant to the terms of his employment agreement.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents cost to provide continuation of health and dental benefits to the named executive officer for a period of 12&nbsp;months pursuant to the terms of his
employment
agreement.  </I></FONT></DD></DL>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="du12701_potential_payments_upon_involu__pot04972"> </A>
<A NAME="toc_du12701_9"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON AFTER A CHANGE IN CONTROL    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The table below quantifies the potential payouts to each of the named executive officers upon termination for good reason after a change in control.
The potential payouts assume that (a)&nbsp;the employment agreements were effective as of the last business day of our fiscal 2010 year and (b)&nbsp;a change in control occurred on or before such
date. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="72pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="121pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="84pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="67pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Cash payment</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Restricted unit vesting<SUP>(1)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Option vesting<SUP>(2)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Continuation<BR>
of health&nbsp;&amp;<BR>
welfare<BR>
benefits</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=13 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Raymond Sharpe</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,311,274</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>842,611</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,614,788</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15,101</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(3)</SUP></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>F. Gordon Bitter</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>330,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>358,127</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>430,612</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10,108</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(4)</SUP></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Tarun Amla</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>285,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>352,968</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>350,700</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13,963</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(4)</SUP></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Robert Haskins</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>275,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>308,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>336,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13,963</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(4)</SUP></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Mathew LaRont</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>265,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>308,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>336,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13,963</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(4)</SUP></FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" >


  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> The amounts shown for each named executive officer are calculated by multiplying the number of unvested restricted unit awards for such named executive officer with respect to which
the vesting would accelerate as a result of termination under the circumstances noted by the price of a partnership unit on the last business day of our fiscal 2010 year, which was $0.77. Unvested
restricted unit awards are set forth in the Outstanding Equity Awards at Fiscal Year-End table.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> The amounts shown for each named executive officer are calculated by multiplying the number of in-the-money options with respect to which the vesting would
accelerate as a result of termination under the circumstances noted by the difference between the exercise price and the price of a partnership unit on the last business day of our fiscal 2010 year,
which was $0.77. The number of shares subject to unvested stock options and exercise prices thereof are shown above in the Outstanding Equity Awards at Fiscal Year-End table.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(3)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents cost to provide continuation of health and dental benefits to Mr.&nbsp;Sharpe for a period of 18&nbsp;months pursuant to the terms of his employment
agreement.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(4)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents cost to provide continuation of health and dental benefits to the named executive officer for a period of 12&nbsp;months pursuant to the terms of his
employment
agreement.  </I></FONT></DD></DL>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=1><B>118 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation


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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dw12701_equity_incentive_plans"> </A>
<A NAME="toc_dw12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  EQUITY INCENTIVE PLANS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our 2011 Equity Incentive Plan, or the 2011 Plan, was approved by the board of directors and pre-initial public offering shareholders of
Isola Group&nbsp;Ltd., in&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2011. It is intended to make available incentives that will assist us to attract, retain and motivate
employees, including officers, consultants and
directors. We may provide these incentives through the grant of share options, share appreciation rights, restricted shares, restricted share units, performance shares and units, and other
cash-based or share-based awards. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
total of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares will be initially authorized and reserved for issuance under the 2011 Plan. This reserve will automatically increase on January&nbsp;1, 2012 and
each
subsequent anniversary through 2021, by an amount equal to the smaller of (a)&nbsp;3.0% of the number of ordinary shares issued and outstanding on the immediately preceding December&nbsp;31, or
(b)&nbsp;a lesser amount determined by the board. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Appropriate
adjustments will be made in the number of authorized shares and other numerical limits in the 2011 Plan and in outstanding awards to prevent dilution or enlargement of participants' rights
in the event of a share split or other change in our capital structure. Shares subject to awards which expire or are cancelled or forfeited will again become available for issuance under the 2011
Plan. The shares available will not be reduced by awards settled in cash or by shares withheld to satisfy tax withholding obligations. Only the net number of shares issued upon the exercise of share
appreciation rights or options exercised by means of a net exercise or by tender of previously owned shares will be deducted from the shares available under the 2011 Plan. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
2011 Plan is generally administered by the compensation committee of our board of directors. Subject to the provisions of the 2011 Plan, the committee determines in its discretion the persons to
whom and the times at which awards are granted, the sizes of such awards, and all of their terms and conditions. The compensation committee has the authority to construe and interpret the terms of the
2011 Plan and awards granted under it. The 2011 Plan provides, subject to certain limitations, for indemnification by the Company of any director, officer or employee against all reasonable expenses,
including attorneys' fees, incurred in connection with any legal action arising from such person's action or failure to act in administering the 2011 Plan. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
2011 Plan authorizes the compensation committee, without further shareholder approval, to provide for the cancellation of underwater share options or share appreciation rights in exchange for new
at-the-money options or other equity awards or a cash payment. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Awards
may be granted under the 2011 Plan to our employees, including officers, directors, or consultants or those of any present or future parent or subsidiary corporation or other affiliated entity.
All awards are evidenced by a written agreement between us and the holder of the award and may include any of the following: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><I>Share Options.</I></FONT><FONT SIZE=2> We may grant nonstatutory share options or incentive share options (as described in Section&nbsp;422
of the United Stated Internal Revenue Code), each of which gives its holder the right, during a specified term (not exceeding 10&nbsp;years) and subject to any specified vesting or other conditions,
to purchase a number of ordinary shares at an exercise price per share determined by the administrator, which may not be less than the fair market value of an ordinary share on the date of grant.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><I>Share Appreciation Rights.</I></FONT><FONT SIZE=2> A share appreciation right gives its holder the right, during a specified term (not
exceeding 10&nbsp;years) and subject to any specified vesting or other conditions, to receive the appreciation in the fair market value of our ordinary shares between the date of grant of the award
and the date of its exercise. We may pay the appreciation in ordinary shares or in cash. </FONT></DD></DL>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>119 </B></FONT></P>

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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><I>Restricted Shares.</I></FONT><FONT SIZE=2> The administrator may grant restricted share awards either as a bonus or as a purchase right at
such price as the administrator determines. Restricted shares remain subject to forfeiture until vested, based on such terms and conditions as the administrator specifies. Holders of restricted shares
will have the right to vote the shares and to receive any dividends paid, except that the dividends may be subject to the same vesting conditions as the related shares.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><I>Restricted Share Units.</I></FONT><FONT SIZE=2> Restricted share units represent rights to receive ordinary shares (or their value in cash)
at a future date without payment of a purchase price, subject to vesting or other conditions specified by the administrator. Holders of restricted share units have no voting rights or rights to
receive cash dividends unless and until ordinary shares are issued in settlement of such awards. However, the administrator may grant restricted share units that entitle their holders to dividend
equivalent rights.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><I>Performance Shares and Performance Units.</I></FONT><FONT SIZE=2> Performance shares and performance units are awards that will result in a </FONT> <FONT
SIZE=2><I>payment</I></FONT><FONT SIZE=2> to their holder only if specified performance goals are achieved during a specified performance period. Performance share awards are rights
denominated in ordinary shares, while performance unit awards are rights denominated in currency. The administrator establishes the applicable performance goals based on one or more measures of
business performance enumerated in the 2011 Plan, such as revenue, gross margin, net income or total shareholder return. To the extent earned, performance share and unit awards may be settled in cash
or in ordinary shares. Holders of performance shares or performance units have no voting rights or rights to receive cash dividends unless and until ordinary shares are issued in settlement of such
awards.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2><I>Cash-based Awards and Other Share-based Awards.</I></FONT><FONT SIZE=2> The administrator may grant cash-based awards
that specify a monetary payment or range of payments or other share-based awards that specify a number or range of shares or units that, in either case, are subject to vesting or other conditions
specified by the administrator. </FONT><FONT SIZE=2><I>Settlement</I></FONT><FONT SIZE=2> of these awards may be in cash or ordinary shares, as determined by the administrator. Their holder will have
no voting rights or right to receive cash dividends unless and until our ordinary shares are issued pursuant to the award. The administrator may grant dividend equivalent rights with respect to other
share-based awards. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
the event of a change in control as described in the 2011 Plan, the acquiring or successor entity may assume or continue all or any awards outstanding under the 2011 Plan or substitute
substantially equivalent awards. Any awards that are not assumed or continued in connection with a change in control or are not exercised or settled prior to the change in control will terminate
effective as of the time of the change in control. The compensation committee may provide for the acceleration of vesting of any or all outstanding awards upon such terms and to such extent as it
determines, except that the vesting of all awards held by members of the board of directors who are not employees will automatically be accelerated in full. The 2011 Plan also authorizes the
compensation committee, in its discretion and without the consent of any participant, to cancel each or any outstanding award denominated in shares upon a change in control in exchange for a payment
to the participant with respect to each share subject to the canceled award of an amount equal to the excess of the consideration to be paid per ordinary share in the change in control transaction
over the exercise price per share, if any, under the award. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
2011 Plan will continue in effect until its terminated by the administrator, provided, however, that all awards will be granted, if at all, within 10&nbsp;years of its effective date. The
administrator may amend, suspend or terminate the 2011 Plan at any time, provided that without shareholder approval, the plan cannot be amended to increase the number of shares authorized, change the
class of persons eligible to receive incentive share options or effect any other change that would require shareholder approval under any applicable law or listing rule. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>120 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation


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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
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<A NAME="toc_dw12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  DIRECTOR COMPENSATION    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Historically, other than Jeffrey McCreary, we have not compensated our non-employee directors for their service on our board of
directors. Upon his appointment to our board of directors in 2006, Mr.&nbsp;McCreary received 15,000 fully-vested partnership units. In addition, from January 2006 through September 2010,
Mr.&nbsp;McCreary received an annual cash retainer of $16,000 and received a meeting fee of $4,000 for each board meeting that he attended and, effective October 2010, Mr.&nbsp;McCreary began
receiving an annual cash retainer of $75,000, which is paid in quarterly installments, and stopped receiving a separate meeting fee. In 2011, as part of our efforts to attract and retain additional
highly qualified individuals to our new board of directors, we adopted a director compensation policy that provides for cash and equity compensation to our non-employee directors. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
purpose of our non-employee director compensation policy is to provide a total compensation package that enables us to attract and retain, on a long-term basis, high
caliber directors who are not employees or officers. Under our policy, our non-employee directors who are not associated with our Sponsors are entitled to cash compensation as set forth
below for 2011: </FONT></P>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="77pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Board of directors</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Annual cash<BR>
retainer</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Directors</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>75,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> &nbsp;<BR>  </I></FONT></P>
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<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="77pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Board committees</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Annual cash<BR>
retainer</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>


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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Audit Committee Chairperson</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Compensation Committee Chairperson</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Nominating and Corporate Governance Committee Chairperson</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other Audit, Compensation and Nominating and Corporate Governance Committee Members</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> &nbsp;<BR>  </I></FONT></P>
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<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="77pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Meetings</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Per meeting<BR>
attendance fee</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>


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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Board Meetings</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Board Committee Meetings</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=2>In addition, each unaffiliated non-employee director is also entitled to annual compensation of $25,000 in restricted shares, with the first share
grant effective at the close of market on the day this offering is completed. These awards vest in equal installments on the first three anniversaries of the date of grant provided the director
remains on our board of directors at such time, and are subject to the terms and conditions of our 2011 Equity Incentive Plan. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
also reimburse all non-employee directors for their reasonable out-of-pocket expenses incurred in attending meetings of our board of directors or any committees
thereof. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
do not pay any compensation for serving on our board of directors to any employee directors or any director that is employed by one of our Sponsors. Accordingly, Mr.&nbsp;Sharpe does not receive
additional compensation for his services as a member of our board of directors. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>121 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Executive Compensation


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<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table sets forth a summary of the compensation we paid to our non-employee directors in 2010: </FONT></P>


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NAME="dw12701_non-employee_director_compensation_table_#151;2010"> </A>
<A NAME="toc_dw12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  Non-employee Director Compensation Table&#151;2010    <BR>    </B></FONT></P>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Fees earned or<BR>
paid in cash<SUP>(1)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Option<BR>
awards<SUP>(2)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>All other<BR>
compensation</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
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 </B></FONT><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Kevin Burns</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Donald Colvin</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>H. McIntyre Gardner</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jordon Kruse</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jeffrey McCreary</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>62,750</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>62,750</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Eric Noeth</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cassidy Traub</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Represents the annual retainer earned by the respective director in 2010.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Amount reflects the incremental fair value of options repriced in 2010 calculated in accordance with Financial Accounting Standards Board Accounting Standards
Codification Topic
718-Stock Compensation</I></FONT><FONT SIZE=1>. For a discussion of the assumptions used in the valuations, see Note&nbsp;9 to our consolidated financial statements included elsewhere in
this prospectus. </FONT></DD></DL>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=1><A
NAME="dw12701_director_limitation_of_liabili__dir02642"> </A>
<A NAME="toc_dw12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  DIRECTOR LIMITATION OF LIABILITY AND INDEMNIFICATION ARRANGEMENTS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our articles of association provide for, in the absence of knowing or reckless breach of duty or fraud, the indemnification of our directors and
officers against liabilities, actions, proceedings, claims, damages, costs or expenses incurred by reason of any act or failure to act in the discharge of such directors' or officers' duties. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
have also entered into indemnification agreements with each of our directors. These agreements provide that we will indemnify each of our directors to the fullest extent permitted by the laws of
the Cayman Islands and advance expenses to each indemnitee in connection with any proceeding in which indemnification is available. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
also maintain general liability insurance to provide insurance coverage to our directors and officers for losses arising out of claims based on acts or omissions in their capacities as directors or
officers, including liabilities under the Securities Act of 1933, as amended (the "Securities Act"). Insofar as indemnification for liabilities arising under the Securities Act may be permitted to
directors, officers, or persons controlling the registrant pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>These
provisions may discourage shareholders from bringing a lawsuit against our directors in the future for any breach of their fiduciary duty. These provisions may also have the effect of reducing
the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder's
investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these
provisions, the indemnification agreements and the insurance are necessary to attract and retain talented and experienced directors and officers. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>At
present, there is no pending litigation or proceeding involving any of our directors or officers in which indemnification will be required or permitted. We are not aware of any threatened
litigation or proceeding that might result in a claim for such indemnification. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>122 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="dy12701_principal_shareholders"> </A>
<A NAME="toc_dy12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Principal Shareholders    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prior to this offering, a substantial amount of the investment in Isola is represented by convertible preferred certificates issued
by Isola's current Luxembourg Holding Company to the Sponsor Limited Partnership, which is controlled by our Sponsors. Immediately prior to this offering, we will reorganize as Isola
Group&nbsp;Ltd., a Cayman Islands company, and all of the outstanding securities of the Luxembourg Holding Company, including the common shares and these convertible preferred certificates will be
effectively converted into ordinary shares of Isola Group&nbsp;Ltd., as described in "Concurrent Transactions&#151;Corporate Reorganization" (the "Corporate Reorganization and Conversion"). </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table provides information concerning beneficial ownership of our ordinary shares after giving effect to the Corporate Reorganization and Conversion (1)&nbsp;as of immediately prior to
the consummation of this offering, and (2)&nbsp;as adjusted to reflect the sale of ordinary shares in this offering, by: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>each
shareholder, or group of affiliated shareholders, that owns more than 5% of the outstanding ordinary shares;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>each
of our named executive officers;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>each
of our directors; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>all
of our directors and executive officers as a group. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table lists the number of shares and percentage of shares beneficially owned after giving effect to the Corporate Reorganization and Conversion based on (1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ordinary shares outstanding immediately prior to the consummation of this offering and (2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares outstanding upon the completion of this offering.
</FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Beneficial
ownership is determined in accordance with the rules of the SEC, and generally includes voting power and/or investment power with respect to the securities held. Ordinary shares subject to
options or other awards that are currently exercisable or exercisable within 60&nbsp;days
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011 are deemed outstanding and beneficially owned by the person holding those
options
or other awards for purposes of computing the number of shares and percentage of shares beneficially owned by that person, but are not deemed outstanding for purposes of computing the percentage
beneficially owned by any other person. Except as indicated in the footnotes to this table, and subject to applicable community property laws, the persons or entities named have sole voting and
investment power with respect to all of our ordinary shares shown as beneficially owned by them. </FONT></P>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Ordinary shares beneficially owned </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Percent </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Number</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Before<BR>
offering<SUP>(1)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>After<BR>
offering<SUP>(1)</SUP><SUP>(2)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>5% Shareholders</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TPG Capital Funds<SUP>(3)</SUP><BR>
301 Commerce Street, Suite&nbsp;3300<BR>
Fort Worth, Texas 71602</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>OCM PF Laminates,&nbsp;L.P.<SUP>(5)</SUP><BR>
333 S. Grand Ave., 28th&nbsp;Floor<BR>
Los&nbsp;Angeles, CA90071</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>123 </B></FONT></P>

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<!-- ZEQ.=1,SEQ=128,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=578918,FOLIO='123',FILE='DISK108:[11ZAS1.11ZAS12701]DY12701A.;24',USER='KSEAMON',CD='29-OCT-2011;20:18' -->
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Principal Shareholders </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Ordinary shares beneficially owned </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Percent </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Number</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Before<BR>
offering<SUP>(1)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>After<BR>
offering<SUP>(1)</SUP><SUP>(2)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Directors and Named Executive Officers</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Raymond Sharpe<SUP>(6)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>F. Gordon Bitter<SUP>(7)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tarun Amla<SUP>(8)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Mathew LaRont<SUP>(9)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Robert Haskins<SUP>(10)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Kevin Burns<SUP>(4)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Eric Noeth<SUP>(4)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jordon Kruse<SUP>(5)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cass Traub<SUP>(5)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jeff McCreary<SUP>(11)</SUP></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Donald Colvin</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>McIntyre Gardner</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>All current directors and executive officers as a group (13&nbsp;persons)</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>*</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Denotes beneficial ownership of less than 1%.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Except as otherwise indicated herein, the address for each of the named beneficial owners is c/o Isola Group&nbsp;Ltd. 3100&nbsp;W.&nbsp;Ray Road, Suite&nbsp;301,
Chandler,
Arizona 85226.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(2)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Assumes that the underwriters' option to purchase additional shares has not been exercised.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(3)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares of the Company held by TPG Partners&nbsp;IV-AIV,&nbsp;L.P., a
Cayman Islands exempted limited partnership
("Partners&nbsp;IV"), and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares of the Company held by T<SUP>3</SUP> Hattrick&nbsp;II,&nbsp;L.P., a Cayman Islands exempted limited partnership ("Hattrick&nbsp;II"
and, together with Partners&nbsp;IV, the "TPG Funds") (such shares, collectively, the "TPG Shares"). The general partner of Partners&nbsp;IV is TPG GenPar&nbsp;IV-AIV,&nbsp;L.P., a
Cayman Islands exempted limited partnership, whose general partner is TPG GenPar IV-AIV Advisors,&nbsp;Inc., a Cayman Islands exempted company, whose sole shareholder is TPG
Holdings&nbsp;I,&nbsp;L.P., a Delaware limited partnership, whose general partner is TPG Holdings&nbsp;I-A,&nbsp;LLC, a Delaware limited liability company, whose sole member is TPG
Group Holdings (SBS),&nbsp;L.P., a Delaware limited partnership, whose general partner is TPG Group Holdings (SBS) Advisors,&nbsp;Inc. ("Group Advisors"). The general partner of Hattrick&nbsp;II
is T<SUP>3</SUP> GenPar&nbsp;II-AIV,&nbsp;L.P., a Cayman Islands exempted limited partnership, whose general partner is T<SUP>3</SUP>
Advisors&nbsp;II-AIV&nbsp;Inc., a Cayman Islands exempted company ("Advisors&nbsp;II"). David Bonderman and James&nbsp;G. Coulter are directors, officers and sole shareholders of
Group Advisors and Advisors&nbsp;II. Messrs.&nbsp;Bonderman and Coulter may be deemed to have investment power and beneficial ownership with respect to the TPG Shares. The address of each of
Messrs.&nbsp;Bonderman and Coulter is c/o TPG Capital,&nbsp;L.P., 301&nbsp;Commerce Street, Suite&nbsp;3300, Fort Worth, TX&nbsp;76102. <BR>  </I></FONT>
<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><I> In connection with the Corporate Restructuring and Conversion described above, immediately prior to the commencement of the offering, (1)&nbsp;TPG Hattrick&nbsp;IV,&nbsp;LLC was liquidated and
the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares of the Company that it held were contributed to Partners&nbsp;IV and (2)&nbsp;T<SUP>3</SUP> Hattrick&nbsp;II,&nbsp;LLC was liquidated and the
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares of the Company that it held were contributed to Hattrick&nbsp;II.  </I></FONT></P>

</DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(4)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Kevin Burns and Eric Noeth were appointed to the board of directors by TPG Capital, which is an affiliate of each of the TPG Funds. Mr.&nbsp;Burns is a Partner of TPG Capital, and
Mr.&nbsp;Noeth is an Associate at TPG Capital. Neither Mr.&nbsp;Burns nor Mr.&nbsp;Noeth has voting or investment power over, and each disclaims beneficial ownership of, the securities held by
the TPG Funds. The address of each of Messrs.&nbsp;Burns and Noeth is c/o TPG Capital,&nbsp;L.P., 301&nbsp;Commerce Street, Suite&nbsp;3300, Fort Worth, TX&nbsp;76102.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(5)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares held directly by OCM&nbsp;PF Laminates,&nbsp;L.P.,
Howard&nbsp;S. Marks, Bruce&nbsp;A. Karsh, Sheldon&nbsp;M. Stone, Larry&nbsp;W.
Keele, Stephen&nbsp;A. Kaplan, John&nbsp;B. Frank, David&nbsp;M. Kirchheimer and Kevin&nbsp;L. Clayton, whom we refer to collectively as the "Oaktree Management Group" because they are members
of the executive committee of Oaktree Capital Group Holdings&nbsp;GP,&nbsp;LLC. Oaktree Capital Group Holdings&nbsp;GP,&nbsp;LLC is the general partner of Oaktree Capital Group
Holdings,&nbsp;L.P. Oaktree Capital Group Holdings,&nbsp;L.P. is the holder of the majority of the voting units of Oaktree Capital Group,&nbsp;LLC. Oaktree Capital Group,&nbsp;LLC is the
managing member of Oaktree Holdings,&nbsp;LLC. Oaktree Holdings,&nbsp;LLC is the managing member of  </I></FONT></DD></DL>
 </DIV>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Principal Shareholders </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><I> OCM Holdings&nbsp;I,&nbsp;LLC. OCM Holdings&nbsp;I,&nbsp;LLC is the general partner of Oaktree Capital&nbsp;I,&nbsp;L.P. Oaktree Capital&nbsp;I,&nbsp;L.P. is the general partner of
Oaktree Fund&nbsp;GP&nbsp;I,&nbsp;L.P. Oaktree Fund&nbsp;GP&nbsp;I,&nbsp;L.P. is the managing member of Oaktree Fund&nbsp;GP,&nbsp;LLC. Oaktree Fund&nbsp;GP,&nbsp;LLC is the
general partner of OCM PF Laminates,&nbsp;L.P. As such, each such entity and each member of the Oaktree Management Group may be deemed to have voting and dispositive power over the ordinary shares
held by OCM PF Laminates,&nbsp;L.P. Each such entity and each member of the Oaktree Management Group disclaims beneficial ownership of the ordinary shares of the Company except to the extent of any
pecuniary interest therein. <BR>
<BR>
Each entity listed herein whose shares are beneficially owned by the Oaktree Management Group has a principal business address of: c/o Oaktree Capital Management, 333&nbsp;S. Grand Avenue,
Los&nbsp;Angeles, California 90071.  </I></FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(6)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(7)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares that may be acquired upon the exercise of options exercisable within 60&nbsp;days
after&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2011.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(8)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I>
Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares that may be acquired upon the exercise of options exercisable within 60&nbsp;days
after&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2011.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(9)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares that may be acquired upon the exercise of options exercisable within 60&nbsp;days
after&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2011.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(10)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I>
Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(11)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I>
Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares.  </I></FONT></DD></DL>
 </DIV>
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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_certain_relationships_and_related_party_transactions"> </A>
<A NAME="toc_ea12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Certain Relationships and Related Party Transactions    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Since January&nbsp;1, 2008, there has not been any transaction, nor is there any proposed transaction to which we were or will be a
party in which the amount involved exceeded or will exceed $120,000 and in which any director, executive officer, holder of more than 5% of any class of our voting securities, or any member of the
immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than (i)&nbsp;as set forth below or (ii)&nbsp;the compensation, employment and other
agreements and transactions, which are described in "Management" and "Executive Compensation" elsewhere in this prospectus. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_agreements_with_our_sponsors"> </A>
<A NAME="toc_ea12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  AGREEMENTS WITH OUR SPONSORS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_tpg_capital_management_agreement"> </A>
<A NAME="toc_ea12701_3"> </A></FONT> <FONT SIZE=2><B>  TPG Capital Management Agreement    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In January&nbsp;2005, we entered into a management agreement with TPG Capital, pursuant to which TPG Capital provides financial, advisory and
consulting services to us (the "TPG Capital Management Agreement"). These services include executive and management services; the design of our equity capital structure and assistance with analysis of
our structure for tax purposes; identification, support and analysis of acquisitions and dispositions; support and analysis of
financing alternatives; finance functions, including assistance in the preparation of financial projections, and monitoring of compliance with financing agreements; and various human resource
functions, including the identification and hiring of directors and executive officers. There are no minimum levels of service required to be provided pursuant to the TPG Capital Management Agreement. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
TPG Capital Management Agreement also includes customary indemnification provisions in favor of TPG Capital, and customary limitations of TPG Capital's liability for services rendered under the
TPG Capital Management Agreement provided TPG Capital is not grossly negligent or engages in willful misconduct. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Pursuant
to the TPG Capital Management Agreement we are required to pay TPG Capital an aggregate annual monitoring fee of $2.0&nbsp;million, plus reasonable out-of-pocket
expenses of up to $50,000 per year. These fees and expenses are payable on a quarterly basis. We accrued approximately $2.1&nbsp;million of fees and expenses in each of 2008, 2009, and 2010, all of
which were paid in full by 2011, and accrued approximately $1.0&nbsp;million of fees and expenses in the six months ended July&nbsp;2, 2011. Concurrently with the closing of this offering, the TPG
Capital Management Agreement will be terminated, provided that we will remain obligated to pay TPG Capital an $8&nbsp;million transaction fee plus approximately $1.0&nbsp;million in accrued
management fees and related expenses through such date. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_insulectro_distributor_agreeme__ins03048"> </A>
<A NAME="toc_ea12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  Insulectro Distributor Agreement and Redfern Partners,&nbsp;LLC Option Agreement    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On June&nbsp;1, 2004, we entered into an exclusive distributor agreement with Insulectro, a privately held company based in California. Insulectro
is owned, controlled and managed by Timothy and Donald Redfern, who are affiliated with Redfern Partners,&nbsp;LLC, one of our Sponsors. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Pursuant
to this distributor agreement, Insulectro serves as our exclusive distributor across the United States and British Columbia, serving PCB fabricators in these regions. Under the distributor
agreement, we reserve the right to provide direct sales coverage to certain customers, and may provide direct sales coverage to other customers serviced by Insulectro, provided that we give
60&nbsp;days notice to Insulectro and pay a commission to Insulectro to compensate Insulectro for lost sales to such customers. Such commission decreases by 50% after 30&nbsp;days and ceases
entirely after 60&nbsp;days. We are required to allocate capacity for Insulectro up to Insulectro's weekly purchase volume for the last three months or based on Insulectro's monthly forecast volume,
whichever is less. Increases over capacity allocation will be jointly agreed upon by </FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Certain Relationships and Related Party Transactions </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>the
parties. We may set and change prices by giving Insulectro 40&nbsp;days prior notice. In certain situations, such as when new territories arise, we are required to invite all interested
potential distributors to present proposals and evaluate such proposals on criteria that shall be shared with all interested parties prior to review of such proposals. The current term of the
distributor agreement ends in June&nbsp;2014. Either party may terminate the agreement if the other party is in uncured material breach upon 90&nbsp;days prior written notice. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Insulectro
was the Company's sixth largest customer for the six months ended July&nbsp;2, 2011, and the fifth largest customer for fiscal 2010, 2009 and 2008. Receivables from Insulectro totaled
$4.3&nbsp;million as of July&nbsp;2, 2011, $4.4&nbsp;million as of January&nbsp;1, 2011, $4.1&nbsp;million as of December&nbsp;26, 2009, and $5.2&nbsp;million as of December&nbsp;27,
2008. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Also
on June&nbsp;1, 2004, the Sponsor Holding Company granted Redfern Partners,&nbsp;LLC an option to purchase 1,500,000 units of the Sponsor Holding Company at an exercise price equal to the
U.S. dollar equivalent of &euro;2 per unit using the spot price for the euro at the close of business for the Federal Reserve Bank of New York on May&nbsp;31, 2004 (the "Original
Option"). In connection with the liquidation of the Sponsor Holding Company as part of the corporate reorganization occurring concurrently with this offering, the Original Option will be terminated
and substituted with a fully-vested option to purchase&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares at an exercise price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_sponsor_limited_partnership_notes"> </A>
<A NAME="toc_ea12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  Sponsor Limited Partnership Notes    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As of December&nbsp;29, 2007, we had two notes receivable due from and three notes payable due to the Sponsor Limited Partnership for funds
associated with the purchase of the Company. The notes receivable totaled $7.5&nbsp;million and the notes payable amounted to $5.4&nbsp;million as of December&nbsp;27, 2008. All of the notes
bore interest at a rate of the annual average of the six-month EURIBOR plus 5% (9.7% as of December&nbsp;27, 2008). On December&nbsp;27, 2008, we entered into an arrangement to net the
five notes together, which resulted in an amount due from the Sponsor Limited Partner of $2.3&nbsp;million. The note receivable was due on May&nbsp;31, 2009 and bore an
interest rate of the annual average of the six-month EURIBOR plus 5%. The note receivable was paid in full to us by the Sponsor Limited Partnership on May&nbsp;29, 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_loan_agreement_and_private_placements_of_securities"> </A>
<A NAME="toc_ea12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  Loan Agreement and Private Placements of Securities    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On September&nbsp;30, 2010, we entered into a senior secured credit agreement and a mezzanine credit agreement with various lenders, including
certain of the Sponsors, and issued voting and non-voting units of the Sponsor Holding Company to certain of the Sponsors. For a description of the senior secured credit agreement and
mezzanine credit agreement, and equity interests issued to the Sponsors, see "Management's Discussion and Analysis&#151;Liquidity and Capital Resources". In addition, proceeds from this
offering will be used to partially retire amounts outstanding under the senior secured credit agreement and mezzanine credit agreement. For more information, see "Use of Proceeds". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As
of the end of fiscal 2010 and July&nbsp;2, 2011, we had not made any principal payments under either the senior secured credit agreement or the mezzanine credit agreement. As of the end of fiscal
2010, we had made interest payments totaling $5.4&nbsp;million under the senior secured credit agreement and $3.5&nbsp;million under the mezzanine credit agreement. For the six months ended
July&nbsp;2, 2011, we had made interest payments totaling $10.6&nbsp;million under the senior secured credit agreement and $7.2&nbsp;million under the mezzanine credit agreement. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_shareholders_and_registration_rights_agreement"> </A>
<A NAME="toc_ea12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  Shareholders and Registration Rights Agreement    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We and certain of our Sponsors and shareholders will become parties to a shareholders and registration rights agreement that will become effective
shortly before this offering. The shareholders and registration rights agreement covers matters of corporate governance and registration rights. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>127 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Certain Relationships and Related Party Transactions </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Corporate Governance  </I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The shareholders and registration rights agreement provides that so long as they hold at least 20% of our outstanding voting securities, each of TPG
Capital and Oaktree may nominate two members of our board of directors; so long as they hold at least 10% of our outstanding voting securities, each of TPG Capital and Oaktree may nominate one member
of our board of directors; and the parties to the shareholders and registration rights agreement will vote their ordinary shares to elect the persons so nominated to our board of directors.
Messrs.&nbsp;Burns and Noeth were nominated by TPG Capital and Messrs.&nbsp;Kruse and Traub were nominated by Oaktree. The shareholders and registration rights agreement also provides that our
board of directors shall consist of eight members including, in addition to the TPG Capital and Oaktree nominees, our CEO and three nominees who are not affiliated with TPG Capital or Oaktree and who
meet the independence requirements of the Exchange Act and the national securities exchange on which our ordinary shares are listed. The number of independent directors shall be increased accordingly
should there by a reduction in the number of nominees TPG Capital or Oaktree are entitled to pursuant to the shareholders and registration rights agreement. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Registration Rights  </I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Subject to the terms and conditions of the shareholders and registration rights agreement, TPG Capital and Oaktree will have the right to request two
long-form demand registrations, arising after the expiration of a 180-day lock-up period but prior to the time when the Company becomes eligible to use a
registration statement on Form&nbsp;S-3, and two additional demand registrations on Form&nbsp;S-3 once the Company becomes eligible to use a registration statement on
Form&nbsp;S-3. The other shareholders party to the shareholders and registration rights agreement may elect to participate in such registrations. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition to our obligations with respect to demand registrations, if we propose to register any of our securities, other than a registration on Form&nbsp;S-8 or S-4 or
successor forms, for our own account, the parties to the shareholders and registration rights agreement, including TPG Capital and Oaktree, will have the opportunity to participate in such
registrations. Expenses relating to these "incidental registrations" are required to be paid by us. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>If
an incidental registration is underwritten and the managing underwriter advises us that the number of securities offered to the public needs to be reduced, priority of inclusion shall be such that
first priority shall be given to us, second priority shall be given to the shareholders party to the shareholders and registration rights agreement who elect to participate in such registration, and
third priority shall be given to all other of our ordinary shares requested to be sold by such shareholders. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_corporate_reorganization"> </A>
<A NAME="toc_ea12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  Corporate Reorganization    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prior to the completion of this offering, we intend to undertake a corporate restructuring that will create a new holding company in the Cayman
Islands that will wholly own our current Luxembourg Holding Company, and therefore indirectly own the various subsidiaries of the Isola Group. In connection with this corporate restructuring, both the
Sponsor Limited Partnership and the Sponsor Holding Company will be liquidated. This will result in each of the Sponsors separately owning a number of our Cayman ordinary shares equivalent to their
pro rata investments in Isola. Please see "Concurrent Transactions&#151;Corporate Reorganization" for more information on our corporate restructuring. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>128 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Certain Relationships and Related Party Transactions </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_transactions_with_executive_officers_and_directors"> </A>
<A NAME="toc_ea12701_9"> </A>
<BR></FONT><FONT SIZE=2><B>  TRANSACTIONS WITH EXECUTIVE OFFICERS AND DIRECTORS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_equity_interests_in_the_sponso__equ03344"> </A>
<A NAME="toc_ea12701_10"> </A></FONT> <FONT SIZE=2><B>  Equity Interests in the Sponsor Holding Company and Sponsor Limited Partnership    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Please see "Executive Compensation&#151;Compensation Discussion and Analysis" and "Prospectus Summary&#151;Concurrent Transactions" for
information on equity interests held by current and former members of management. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_indemnification_arrangements"> </A>
<A NAME="toc_ea12701_11"> </A>
<BR></FONT><FONT SIZE=2><B>  Indemnification Arrangements    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Please see "Executive Compensation&#151;Director Limitation of Liability and Indemnification Arrangements" for information on our
indemnification arrangements with our directors. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_executive_compensation_and_employment_arrangements"> </A>
<A NAME="toc_ea12701_12"> </A>
<BR></FONT><FONT SIZE=2><B>  Executive Compensation and Employment Arrangements    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Please see "Executive Compensation&#151;Outstanding Equity Awards as of December&nbsp;31, 2010" and "Executive
Compensation&#151;Employment Agreements and Change in Control Agreements" for information on compensation arrangements with our executive officers, including option grants and agreements with
executive officers. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ea12701_policies_and_procedure__ea102260"> </A>
<A NAME="toc_ea12701_13"> </A>
<BR></FONT><FONT SIZE=2><B>  POLICIES AND PROCEDURES FOR RELATED PARTY TRANSACTIONS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As provided by our Audit Committee charter to be effective upon completion of this offering, our Audit Committee will be responsible for reviewing
and approving related party transactions, after reviewing each such transaction for potential conflicts of interests and other improprieties. We do not currently have a written policy for the review
and approval of transactions with related parties. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>129 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ec12701_shares_eligible_for_future_sale"> </A>
<A NAME="toc_ec12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Shares Eligible for Future Sale    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prior to this offering, there has been no public market for our ordinary shares. Based on the number of shares outstanding at
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011, upon completion of this offering, we will have an aggregate
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million ordinary shares outstanding on a fully-diluted basis. All of the shares
that we
sell in this offering will be freely tradable without restriction or further registration under the Securities Act, except that any shares purchased by our affiliates, as that term is defined in
Rule&nbsp;144, may generally only be sold in compliance with the limitations of Rule&nbsp;144, which is summarized below. The
remaining&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million of our ordinary shares that
are outstanding after this offering, or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our ordinary shares, assuming the underwriters exercise their option to purchase additional shares in full, will be restricted shares under
the terms of the Securities Act. All of these shares are subject to lock-up agreements as described in "Underwriting". Restricted shares may be sold in the public market only if registered
or if they qualify for an exemption from registration under Rule&nbsp;144 promulgated under the Securities Act, which rules are summarized below. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ec12701_sales_of_restricted_securities"> </A>
<A NAME="toc_ec12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  SALES OF RESTRICTED SECURITIES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In general, under Rule&nbsp;144 as currently in effect on the date of this prospectus, persons who became the beneficial owner of our ordinary
shares prior to the completion of this offering may not sell their shares until the earlier of (i)&nbsp;the expiration of a six-month holding period, if we have been subject to the
reporting requirements of the Exchange Act and have filed all required reports for at least 90&nbsp;days prior to the date of the sale; or (ii)&nbsp;a one-year holding period. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>If
the six-month holding period applies, then at its expiration, a person who was not one of our affiliates at any time during the three months preceding a sale would be entitled to sell
an
unlimited number of our ordinary shares provided current public information about us is available, and a person who was one of our affiliates at any time during the three months preceding a sale would
be entitled to sell within any three-month period only a number of ordinary shares that does not exceed the greater of either of the following: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>1%
of the number of our ordinary shares then outstanding, which will equal
approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares immediately after this offering, based on the number
of our ordinary shares outstanding as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
average weekly trading volume of our ordinary shares on the Nasdaq Global Market during the four calendar weeks preceding the filing of a notice on
Form&nbsp;144 with respect to the sale. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>If
the one-year holding period applies, then at its expiration, a person who was not one of our affiliates at any time during the three months preceding a sale would be entitled to sell an
unlimited number of our ordinary shares without restriction. A person who was one of our affiliates at any time during the three months preceding a sale would remain subject to the volume restrictions
described above. Sales under Rule&nbsp;144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and
to the availability of current public information about us. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ec12701_effects_of_sales_of_shares"> </A>
<A NAME="toc_ec12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  EFFECTS OF SALES OF SHARES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>No predictions can be made as to the effect, if any, that sales of our ordinary shares from time to time, or the availability of our ordinary shares
for future sale, may have on the market price for our ordinary shares. Sales of substantial amounts of ordinary shares, or the perception that such sales could occur, could adversely affect prevailing
market prices for our ordinary shares and could impair our future ability to obtain capital through an offering of equity securities. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>130 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Shares Eligible for Future Sale </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ec12701_registration_rights"> </A>
<A NAME="toc_ec12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  REGISTRATION RIGHTS    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Upon the closing of this offering, the Sponsors and their affiliates, which will indirectly hold an aggregate
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of our ordinary
shares, will have the right to require us to register their shares under the Securities Act under specified circumstances. After registration and sale pursuant to these rights, these shares will
become freely tradable without restriction under the Securities Act. Please see "Certain Relationships and Related Party Transactions&#151;Shareholders and Registration Rights Agreement" for
additional information regarding these registration rights. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>131 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ee12701_description_of_share_capital"> </A>
<A NAME="toc_ee12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Description of Share Capital    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As of the date of this offering, our authorized share capital will consist of 100,000,000 ordinary shares, par value $0.0001 per
share, and 25,000,000 undesignated preferred shares, par value $0.0001 per share. As of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2011,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares were issued and outstanding and no shares of undesignated
preferred shares were outstanding. An additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares may be issued upon
exercise of options under our stock option plan. The following summary description relating to our
share capital does not purport to be complete and is qualified in its entirety by our memorandum and articles of association, copies of which are available as set forth in the section captioned "Where
You Can Find More Information". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ee12701_ordinary_shares"> </A>
<A NAME="toc_ee12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  ORDINARY SHARES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Holders of ordinary shares are entitled to cast one vote for each share on all matters submitted to a vote of shareholders, including the election of
directors. The holders of ordinary shares are entitled to receive ratably such dividends, if any, as may be declared by our directors out of funds legally available therefor. We have not in the past
paid and do not expect for the foreseeable future to pay, dividends on our ordinary shares. Instead, we anticipate that all of our earnings, if any, in the foreseeable future will be used for working
capital and other general corporate purposes. Any future determination to pay dividends will be at the discretion of our board of directors and will depend upon, among other factors, our results of
operations, financial condition, capital requirements and contractual restrictions. Such holders do not have any preemptive or other rights to subscribe for additional shares. All holders of ordinary
shares are entitled to share ratably in any assets for distribution to shareholders upon our liquidation, dissolution or winding up. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>There
are no conversion, redemption or sinking fund provisions applicable to the ordinary shares. All outstanding ordinary shares are fully paid and nonassessable. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ee12701_preferred_shares"> </A>
<A NAME="toc_ee12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  PREFERRED SHARES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Pursuant to our articles of association to be in effect upon the completion of this offering, our board of directors will be authorized, without any
action by our shareholders, to designate and issue preferred shares in one or more series and to designate the powers, preferences and rights of each series, which may be greater than the rights of
our ordinary shares. It is not possible to state the actual effect of the issuance of any shares of preferred shares upon the rights of holders of our ordinary shares until the board of directors
determines the specific rights of the holders of such preferred shares. However, the effects might include, among other things: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>impairing
dividend rights of our ordinary shares;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>diluting
the voting power of our ordinary shares;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>impairing
the liquidation rights of our ordinary shares; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>delaying
or preventing a change of control of us without further action by our shareholders. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Upon
the completion of this offering, no shares of our preferred shares will be outstanding, and we have no present plan to issue any of our preferred shares following this offering. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ee12701_limitations_on_the_right_to_own_or_vote_shares"> </A>
<A NAME="toc_ee12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  LIMITATIONS ON THE RIGHT TO OWN OR VOTE SHARES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As a Cayman Islands company, we may not hold our own shares as a shareholder, save for shares that are acquired and held as treasury shares. We may
not exercise any voting or other rights in respect of treasury shares nor may any dividend be declared or paid or other distribution be made in respect of treasury shares. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>132 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Description of Share Capital </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>However,
bonus shares may be issued in respect of treasury shares although they will, in turn, be treated as treasury shares. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ee12701_limitations_on_transfer_of_shares"> </A>
<A NAME="toc_ee12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  LIMITATIONS ON TRANSFER OF SHARES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our articles of association give our directors, at their discretion, the right to decline to register any transfers of shares that are not fully
paid-up shares. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ee12701_disclosure_of_shareholder_ownership"> </A>
<A NAME="toc_ee12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  DISCLOSURE OF SHAREHOLDER OWNERSHIP    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>There are no provisions in our memorandum of association or articles of association governing the ownership threshold above which shareholder
ownership must be disclosed by any shareholder. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ee12701_changes_in_share_capital"> </A>
<A NAME="toc_ee12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  CHANGES IN SHARE CAPITAL    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We may, from time to time, by ordinary resolution passed by a majority of the votes cast by shareholders present at a shareholder meeting entitled to
vote on such resolution, or passed by a written consent of shareholders holding not less than a majority of our shares outstanding for so long as we are a controlled company, increase our share
capital by such sum, to be allocated among shares of such par value, as the resolution shall prescribe. The new shares shall be subject to the same provisions with reference to the payment of calls,
liens, transfers, transmissions, forfeitures and otherwise as the shares in the original share capital. We may by ordinary resolution passed at a shareholder meeting by a majority of the votes cast by
shareholders present at such meeting and entitled to vote on such resolution, or passed by a written consent of shareholders holding not less than a majority of our shares outstanding for so long as
we are a controlled company: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>consolidate
our share capital into shares of larger par value than our existing shares;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>sub-divide
our share capital into shares of smaller par value;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>divide
our shares into multiple classes; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>cancel
any shares which, at the date of the passing of the resolution, have not been issued and diminish the amount of the shares so cancelled. </FONT></DD></DL>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
may by special resolution passed by at least two-thirds of the votes cast by shareholders present at a shareholder meeting and entitled to vote on such resolution, or passed by a
unanimous written consent of such persons, reduce our share capital or any capital redemption reserve fund or other undistributable reserve in any manner authorized by law. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>133 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Description of Share Capital  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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NAME="eg12701_differences_in_corporate_law"> </A>
<A NAME="toc_eg12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  DIFFERENCES IN CORPORATE LAW    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Cayman Islands Companies Law is modeled after the corporate legislation of the United Kingdom but does not follow recent United Kingdom statutory
enactments, and differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies
Law applicable to us and the laws applicable to companies incorporated in the United States (particularly Delaware) and their shareholders. </FONT></P>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="33%" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Delaware </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cayman Islands </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Title of Organizational<BR>
Documents</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
Certificate of incorporation<BR>
Bylaws</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
Memorandum of association<BR>
Articles of association</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Duties of Directors</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Under Delaware law, the business and affairs of a corporation are managed by or under the direction of its board of directors. In
exercising their powers, directors are charged with a fiduciary duty of care to protect the interests of the corporation and a fiduciary duty of loyalty to act in the best interests of its shareholders. The duty of care requires that directors act in
an informed and deliberative manner and inform themselves, prior to making a business decision, of all material information reasonably available to them. The duty of care also requires that directors exercise care in overseeing and investigating the
conduct of the corporation's employees. The duty of loyalty may be summarized as the duty to act in good faith, not out of self-interest, and in a manner which the director reasonably believes to be in the best interests of the
shareholders.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>As a matter of Cayman Islands law, directors of Cayman Islands companies owe a fiduciary duty to the their respective companies
to act in good faith in their dealings with or on behalf of the company and exercise their powers and fulfill the duties of their office honestly. This duty has four essential elements:<BR>
<BR>
--&gt;a duty to act in good faith in the best interests of the company;<BR>
<BR>
--&gt;a duty not to personally profit from opportunities that arise from the office of director;<BR>
<BR>
--&gt;a duty to avoid conflicts of interest; and<BR>
<BR>
--&gt;a duty to exercise powers for the purpose for which such powers were intended.<BR>
<BR>
A director of a Cayman Islands company also owes the company a duty to act with skill and care. A director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her
knowledge and experience.</FONT></TD>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Description of Share Capital </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Delaware </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cayman Islands </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Limitations on Personal<BR>
Liability of Directors</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
Subject to the limitations described below, a certificate of incorporation may provide for the elimination or limitation of the personal liability of a director to the corporation or its shareholders for monetary damages for a breach of fiduciary
duty as a director.<BR>
<BR>
Such provision cannot limit liability for breach of loyalty, bad faith, intentional misconduct, unlawful payment of dividends or unlawful share purchase or redemption. In addition, the certificate of incorporation cannot limit liability for any act
or omission occurring prior to the date when such provision becomes effective.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
The Companies Law of the Cayman Islands has no equivalent provision to Delaware law regarding the limitation of director's liability. However, as a matter of public policy, Cayman Islands law will not allow the limitation of a director's liability to
the extent that the liability is a consequence of the director committing a crime or of the director's own fraud or dishonesty.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Indemnification of<BR>
Directors, Officers, Agents, and Others</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
<BR>
A corporation has the power to indemnify any director, officer, employee, or agent of corporation who was, is, or is threatened to be made a party who acted in good faith and in a manner he believed to be in the best interests of the corporation, and
if with respect to a criminal proceeding, had no reasonable cause to believe his conduct would be unlawful, against amounts actually and reasonably incurred.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
<BR>
Cayman Islands law does not limit the extent to which a company's articles of association may provide for indemnification of directors and officers, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to
public policy, such as to provide indemnification against the consequences of committing a crime, or against the indemnified person's own fraud or dishonesty.</FONT></TD>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Description of Share Capital </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Delaware </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cayman Islands </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Interested Directors</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Under Delaware law, a transaction in which a director who has an interest in such transaction would not be voidable if (1)&nbsp;the material
facts as to such interested director's relationship or interests are disclosed or are known to the board of directors and the board in good faith authorizes the transaction by the affirmative vote of a majority of the disinterested directors, even
though the disinterested directors are less than a quorum, (2)&nbsp;such material facts are disclosed or are known to the shareholders entitled to vote on such transaction and the transaction is specifically approved in good faith by vote of the
shareholders, or (3)&nbsp;the transaction is fair as to the corporation as of the time it is authorized, approved or ratified. Under Delaware law, a director could be held liable for any transaction in which such director derived an improper personal
benefit.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Our articles of association contain provisions that permit a director to vote on a transaction in which he or she is interested provided he or
she discloses such interest to the board of directors. As under Delaware law, a director could be held liable for any transaction in which such director derived an improper personal benefit.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Voting Requirements</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>The certificate of incorporation may include a provision requiring supermajority approval by the directors or shareholders for
any corporate action.<BR>
<BR>
In addition, under Delaware law, certain business combinations involving interested shareholders require approval by a supermajority of the non-interested shareholders.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>For the protection of shareholders, certain matters must be approved by special resolution of the shareholders, including
alteration of the memorandum or articles of association, appointment of inspectors to examine company affairs, reduction of share capital, change of name, authorization of a plan of merger or consolidation or voluntary winding up the
company.</FONT></TD>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Description of Share Capital </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Delaware </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cayman Islands </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>The Companies Law of the Cayman Islands requires that a special resolution be passed by a majority of two-thirds (66.66%) or such higher majority
as set forth in the articles of association, of shareholders voting at a general meeting, or by unanimous written consent of shareholders.<BR>
<BR>
Under our articles of association, certain business combinations involving interested shareholders require approval by a supermajority of the non-interested shareholders.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Voting for Directors</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Under Delaware law, unless otherwise specified in the certificate of incorporation or bylaws of the corporation, directors shall
be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>The Companies Law of the Cayman Islands defines "special resolutions" only. A company's articles of association can therefore
tailor the definition of "ordinary resolutions" as a whole, or with respect to specific provisions. Our articles of association provide that with respect to the election of directors, an ordinary resolution shall be passed by a plurality
vote.</FONT></TD>
</TR>
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<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Cumulative Voting</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>No cumulative voting for the election of directors unless so provided in the certificate of incorporation.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>No cumulative voting for the election of directors unless so provided in the articles of association.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Directors' Powers<BR>
Regarding Bylaws</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
The certificate of incorporation may grant the directors the power to adopt, amend or repeal bylaws.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
The memorandum and articles of association may only be amended by a special resolution of the shareholders.</FONT></TD>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Description of Share Capital </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="33%" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Delaware </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cayman Islands </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Nomination and Removal of Directors and Filling Vacancies on Board</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
<BR>
Shareholders may generally nominate directors if they comply with advance notice provisions and other procedural requirements in company bylaws. Holders of a majority of the shares may remove a director with or without cause, except in certain cases
involving a classified board or if the company uses cumulative voting. Unless otherwise provided for in the certificate of incorporation, directorship vacancies are filled by a majority of the directors elected or then in office.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
<BR>
Nomination and removal of directors and filling of board vacancies are governed by the terms of the articles of association. Our articles of association provide that only shareholders that beneficially own more than 15% of our outstanding ordinary
shares (unless the Exchange Act and proxy rules provide otherwise) and comply with our advance notice provisions may nominate directors. Our articles of association also provide that shareholders may only remove directors for cause and with a
supermajority of two-thirds. This right to remove directors may not be used to remove directors nominated by our Principal Sponsors. Under our articles of association, vacancies on the board are generally filled by the vote of a majority of the
directors elected or then in office, subject to the rights of our Principal Sponsors.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Mergers and Similar<BR>
Arrangements</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
Under Delaware law, with certain exceptions, a merger, consolidation, exchange or sale of all or substantially all the assets of a corporation must be approved by the board of directors and a majority of the outstanding shares entitled to vote
thereon. Under Delaware law, a shareholder of a corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which such shareholder may receive cash in the amount of
the fair value of the shares held by such shareholder (as determined by a court) in lieu of the consideration such shareholder would otherwise receive in the transaction.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
Cayman Islands companies law has recently been amended to simplify mergers and consolidations where two or more companies are being formed into a single entity. The new legislation makes a distinction between a "consolidation" and a "merger". In a
consolidation, a new entity is formed from the combination of each participating company, and the separate consolidating parties, as a consequence, cease to exist and are each stricken by the Registrar of Companies. In a merger, one company remains
as the surviving entity, having in effect absorbed the other merging parties that are then stricken and cease to exist.</FONT></TD>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Description of Share Capital </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Delaware </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cayman Islands </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Delaware law also provides that a parent corporation, by resolution of its board of directors, may merge with any subsidiary, of
which it owns at least 90% of each class of capital stock without a vote by shareholders of such subsidiary. Upon any such merger, dissenting shareholders of the subsidiary would have appraisal rights.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Two or more Cayman-registered companies may merge or consolidate. Cayman-registered companies may also merge or consolidate with
foreign companies provided that the laws of the foreign jurisdiction permit such merger or consolidation.<BR>
<BR>
Under the new rules, a plan of merger or consolidation shall be authorised by each constituent company by way of (a)&nbsp;a special resolution of the members of each such constituent company; and (b)&nbsp;such other authorisation, if any, as may be
specified in such constituent company's articles of association.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shareholder approval is not required where a parent company registered in the Cayman Islands seeks to merge with one or more of
its subsidiaries registered in the Cayman Islands ("vertical amalgamation") and a copy of the plan of merger is given to every member of each subsidiary company to be merged unless that member agrees otherwise.</FONT></TD>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Description of Share Capital </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Delaware </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cayman Islands </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Creditors must be asked approve the merger although application can be made to the Grand Court of the Cayman Islands to proceed
notwithstanding a dissenting creditor. Where a foreign company wishes to combine with a Cayman company, consent or approval to the transfer of any security interest granted by the foreign company to the resulting Cayman entity in the transaction is
required, unless otherwise released or waived by the secured party. If the merger plan is approved, it is then filed with the Cayman Islands General Registry along with a declaration by a director of each company. The Registrar of Companies will then
issue a certificate formalizing the merger or consolidation. The surviving entity remains active while the other company or companies are automatically dissolved. Unless the shares of such shareholder are publicly listed or quoted, dissenting
shareholders in a merger or consolidation of this type are entitled to payment of the fair value of their shares if such shareholder provides a written objection before the vote.</FONT></TD>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Delaware </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cayman Islands </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cayman companies may also be restructured or amalgamated under supervision of the Grand Court of the Cayman Islands by way of a
"scheme of arrangement." This option is not used with any frequency because a business transaction can be achieved through other means, such as a share capital exchange, merger (as described above), asset acquisition or control, through contractual
arrangements, of an operating business. In the event that a business transaction is sought pursuant to a scheme of arrangement it would require the approval of a majority, in number, of each class of shareholders and creditors with whom the
arrangement is to be made and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meeting summoned for
that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the Court the view that the
transaction ought not be approved, the Court can be expected to approve the arrangement if it satisfies itself that:<BR>
<BR>
--&gt;the company is not proposing to act illegally or beyond the scope of its authority and the statutory provisions as to majority vote have been complied with;<BR>
<BR>
--&gt;the shareholders have been fairly represented at the meeting in question;<BR>
<BR>
--&gt;the arrangement is such as a businessman would reasonably approve; and</FONT></TD>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cayman Islands </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>--&gt;the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law of the Cayman Islands or
that would amount to a "fraud on the minority" (a legal concept, different than "fraud" in the sense of dishonesty).<BR>
<BR>
When a takeover offer is made and accepted by holders of 90% of the shares within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection may
be made to the Grand Court of the Cayman Islands but is unlikely to succeed unless there is evidence of fraud, bad faith or collusion.<BR>
<BR>
If the arrangement and reconstruction are thus approved, any dissenting shareholders would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of United States corporations,
providing rights to receive payment in cash for the judicially determined value of the shares.</FONT></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Delaware </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cayman Islands </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Shareholder Suits</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class actions and derivative actions generally are available to shareholders under Delaware law for, among other things, breach
of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court generally has discretion to permit the winning party to recover attorneys' fees incurred in connection with such
action.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>The rights of shareholders under Cayman Islands law are not as extensive as those under Delaware law. Class actions and
derivative actions are generally not available to shareholders under Cayman Islands laws and our Cayman Islands counsel is not aware of a significant number of such reported actions having been brought in Cayman Islands courts. In principle, we will
normally be the proper plaintiff and a derivative action may not be brought by a minority shareholder. However, the Cayman Islands courts would ordinarily be expected to follow English case law precedent, which would permit a shareholder to commence
an action in the company's name to remedy a wrong done to it where the act complained of is alleged to be beyond the company's corporate power or is illegal or would result in the violation of its memorandum of association or articles of association
or where the individual rights of the plaintiff shareholder have been infringed or are about to be infringed. Furthermore, consideration would be given by the court to acts that are alleged to constitute a "fraud on the minority" or where an act
requires the approval of a greater percentage of shareholders than actually approved it. The winning party in such an action generally would be able to recover a portion of attorney's fees incurred in connection with such action.</FONT></TD>
</TR>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Description of Share Capital </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Delaware </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cayman Islands </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Inspection of Corporate<BR>
Records</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
Under Delaware law, shareholders of a Delaware corporation have the right during normal business hours to inspect for any proper purpose, and to obtain copies of list(s) of shareholders and other books and records of the corporation and its
subsidiaries, if any, to the extent the books and records of such subsidiaries are available to the corporation.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
Shareholders of a Cayman Islands company have no general right under Cayman Islands law to inspect or obtain copies of a list of shareholders or other corporate records of the company. However, these rights may be provided in the company's articles
of association.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Shareholder Proposals</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unless provided in the corporation's certificate of incorporation or bylaws, Delaware law does not include a provision
restricting the manner in which shareholders may bring business before a meeting.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>The Companies Law of the Cayman Islands does not provide shareholders any right to bring business before a meeting or requisition
a general meeting. However, these rights may be provided in the company's articles of association.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Approval of Corporate<BR>
Matters by Written<BR>
Consent</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
<BR>
Delaware law permits shareholders to take action by written consent signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting of
shareholders.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
<BR>
The Companies Law of the Cayman Islands allows a special resolution to be passed in writing if signed by all the shareholders and authorized by the articles of association.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Our articles of association authorize such written consents while we are a "controlled company", but we believe that the
unanimity requirement will make this option impractical after the consummation of this offering. Written consents are not authorized if we are not a "controlled company".</FONT></TD>
</TR>
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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Description of Share Capital </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Delaware </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Cayman Islands </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B><I>Calling of Special<BR>
Shareholders Meetings</I></B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
Delaware law permits the board of directors or any person who is authorized under a corporation's certificate of incorporation or bylaws to call a special meeting of shareholders.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><BR>
The Companies Law of the Cayman Islands does not have provisions governing the proceedings of shareholders meetings which are usually provided in the articles of association.<BR>
<BR>
Our articles of association allow shareholders holding a majority of our stock to call special meetings while we are a "controlled company"; thereafter, shareholders will be precluded from calling special meetings.</FONT></TD>
</TR>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="eg12701_stock_option_plan"> </A>
<A NAME="toc_eg12701_2"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  STOCK OPTION PLAN    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For information on our 2011 Equity Incentive Plan, please see "Executive Compensation&#151;Compensation Discussion and Analysis". </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="eg12701_registration_rights"> </A>
<A NAME="toc_eg12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  REGISTRATION RIGHTS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For information on our Sponsors' registration rights, please see "Certain Relationships and Related Party Transactions&#151;Agreements with
Our Sponsors". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="eg12701_certain_effects_of_authorized_but_unissued_stock"> </A>
<A NAME="toc_eg12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Upon completion of this offering, we will have&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares remaining
authorized but unissued. Authorized but unissued ordinary
shares are available for future issuance without shareholder approval. Issuance of these shares will dilute your percentage ownership in us. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="eg12701_listing"> </A>
<A NAME="toc_eg12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  LISTING    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We intend to apply for the listing of our ordinary shares on the Nasdaq Global Market under the symbol "ISLA". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="eg12701_transfer_agent_and_registrar"> </A>
<A NAME="toc_eg12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  TRANSFER AGENT AND REGISTRAR    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>We intend to engage&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to serve as the transfer agent and registrar for our
ordinary shares. </FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ei12701_description_of_indebtedness"> </A>
<A NAME="toc_ei12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Description of Indebtedness    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ei12701_our_new_credit_facilities"> </A>
<A NAME="toc_ei12701_2"> </A></FONT> <FONT SIZE=2><B>  OUR NEW CREDIT FACILITIES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In connection with this offering, we intend to enter into a new senior secured credit facility consisting of a $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million senior
secured term loan with a $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million senior secured revolving credit facility. The proceeds of the new term loan will be used to repay the portion of the loans under our
existing
senior secured credit agreement that is not repaid with the proceeds of this offering. We expect the new senior secured credit facility to be completed substantially concurrently with the closing of
this offering. Our entry into the new senior secured credit facility is conditioned on the completion of this offering. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
anticipate that the new senior secured credit facility will reduce our annual interest expense and subject us to less restrictive financial covenants. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ei12701_our_existing_credit_agreements"> </A>
<A NAME="toc_ei12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  OUR EXISTING CREDIT AGREEMENTS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prior to the offering, our primary lending arrangements consist of a senior secured credit agreement and a mezzanine credit agreement, each entered
into on September&nbsp;30,
2010 with a syndicate of lenders, including certain of our Sponsors. The principal terms of each are described below. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ei12701_senior_secured_credit_agreement"> </A>
<A NAME="toc_ei12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  Senior Secured Credit Agreement    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our senior secured credit agreement consists of a senior secured term loan of $210.0&nbsp;million, the full amount of which was drawn at closing on
September&nbsp;30, 2010. The proceeds were used to refinance part of our then-existing first- and second-lien term loans and to provide for the ongoing working capital and other general
corporate purposes of the Company. Loans under the senior secured agreement bear interest, at our option, at a rate per annum equal either to a base rate (that can be no less than 3%, plus 7%), or an
adjusted Eurodollar rate (that can be no less than 2%, plus 8%). The term loan under the senior secured credit agreement was issued at a discount of $28.5&nbsp;million on September&nbsp;30, 2010.
As of July&nbsp;2, 2011 we had $210.0&nbsp;million outstanding under the senior secured credit agreement, bearing interest at 10% per annum. The unamortized discount was $25.3&nbsp;million,
resulting in a net balance of $184.7&nbsp;million. Loans under this agreement mature on September&nbsp;30, 2015. The borrower under this agreement is our wholly-owned subsidiary, Isola USA Corp.,
and loans under the agreement are guaranteed by various Isola group subsidiaries. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
senior secured credit agreement requires us to maintain certain covenants that restrict our ability to operate our business, including, but not limited to, restrictions on the ability of the
borrower and certain Isola group subsidiaries to (i)&nbsp;dispose of assets or stock; (ii)&nbsp;incur additional indebtedness and guarantee obligations; (iii)&nbsp;pay certain dividends;
(iv)&nbsp;create liens on assets; (v)&nbsp;make investments, loans or advances; (vi)&nbsp;restrict distributions to the borrowers or guarantors from their subsidiaries; (vii)&nbsp;engage in
mergers or consolidations; (viii)&nbsp;engage in certain transactions with affiliates; (ix)&nbsp;incur additional negative pledges; (x)&nbsp;incur capital expenditures; (xi)&nbsp;change our
fiscal year or accounting practices or the lines of business in which we and our subsidiaries are involved; (xii)&nbsp;enter into sale-leaseback transactions; (xiii)&nbsp;prepay
principal of, premium, or interest on, or redeem, purchase, retire, defease, or create a sinking fund or make a similar payment with respect to, any subordinated indebtedness and certain other debt;
(xiv)&nbsp;change the conduct of business; (xv)&nbsp;conduct activities of any parent holding company; (xvi)&nbsp;amend our organizational documents; (xvii)&nbsp;cease to keep in full force
and effect our corporate existence and all rights, franchises, licenses and permits material to our business; (xviii)&nbsp;not pay our taxes or certain claims when they are due; or
(xix)&nbsp;allow insurance to expire. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
senior secured credit agreement also requires us to meet certain financial covenants that change over time. Specifically, we are required to comply with an interest coverage ratio and a leverage
ratio. </FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Description of Indebtedness </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


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<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
interest coverage ratio is the ratio of Consolidated Adjusted EBITDA to consolidated interest expense for a rolling four-fiscal quarter period. At July&nbsp;2, 2011 the required
interest coverage ratio was at 1.75:1.00, and our actual ratio was 2.81:1.00. The required interest coverage ratio increases over time, to 2.00:1:00 effective March&nbsp;31, 2012 and increasing to
2.25:1:00 effective December&nbsp;28, 2013. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
leverage ratio is the ratio of consolidated total secured debt to Consolidated Adjusted EBITDA for a rolling four-fiscal quarter period. At July&nbsp;2, 2011, the maximum allowed
leverage ratio was at 3.35:1.00, and our actual leverage ratio was 2.19:1.00. The maximum leverage ratio decreases over time, to 3.25:1.00 effective December&nbsp;31, 2012 and decreasing to
2.25:1.00 effective June&nbsp;28, 2014. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
definition of Consolidated Adjusted EBITDA under the senior secured credit agreement differs from Adjusted EBITDA used elsewhere in the prospectus. Under our senior secured credit agreement,
Consolidated Adjusted EBITDA includes additional add-backs to net income for certain pension costs and other costs, fees, taxes, losses, charges, write-offs, write-downs and
expenses. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ei12701_mezzanine_credit_agreement"> </A>
<A NAME="toc_ei12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  Mezzanine Credit Agreement    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On September&nbsp;30, 2010, we issued an initial principal amount of $175.0&nbsp;million in unsecured term loans pursuant to our mezzanine credit
agreement. The proceeds were used in part to refinance our then-existing first- and second-lien term debt, as well as to pay other fees and expenses related to the mezzanine
credit agreement. The unsecured term loans issued pursuant to the mezzanine credit agreement are subordinate and junior to the prior payment in full of all principal, interest and other obligations
owed under the secured term loans issued under our senior secured credit agreement. The unsecured term loans issued pursuant to the mezzanine credit agreement bear interest at a rate of 16% per annum,
payable quarterly each March&nbsp;31, June&nbsp;30, September&nbsp;30 and December&nbsp;31 of each year until maturity, with half (8% per annum) payable in cash and the other half (8% per
annum) payable by accreting such amount to the outstanding principal amount of the unsecured term loans. The unsecured term loans under the mezzanine credit agreement were issued at a discount of
$70.4&nbsp;million on September&nbsp;30, 2010. As of July&nbsp;2, 2011, we had principal of $185.7&nbsp;million outstanding under the mezzanine credit agreement, which included
$10.7&nbsp;million of accreted PIK interest and a net discount of $66.2&nbsp;million. The unamortized discount was $66.2&nbsp;million resulting in a net balance of $119.5&nbsp;million. Loans
under this
agreement mature on March&nbsp;24, 2016. The borrower under the mezzanine credit agreement is our wholly-owned subsidiary Isola USA Corp., and its obligations are guaranteed by various Isola Group
subsidiaries. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
mezzanine credit agreement requires us to maintain certain financial and operating covenants that are substantially similar to the covenants governing our senior secured credit agreement. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Mandatory Prepayments.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We are required to pay down the loans under our senior credit agreement under certain circumstances, such as upon the issuance of equity
securities (such as this offering) or the issuance of debt, the sale of assets or, commencing with the fiscal year ending December&nbsp;31, 2011, upon the accumulation of "excess cash flow" as
defined in the agreements, with 75% of the proceeds going to pay down the loans under our senior secured credit agreement. We are required to pay down all amounts outstanding under our mezzanine
credit agreement upon the occurrence of a change in control. We intend to use the net proceeds from this offering and a portion of the proceeds from the term loan described above under "Our New Credit
Facilities" to repay loans under these credit agreements in their entirety. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Concurrent Equity Issuance.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In connection with the unsecured term loans, the mezzanine lenders purchased equity interests in the Sponsor Holding Company for an
aggregate purchase price of $57.7&nbsp;million approximately equal to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of our ordinary
shares, and our Luxembourg Holding Company issued Class&nbsp;C convertible preferred
certificates with an aggregate par value of 43.5&nbsp;million euro. These Class&nbsp;C convertible preferred certificates were issued at an aggregate discount of 25.3&nbsp;million euro. As of
July&nbsp;2, 2011, these Class&nbsp;C convertible preferred certificates had $62.3&nbsp;million in outstanding principal and an unamortized discount balance of $36.7&nbsp;million, resulting in
a net balance of $26.5&nbsp;million. </FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ek12701_taxation"> </A>
<A NAME="toc_ek12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Taxation    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ek12701_cayman_islands_taxation"> </A>
<A NAME="toc_ek12701_2"> </A></FONT> <FONT SIZE=2><B>  CAYMAN ISLANDS TAXATION    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no
taxation in the nature of inheritance tax or estate duty. There are no other taxes levied by the Government of the Cayman Islands that are likely to be material to holders of ordinary shares. Even
though the Cayman Islands has no direct taxation, it has entered into some limited tax treaties with certain countries. There are no exchange control regulations or currency restrictions in the Cayman
Islands. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Pursuant
to Section&nbsp;6 of the Tax Concessions Law (1999 Revision) of the Cayman Islands, we have obtained an undertaking from the Governor-in-Council: </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>(1)&nbsp;&nbsp;&nbsp;that
no law which is enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciation shall apply to us or our operations; and </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>(2)&nbsp;&nbsp;&nbsp;that
the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on our shares, debentures or other obligations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
undertaking for us is for a period of twenty years from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ek12701_material_united_states__ek102233"> </A>
<A NAME="toc_ek12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following is a discussion of the material U.S. federal income tax consequences of owning and disposing of ordinary shares issued pursuant to this
offering, but does not purport to be a complete analysis of all the potential tax considerations relating thereto. The discussion applies to U.S. Holders (as defined below) who hold our ordinary
shares as capital assets for tax purposes and it does not describe all of the tax consequences that may be relevant to holders subject to special rules, such as: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>certain
financial institutions;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>insurance
companies;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>dealers
and traders in securities or foreign currencies;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>persons
holding ordinary shares as part of a hedge, straddle, conversion transaction or other integrated transaction;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>persons
whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>regulated
investment companies;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>real
estate investment trusts;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>tax-exempt
organizations; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>persons
holding ordinary shares that own or are deemed to own ten percent or more of our stock as measured by vote or value. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>This
summary is based upon the provisions of the Internal Revenue Code, Treasury regulations promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof. These
authorities may be changed, possibly retroactively, so as to result in U.S. federal income tax consequences different from those set forth below. No ruling has been or will be sought from the Internal
Revenue Service, or the IRS, with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS will agree with such statements and
conclusions. Please consult your </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>148 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>own
tax advisers concerning the U.S. federal, state, local and foreign tax consequences of owning and disposing of ordinary shares in your particular circumstances. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, if a partnership or entity classified as a partnership for U.S. federal income tax purposes holds our ordinary shares, the tax treatment of a partner in the partnership or other entity
taxed as a partnership generally will depend on the status of the equity owner of such partnership or other entity taxed as a partnership and upon the activities of the partnership or other entity
taxed as a partnership. Accordingly, if you are a partnership or other entity taxed as a partnership that holds our ordinary shares, or if you are an owner in such partnership or other entity taxed as
a partnership, you are urged to consult your tax advisors regarding the specific U.S. federal income tax consequences of the ownership and disposition of our ordinary shares. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
U.S. Holder is a beneficial owner of ordinary shares that is, for U.S. federal tax purposes: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>an
individual citizen or resident of the United States;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>a
corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any state thereof or the District of
Columbia;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>an
estate whose income is subject to U.S. federal income taxation regardless of its source; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>a
trust (x)&nbsp;whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to
control all substantial decisions of the trust or (y)&nbsp;which has made an election to be treated as a U.S. person. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ek12701_taxation_of_distributions_1"> </A>
<A NAME="toc_ek12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  TAXATION OF DISTRIBUTIONS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Subject to the passive foreign investment company rules described below, distributions paid on ordinary shares will be treated as dividends to the
extent paid out of current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we do not maintain calculations of our earnings and profits under U.S.
federal income tax principles, it is expected that distributions generally will be reported to you as dividends. Subject to applicable limitations, dividends received by non-corporate U.S.
Holders in taxable years beginning before January&nbsp;1, 2013 will be taxable at a maximum rate of 15% provided that the U.S. Holder has held the shares for the required holding period set forth
under the Internal Revenue Code. U.S. Holders should consult their own tax advisors regarding the implications of these rules in their particular circumstances. Distributions in excess of current and
accumulated earnings and profits generally will be applied against and reduce your basis in our ordinary shares (but not below zero) and, to the extent in excess of such basis, will be treated as gain
from the sale or exchange of such ordinary shares as described below under the heading "Sale and Other Disposition of Ordinary Shares". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
general, dividends will not be eligible for the dividends received deduction generally allowed to U.S. corporations under the Internal Revenue Code. Any dividends received will generally be treated
as foreign-source dividend income to you. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ek12701_sale_and_other_disposition_of_ordinary_shares"> </A>
<A NAME="toc_ek12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  SALE AND OTHER DISPOSITION OF ORDINARY SHARES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Subject to the passive foreign investment company rules described below, for U.S. federal income tax purposes, gain or loss you realize on the sale
or other disposition of ordinary shares will be capital gain or loss, and will be long-term capital gain or loss if you have held the ordinary shares for more than one year. The amount of
your gain or loss will be equal to the difference between your tax basis in the ordinary shares disposed of and the amount realized on the disposition. The deductibility of capital losses is subject
to limitations. Such gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>149 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ek12701_passive_foreign_investment_company_rules"> </A>
<A NAME="toc_ek12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  PASSIVE FOREIGN INVESTMENT COMPANY RULES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We believe that we are not currently, and will not be considered in the future, a "passive foreign investment company" ("PFIC") for U.S. federal
income tax purposes. However, since PFIC status depends upon the composition of a company's income and assets and the market value of its assets (including, among others, less than 25&nbsp;percent
owned equity investments) from time to time, there can be no assurance that we will not be considered a PFIC for any taxable year. If we were treated as a PFIC for any taxable year during which you
held our ordinary shares, certain adverse consequences could apply to you. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>If
we are treated as a PFIC for any taxable year, gain recognized by you on a sale or other disposition of an ordinary share would be allocated ratably over your holding period for the ordinary share.
The amounts allocated to the taxable year of the sale or other exchange and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would
be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, and an interest charge would be imposed on the amount allocated to such taxable year. Further, to the
extent that any distribution received by you in a taxable year exceeds 125% of the average of the annual distributions on the ordinary shares received during the preceding three years or your holding
period, whichever is shorter, that distribution would be subject to taxation in the same manner as gain, described immediately above. In addition, if we were to be treated as a PFIC for a taxable year
in which we pay a dividend or for the prior taxable year, the 15% dividend rate discussed above with respect to dividends paid to non-corporate holders would not apply. Certain elections
may be available (described below) to U.S. Holders that may mitigate the adverse consequences resulting from PFIC status. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
U.S. Holder of "marketable stock" in a PFIC may make a mark-to-market election, provided that the ordinary shares are actively traded. We anticipate that the ordinary shares
should qualify as being actively traded, but no assurances may be given in this regard. If a U.S. Holder of ordinary shares makes this election, the U.S. Holder of ordinary shares will generally
(i)&nbsp;include as income for each taxable year the excess, if any, of the fair market value of ordinary shares held at the end of the taxable year over the adjusted tax basis of such ordinary
shares and (ii)&nbsp;deduct as a loss the excess, if any, of the adjusted tax basis of the ordinary shares over the fair market value of such ordinary shares held at the end of the taxable year, but
only to the extent of the amount previously included in income as a result of the mark-to-market election. The U.S. Holder's adjusted tax basis in the ordinary shares would be
adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. holder makes a mark-to-market election in respect of a
corporation classified as a PFIC and such corporation ceases to be classified as a PFIC, the U.S. holder will not be required to take into account the gain or loss described above during any period
that such corporation is not classified as a PFIC. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
qualified electing fund election (a "QEF election") could also alleviate certain of the tax consequences referred to above. However, it is expected that the conditions necessary for making a QEF
election will not apply in the case of our ordinary shares, because we do not expect to make available the information necessary for U.S. Holders to report income and certain losses in a manner
consistent with the requirements for such elections. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>If
a U.S. Holder owns our ordinary shares during any taxable year that we are a PFIC, such U.S. Holder may be subject to certain reporting obligations with respect to our ordinary shares, including
reporting on IRS Form&nbsp;8621. In the case of a U.S. Holder that has held ordinary shares during any taxable year in respect of which we were classified as a PFIC and continued to hold such
ordinary shares (or any portion thereof), and has not previously made a mark-to-market election, and that is now considering making a mark-to-market
election for the first time, special tax rules may apply relating to purging the PFIC taint of such ordinary shares. Each U.S. Holder is urged to consult its tax advisor concerning the United States
federal income tax </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>150 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>consequences
of purchasing, holding, and disposing ordinary shares if we are or become classified as a PFIC, including the possibility of making a mark-to-market election. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ek12701_information_reporting_and_backup_withholding"> </A>
<A NAME="toc_ek12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  INFORMATION REPORTING AND BACKUP WITHHOLDING    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Payment of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are
subject to information reporting and to backup withholding unless (i)&nbsp;you are a corporation or other exempt recipient or (ii)&nbsp;in the case of backup withholding, you provide a correct
taxpayer identification number and certify that you are not subject to backup withholding. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
amount of any backup withholding from a payment to you will be allowed as a credit against your U.S. federal income tax liability and may entitle you to a refund, provided that the required
information is furnished to the IRS. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
taxable years beginning after March&nbsp;18, 2010, new legislation requires certain U.S. Holders who are individuals to report information relating to stock of a non-U.S. person,
subject to certain exceptions (including an exception for stock held in custodial accounts maintained by a U.S. financial institution). U.S. Holders are urged to consult their tax advisors concerning
the effect, if any, of this legislation on their ownership and disposition of ordinary shares. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>151 </B></FONT></P>

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NAME="em12701_underwriting"> </A>
<A NAME="toc_em12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Underwriting    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We are offering the shares of our ordinary shares described in this prospectus and the accompanying prospectus through the
underwriters named below. UBS Securities&nbsp;LLC and Piper Jaffray&nbsp;&amp;&nbsp;Co. are the joint book-running managers of this offering and the representatives of the underwriters.
We have entered into an underwriting agreement with the representatives. Subject to the terms and conditions of the underwriting agreement, each of the underwriters has severally agreed to purchase
and we have agreed to sell to the underwriters, the number of ordinary shares listed next to its name in the following table. </FONT></P>
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<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Underwriters</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Number of<BR>
shares</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=6 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>UBS Securities&nbsp;LLC</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Piper Jaffray&nbsp;&amp;&nbsp;Co.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Needham&nbsp;&amp; Company,&nbsp;LLC</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Oppenheimer&nbsp;&amp;&nbsp;Co.&nbsp;Inc.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The underwriting agreement provides that the underwriters must buy all of the shares if they buy any of them. However, the underwriters are not required to take
or pay for the shares covered by the underwriters' over-allotment option described below. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
ordinary shares are offered subject to a number of conditions, including: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>receipt
and acceptance of our ordinary shares by the underwriters, and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
underwriters' right to reject orders in whole or in part. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
connection with this offering, certain of the underwriters or securities dealers may distribute prospectuses electronically. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="em12701_over-allotment_option"> </A>
<A NAME="toc_em12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  OVER-ALLOTMENT OPTION    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We have granted the underwriters an option to buy up to an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional ordinary shares. If the underwriters exercise
their option in full, we will issue and sell up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any,
made in connection with this offering. The underwriters have 30&nbsp;days from the date of this prospectus to exercise this option. If the underwriters exercise this option, they will each purchase
additional shares approximately in proportion to the amounts specified in the table above. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="em12701_commissions_and_discounts"> </A>
<A NAME="toc_em12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  COMMISSIONS AND DISCOUNTS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Shares sold by the underwriters to the public will initially be offered at the public offering price set forth on the cover of this prospectus. Any
shares sold by the underwriters to securities dealers may be sold at a discount of up to $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share from the public offering price. Sales of shares made outside the United
States may
be made by affiliates of the underwriters. If all the shares are not sold at the public offering price, the representatives may change the offering price and the other selling terms. Upon execution of
the underwriting agreement, the underwriters will be obligated to purchase the shares at the prices and upon the terms stated therein. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>152 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Underwriting </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table shows the per share and total underwriting discounts and commissions we will pay to the underwriters assuming both no exercise and full exercise of the underwriters' option to
purchase additional ordinary shares from us. </FONT></P>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>No exercise</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Full exercise</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=9 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Per share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=2>We estimate that the total expenses of this offering payable by us, not including the underwriting discounts and commissions, will be approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="em12701_no_sales_of_similar_securities"> </A>
<A NAME="toc_em12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  NO SALES OF SIMILAR SECURITIES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We, our executive officers and directors and certain holders of our outstanding ordinary shares, stock options and other equity awards that together
hold at least&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our outstanding ordinary shares have entered into lock-up agreements with the underwriters. Under these agreements, subject to certain exceptions, we and
each of these persons may not, without the prior written approval of UBS Securities&nbsp;LLC, offer, sell, contract to sell or otherwise dispose of, directly or indirectly, or hedge our ordinary
shares or securities convertible into or exchangeable or exercisable for our ordinary shares. These restrictions will be in effect for a period of 180&nbsp;days after the date of this prospectus. At
any time and without public notice, UBS Securities&nbsp;LLC, may, in its sole discretion, release some or all of the securities from these lock-up agreements. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="em12701_indemnification"> </A>
<A NAME="toc_em12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  INDEMNIFICATION    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We have agreed to indemnify the underwriters against certain liabilities, including certain liabilities under the Securities Act. If we are unable to
provide this indemnification, we have agreed to contribute to payments the underwriters may be required to make in respect of those liabilities. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="em12701_nasdaq_global_market_listing"> </A>
<A NAME="toc_em12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  NASDAQ GLOBAL MARKET LISTING    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our ordinary shares are listed on the Nasdaq Global Market under the symbol "ISLA". </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="em12701_price_stabilization,_short_positions"> </A>
<A NAME="toc_em12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  PRICE STABILIZATION, SHORT POSITIONS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In connection with this offering, the underwriters may engage in activities that stabilize, maintain or otherwise affect the price of our ordinary
shares, including: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>stabilizing
transactions;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>short
sales;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>purchases
to cover positions created by short sales;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>imposition
of penalty bids; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>syndicate
covering transactions. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Stabilizing
transactions consist of bids or purchases made for the purpose of preventing or retarding a decline in the market price of our ordinary shares while this offering is in progress. These
transactions may also include making short sales of our ordinary shares, which involve the sale by the underwriters of a greater number of ordinary shares than they are required to purchase in this
offering, and purchasing ordinary shares on the open market to cover positions created by short sales. Short sales may be "covered </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>153 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Underwriting </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>short
sales", which are short positions in an amount not greater than the underwriters' over-allotment option referred to above, or may be "naked short sales", which are short positions in
excess of that amount. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
underwriters may close out any covered short position by either exercising their over-allotment option, in whole or in part, or by purchasing shares in the open market. In making this
determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the
over-allotment option. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Naked
short sales are short sales made in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked
short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the ordinary shares in the open market that could adversely affect
investors who purchased in this offering. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives
have repurchased shares sold by or for the account of that underwriter in stabilizing or short covering transactions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As
a result of these activities, the price of our ordinary shares may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be
discontinued
by the underwriters at any time. The underwriters may carry out these transactions on Nasdaq, in the over-the-counter market or otherwise. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="em12701_determination_of_offering_price"> </A>
<A NAME="toc_em12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  DETERMINATION OF OFFERING PRICE    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Prior to this offering, there was no public market for our ordinary shares. The initial public offering price will be determined by negotiation by us
and the representatives of the underwriters. The principal factors to be considered in determining the initial public offering price include: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
information set forth in this prospectus and otherwise available to representatives;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
history and prospects and the history and prospects for the industry in which we compete;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
past and present financial performance and an assessment of our management;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>our
prospects for future earnings and the present state of our development;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
general condition of the securities market at the time of this offering;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>the
recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>other
factors deemed relevant by the underwriters and us. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="em12701_affiliations"> </A>
<A NAME="toc_em12701_9"> </A>
<BR></FONT><FONT SIZE=2><B>  AFFILIATIONS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Certain of the underwriters and their affiliates have in the past provided, are currently providing and may in the future from time to time provide,
investment banking and other financing, trading, banking, research, transfer agent and trustee services to the Company or its subsidiaries, for which they have in the past received, and may currently
or in the future receive, customary fees and expenses. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>154 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Underwriting </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="em12701_notice_to_investors"> </A>
<A NAME="toc_em12701_10"> </A>
<BR></FONT><FONT SIZE=2><B>  NOTICE TO INVESTORS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Notice to Prospective Investors in the European Economic Area.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In relation to each member state of the European Economic Area that has implemented the Prospectus
Directive (each, a relevant member state), other than Germany, with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the relevant
implementation date), an offer of securities described in this prospectus may not be made to the public in that relevant member state other than: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>to
any legal entity which is a qualified investor as defined in the Prospectus Directive;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>by
the Bookrunners to fewer than 100, or, if the Relevant Member State has implemented the relevant provisions of the 2010 PD Amending Directive, 150, natural or
legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the Bookrunners for any
such offer; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>in
any other circumstances falling within Article&nbsp;3(2) of the Prospectus Directive, </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>provided
that no such offer of securities shall require us or any underwriter to publish a prospectus pursuant to Article&nbsp;3 of the Prospectus Directive. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
purposes of this provision, the expression an "offer of securities to the public" in any relevant member state means the communication in any form and by any means of sufficient information on the
terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities, as the expression may be varied in that member state by any
measure implementing the Prospectus Directive in that member state, and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending
Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State, and includes any relevant implementing measure in each
relevant member state. The expression 2010 PD Amending Directive means Directive 2010/73/EU. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
have not authorized and do not authorize the making of any offer of securities through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the
final placement of the securities as contemplated in this prospectus. Accordingly, no purchaser of the securities, other than the underwriters, is authorized to make any further offer of the
securities on behalf of us or the underwriters. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
EEA selling restriction is in addition to any other selling restrictions set out in this prospectus. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Notice to Prospective Investors in Australia.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This offering memorandum is not a formal disclosure document and has not been, nor will be, lodged with the
Australian Securities and Investments Commission. It does not purport to contain all information that an investor or their professional advisers would expect to find in a prospectus or other
disclosure document (as defined in the Corporations Act 2001 (Australia)) for the purposes of Part&nbsp;6D.2 of the Corporations Act 2001 (Australia) or in a product disclosure statement for the
purposes of Part&nbsp;7.9 of the Corporations Act 2001 (Australia), in either case, in relation to the securities. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
securities are not being offered in Australia to "retail clients" as defined in sections&nbsp;761G and 761GA of the Corporations Act 2001 (Australia). This offering is being made in Australia
solely to "wholesale clients" for the purposes of section&nbsp;761G of the Corporations Act 2001 (Australia) and, as such, no prospectus, product disclosure statement or other disclosure document in
relation to the securities has been, or will be, prepared. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>This
offering memorandum does not constitute an offer in Australia other than to wholesale clients. By submitting an application for our securities, you represent and warrant to us that you are a
wholesale client for the purposes of section&nbsp;761G of the Corporations Act 2001 (Australia). If any recipient of this offering </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>155 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Underwriting </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>memorandum
is not a wholesale client, no offer of, or invitation to apply for, our securities shall be deemed to be made to such recipient and no applications for our securities will be accepted from
such recipient. Any offer to a recipient in Australia, and any agreement arising from acceptance of such offer, is personal and may only be accepted by the recipient. In addition, by applying for our
securities you undertake to us that, for a period of 12&nbsp;months from the date of issue of the securities, you will not transfer any interest in the securities to any person in Australia other
than to a wholesale client. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Notice to Prospective Investors in Hong Kong.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our securities may not be offered or sold in Hong Kong, by means of this prospectus or any document other than
(i)&nbsp;to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (ii)&nbsp;in circumstances which do
not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (iii)&nbsp;in other circumstances which do not result in the document being a
"prospectus" within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong). No advertisement, invitation or document relating to our securities may be issued or may be in the possession of
any person for the purpose of issue (in each case whether in Hong Kong or elsewhere) which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong
(except if permitted to do so under the securities laws of Hong Kong) other than with respect to the securities which are or are intended to be disposed of only to persons outside Hong Kong or only to
"professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Notice to Prospective Investors in Japan.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan ("the
Financial Instruments and Exchange Law") and our securities will not be offered or sold, directly or indirectly, in Japan, or to, or for the benefit of, any resident of Japan (which term as used
herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in
Japan, or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the
Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Notice to Prospective Investors in Singapore.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This document has not been registered as a prospectus with the Monetary Authority of Singapore and in Singapore, the
offer and sale of our securities is made pursuant to exemptions provided in sections&nbsp;274 and 275 of the Securities and Futures Act, Chapter&nbsp;289 of Singapore ("SFA"). Accordingly, this
prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of our securities may not be circulated or distributed, nor may our
securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i)&nbsp;to an institutional
investor as defined in Section&nbsp;4A of the SFA pursuant to Section&nbsp;274 of the SFA, (ii)&nbsp;to a relevant person as defined in section&nbsp;275(2) of the SFA pursuant to
Section&nbsp;275(1) of the SFA, or any person pursuant to Section&nbsp;275(1A) of the SFA, and in accordance with the conditions specified in Section&nbsp;275 of the SFA or
(iii)&nbsp;otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with the conditions (if any) set forth in
the SFA. Moreover, this document is not a prospectus as defined in the SFA. Accordingly, statutory liability under the SFA in relation to the content of prospectuses would not apply. Prospective
investors in Singapore should consider carefully whether an investment in our securities is suitable for them. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>156 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Underwriting </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>Where
our securities are subscribed or purchased under Section&nbsp;275 of the SFA by a relevant person which is: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>by
a corporation (which is not an accredited investor as defined in Section&nbsp;4A of the SFA) the sole business of which is to hold investments and the entire
share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>for
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an
accredited investor,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>for
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an
accredited investor, </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>shares
of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferable for six months after that corporation or that trust has acquired the
shares under Section&nbsp;275 of the SFA, except: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>to
an institutional investor (for corporations under Section&nbsp;274 of the SFA) or to a relevant person defined in Section&nbsp;275(2) of the SFA, or any
person pursuant to an offer that is made on terms that such shares of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its
equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the
conditions, specified in Section&nbsp;275 of the SFA;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>where
no consideration is given for the transfer; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>where
the transfer is by operation of law. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, investors in Singapore should note that the securities acquired by them are subject to resale and transfer restrictions specified under Section&nbsp;276 of the SFA, and they, therefore,
should seek their own legal advice before effecting any resale or transfer of their securities. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Notice to Prospective Investors in Switzerland.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Prospectus does not constitute an issue prospectus pursuant to Article&nbsp;652a or Article&nbsp;1156 of
the Swiss Code of Obligations ("CO") and the shares will not be listed on the SIX Swiss Exchange. Therefore, the Prospectus may not comply with the disclosure standards of the CO and/or the listing
rules (including any prospectus schemes) of the SIX Swiss Exchange. Accordingly, the shares may not be offered to the public in or from Switzerland, but only to a selected and limited circle of
investors, which do not subscribe to the shares with a view to distribution. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Notice to Prospective Investors in the United Kingdom.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This prospectus is only being distributed to and is only directed at: (1)&nbsp;persons who are outside the
United Kingdom; (2)&nbsp;investment professionals falling within Article&nbsp;19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or
(3)&nbsp;high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article&nbsp;49(2)(a) to (d)&nbsp;of the Order (all such persons falling within
(1)&#150;(3) together being referred to as "relevant persons"). The shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such shares
will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this prospectus or any of its contents. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>157 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="eo12701_validity_of_ordinary_shares"> </A>
<A NAME="toc_eo12701_1"> </A>
<BR></FONT><FONT SIZE=4>  Validity of Ordinary Shares    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Certain legal matters as to U.S. law in connection with this offering will be passed upon for us by DLA Piper&nbsp;LLP (US),
Phoenix, Arizona. The validity of the ordinary shares offered hereby and certain other matters will be passed upon for us by Appleby, Cayman Islands. Certain legal matters relating to the offering
will be passed upon for the underwriters by Davis Polk&nbsp;&amp; Wardwell&nbsp;LLP, Menlo Park, California. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="eo12701_experts"> </A>
<A NAME="toc_eo12701_2"> </A>
<BR></FONT><FONT SIZE=4>  Experts    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The consolidated financial statements of Isola Group S.a.r.l. and Subsidiaries as of January&nbsp;1, 2011 and December&nbsp;26,
2009 and for each of the three years in the period ended January&nbsp;1, 2011 included in this prospectus and the related financial statement schedules included elsewhere in the registration
statement have been audited by Deloitte&nbsp;&amp; Touche&nbsp;LLP, an independent registered public accounting firm, as stated in their reports appearing herein and elsewhere in the registration
statement. Such financial statements and financial statement schedules are included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
balance sheet of Isola Group&nbsp;Ltd. as of September&nbsp;20, 2011 (its date of incorporation) included in this prospectus has been audited by Deloitte&nbsp;&amp; Touche&nbsp;LLP, an
independent registered public accounting firm, as stated in their report appearing herein. Such balance sheet is included in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="eo12701_additional_information"> </A>
<A NAME="toc_eo12701_3"> </A>
<BR></FONT><FONT SIZE=4>  Additional Information    <BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We have filed with the SEC a registration statement on Form&nbsp;S-1 under the Securities Act to register our ordinary
shares being offered in this prospectus. This prospectus, which forms part of the registration statement, does not contain all of the information included in the registration statement and the
exhibits and schedules thereto. You will find additional information about us and our ordinary shares in the registration statement. You may read and copy the registration statement and the exhibits
and schedules thereto, as well as other information that we file with the SEC, at the public reference facilities maintained by the SEC at 100&nbsp;F Street, N.E., Washington, DC 20549. You may
obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website (http://www.sec.gov) that
contains information that registrants, including us, file electronically with the SEC. Statements made in this prospectus about legal documents may not necessarily be complete and you should read the
documents, which are filed as exhibits to the registration statement or otherwise filed with the SEC. Our website address is www.isola-group.com. The contents of our website are not part of this
prospectus. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>158 </B></FONT></P>

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<A NAME="fa12701_index_to_consolidated_financial_statements"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><BR><FONT SIZE=2><B>INDEX TO CONSOLIDATED FINANCIAL STATEMENTS  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A NAME="FA12701_TOC"></A> </FONT></P>
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<TD COLSPAN=4 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Consolidated Financial Statements of Isola Group S.a.r.l. and subsidiaries as of January&nbsp;1, 2011 and December&nbsp;26, 2009, and for
the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008</B></FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#fb12701_isola_group_s.a.r.l._and_subsi__iso05720"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Report of Independent Registered Public Accounting Firm</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fb12701_isola_group_s.a.r.l._and_subsi__iso05720"><FONT SIZE=2><B> F-2</B></FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#fc12701_isola_group_s.a.r.l._and_subsi__iso05494"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Consolidated Balance Sheets</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fc12701_isola_group_s.a.r.l._and_subsi__iso05494"><FONT SIZE=2><B> F-3</B></FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#fe12701_isola_group_s.a.r.l._and_subsi__iso07054"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Consolidated Statements of Operations</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fe12701_isola_group_s.a.r.l._and_subsi__iso07054"><FONT SIZE=2><B> F-4</B></FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#fg12701_isola_group_s.a.r.l._and_subsi__iso08758"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Consolidated Statements of Stockholder's Deficiency and Comprehensive Income
(Loss)</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fg12701_isola_group_s.a.r.l._and_subsi__iso08758"><FONT SIZE=2><B> F-5</B></FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#fi12701_isola_group_s.a.r.l._and_subsi__iso07027"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Consolidated Statements of Cash Flows</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fi12701_isola_group_s.a.r.l._and_subsi__iso07027"><FONT SIZE=2><B> F-8</B></FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#fk12701_isola_group_s.a.r.l._and_subsi__iso08305"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Notes to Consolidated Financial Statements</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fk12701_isola_group_s.a.r.l._and_subsi__iso08305"><FONT SIZE=2><B> F-9</B></FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Condensed Consolidated Financial Statements of Isola Group S.a.r.l. and subsidiaries as of July&nbsp;2, 2011 and
June&nbsp;26, 2010, and for the Six Months Ended July&nbsp;2, 2011 and June&nbsp;26, 2010</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Condensed Consolidated Balance Sheets (Unaudited)</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B> F-56</B></FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#go12701_isola_group_s.a.r.l._and_subsi__iso07268"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Condensed Consolidated Statements of Operations (Unaudited)</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#go12701_isola_group_s.a.r.l._and_subsi__iso07268"><FONT SIZE=2><B> F-57</B></FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#gq12701_isola_group_s.a.r.l._and_subsi__iso08402"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Condensed Consolidated Statement of Stockholder's Deficiency and Comprehensive
Loss (Unaudited)</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#gq12701_isola_group_s.a.r.l._and_subsi__iso08402"><FONT SIZE=2><B> F-58</B></FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#gs12701_isola_group_s.a.r.l._and_subsi__iso07241"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Condensed Consolidated Statements of Cash Flows (Unaudited)</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#gs12701_isola_group_s.a.r.l._and_subsi__iso07241"><FONT SIZE=2><B> F-59</B></FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#NOTES2"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Notes to Condensed Consolidated Financial Statements (Unaudited)</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#NOTES2"><FONT SIZE=2><B> F-61</B></FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Balance Sheet of Isola Group&nbsp;Ltd. as of September&nbsp;20, 2011</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#ha12701_isola_group_ltd._a_wholly_owne__iso05074"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Report of Independent Registered Public Accounting Firm</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ha12701_isola_group_ltd._a_wholly_owne__iso05074"><FONT SIZE=2><B> F-85</B></FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#Balance_Sheet92"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance Sheet</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#Balance_Sheet92"><FONT SIZE=2><B> F-86</B></FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMENTS"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Notes to Balance Sheet</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMENTS"><FONT SIZE=2><B> F-87</B></FONT></A></TD>
</TR>
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 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-1 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fb12701_isola_group_s.a.r.l._and_subsi__iso05720"> </A>
<A NAME="toc_fb12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.    <BR>


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    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    <BR>        <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>To the Board of Directors of<BR>
Isola Group, S.a.r.l. and subsidiaries<BR>
Chandler, Arizona </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
have audited the accompanying consolidated balance sheets of Isola Group, S.a.r.l. and subsidiaries (the "Company") as of January&nbsp;1, 2011 and December&nbsp;26, 2009, and the related
consolidated statements of operations, stockholder's deficiency and comprehensive income (loss), and cash flows for the years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and
December&nbsp;27, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control
over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Isola Group, S.a.r.l. and subsidiaries as of January&nbsp;1, 2011 and
December&nbsp;26, 2009, and the results of their operations and their cash flows for the years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, in conformity
with accounting principles generally accepted in the United States of America. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>/S/
DELOITTE&nbsp;&amp; TOUCHE&nbsp;LLP<BR>
Phoenix, Arizona<BR>
September&nbsp;23, 2011 </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-2 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fc12701_isola_group_s.a.r.l._and_subsi__iso05494"> </A>
<A NAME="toc_fc12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.    <BR>


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    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>CONSOLIDATED BALANCE SHEETS    <BR>    <BR>  As of January 1, 2011 and December 26, 2009    <BR>        <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:times;"></TD>
<TD WIDTH="9pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands, except for share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>ASSETS</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CURRENT ASSETS:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,733</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>38,932</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restricted cash</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,461</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accounts receivable&#151;net of allowance for doubtful accounts of $3,896 and $3,823 at January&nbsp;1, 2011 and December&nbsp;26, 2009,
respectively</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>103,489</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>95,326</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other receivables</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,739</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,815</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Inventories</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>45,066</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,595</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred tax assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,697</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,785</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Prepaid expenses and other current assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,909</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total current assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>201,208</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>178,362</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>RESTRICTED CASH</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,886</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,678</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>PROPERTY, PLANT, AND EQUIPMENT&#151;Net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>139,597</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>142,940</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>INTANGIBLE ASSETS&#151;Net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,421</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,670</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>DEFERRED TAX ASSETS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,747</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,583</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>DEBT ISSUANCE COSTS AND OTHER ASSETS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,335</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,619</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL ASSETS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>377,194</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>357,852</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>LIABILITIES AND STOCKHOLDER'S DEFICIENCY</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CURRENT LIABILITIES:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accounts payable</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>70,156</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>72,965</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Short-term debt and current portion&#151;long-term debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21,084</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>316,582</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>38,964</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>82,809</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred tax liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>277</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,449</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,122</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,656</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>131,603</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>480,461</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>LONG-TERM DEBT&#151;Net of current portion</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>292,079</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CONVERTIBLE PREFERRED CERTIFICATES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>199,136</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>176,595</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CAPITAL LEASE OBLIGATIONS&#151;Net of current portion</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14,468</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>16,408</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>EMBEDDED DERIVATIVE</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>66,395</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>PENSION AND OTHER RETIREMENT BENEFITS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>42,532</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35,129</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>UNCERTAIN TAX POSITIONS AND OTHER LIABILITIES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23,446</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,615</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>DEFERRED TAX LIABILITIES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,099</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>489</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>774,758</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>756,210</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>COMMITMENTS AND CONTINGENCIES (Note&nbsp;8)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>STOCKHOLDER'S DEFICIENCY:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Common stock, 25&nbsp;Euro par value ($31)&#151;500 shares authorized, issued, and outstanding</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Additional paid-in capital</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>30,652</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28,160</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated deficit</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(394,602</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(399,684</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated other comprehensive loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(33,629</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(26,849</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total stockholder's deficiency</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(397,564</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(398,358</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>377,194</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>357,852</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>See notes to consolidated financial statements. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-3 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fe12701_isola_group_s.a.r.l._and_subsi__iso07054"> </A>
<A NAME="toc_fe12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.    <BR>


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<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>CONSOLIDATED STATEMENTS OF OPERATIONS    <BR>    <BR>  For the fiscal years ended January 1, 2011, December 26, 2009, and December&nbsp;27,&nbsp;2008    <BR>        <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:times;"></TD>
<TD WIDTH="9pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;27,<BR>
2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=12 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands, except for share<BR>
and per share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>REVENUES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>611,987</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>416,140</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>570,333</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>COST OF GOODS SOLD</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>467,751</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>330,584</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>487,052</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>GROSS PROFIT</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>144,236</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>85,556</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>83,281</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>OPERATING EXPENSES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Sales, general, and administrative</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>65,271</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>59,656</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>62,763</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Research and development</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,532</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,244</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,663</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,782</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18,129</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,692</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Goodwill impairment</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>79,585</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>87,029</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>89,631</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>OPERATING INCOME / (LOSS)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>64,651</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,473</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6,350</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>OTHER INCOME&#151;Net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,020</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>224</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,768</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>EMBEDDED DERIVATIVE GAIN / (LOSS)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25,030</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(27,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>115,352</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>INTEREST EXPENSE</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(72,134</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(54,620</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(58,478</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>INTEREST INCOME</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>339</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>453</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,307</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>FOREIGN EXCHANGE GAIN / (LOSS)&#151;Net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,596</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,116</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(341</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>INCOME / (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>29,502</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(85,045</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>54,258</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>PROVISION FOR INCOME TAXES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(24,420</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6,504</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6,804</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>NET INCOME / (LOSS) FROM CONTINUING OPERATIONS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(91,549</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>47,454</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>LOSS FROM DISCONTINUED OPERATIONS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(9,177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(11,655</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>NET INCOME / (LOSS)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(100,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35,799</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>NET INCOME / (LOSS) PER COMMON SHARE</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Continuing operations</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.16</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(183.10</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>94.91</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Discontinued operations</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(18.35</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(23.31</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.16</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(201.45</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>71.60</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>WEIGHTED AVERAGE NUMBER OF COMMON AND POTENTIAL COMMON SHARES OUTSTANDING</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>PRO FORMA NET INCOME / (LOSS) PER ORDINARY SHARE (unaudited)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>WEIGHTED AVERAGE NUMBER OF ORDINARY AND POTENTIAL ORDINARY SHARES USED IN COMPUTING PRO FORMA NET INCOME / (LOSS) PER SHARE (unaudited)
</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>See notes to consolidated financial statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-4 </B></FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=167,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=3405,FOLIO='F-4',FILE='DISK108:[11ZAS1.11ZAS12701]FE12701A.;40',USER='KSEAMON',CD='29-OCT-2011;20:20' -->
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NAME="page_fg12701_1_5"> </A>


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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fg12701_isola_group_s.a.r.l._and_subsi__iso08758"> </A>
<A NAME="toc_fg12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.    <BR>

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    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIENCY AND COMPREHENSIVE INCOME (LOSS)    <BR>    <BR>  For the fiscal years ended January 1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008
    <BR>        <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=1>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="35pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="78pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Common stock </B></FONT></TH>
<TH ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Additional<BR>
paid-in<BR>
capital</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Accumulated<BR>
other<BR>
comprehensive<BR>
loss</B></FONT><BR></TH>
<TH ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
stockholder's<BR>
deficiency</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Accumulated<BR>
deficit</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Shares</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=22 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands, except for share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>BALANCE&#151;December&nbsp;29, 2007</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>25,181</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(334,757</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(14,892</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(324,453</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Stock-based compensation</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,222</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,222</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Comprehensive income:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Net income</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>35,799</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>35,799</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Other comprehensive gain / (loss) after tax:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Foreign currency translation adjustment</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,349</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,349</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Changes in unamortized benefit plan costs (including tax of $493)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(20,475</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(20,475</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Total comprehensive income</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>20,673</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>BALANCE&#151;December&nbsp;27, 2008</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>26,403</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(298,958</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(30,018</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(302,558</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(Continued) </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-5 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=168,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=269478,FOLIO='F-5',FILE='DISK108:[11ZAS1.11ZAS12701]FG12701A.;34',USER='KSEAMON',CD='29-OCT-2011;20:21' -->
<A NAME="page_fg12701_1_6"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIENCY AND COMPREHENSIVE INCOME (LOSS) (Continued)<BR>
For the fiscal years ended January 1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008 </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=1>


<!-- COMMAND=ADD_TABLEWIDTH,"140%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="35pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="78pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Common stock </B></FONT></TH>
<TH ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Additional<BR>
paid-in<BR>
capital</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Accumulated<BR>
other<BR>
comprehensive<BR>
loss</B></FONT><BR></TH>
<TH ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
stockholder's<BR>
deficiency</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Accumulated<BR>
deficit</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Shares</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=22 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands, except for share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>BALANCE&#151;December&nbsp;27, 2008</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>26,403</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(298,958</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(30,018</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(302,558</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Stock-based compensation</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,757</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,757</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Comprehensive loss:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Net loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(100,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(100,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Other comprehensive gain / (loss) after tax:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Foreign currency translation adjustment</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(2,827</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(2,827</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Changes in unamortized benefit plan costs (including tax of $476)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,996</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,996</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Total comprehensive loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(97,557</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>BALANCE&#151;December&nbsp;26, 2009</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>28,160</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(399,684</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(26,849</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(398,358</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(Continued) </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-6 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=169,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=710956,FOLIO='F-6',FILE='DISK108:[11ZAS1.11ZAS12701]FG12701A.;34',USER='KSEAMON',CD='29-OCT-2011;20:21' -->
<A NAME="page_fg12701_1_7"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIENCY AND COMPREHENSIVE INCOME (LOSS) (Continued)<BR>
For the fiscal years ended January 1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008 </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=1>


<!-- COMMAND=ADD_TABLEWIDTH,"140%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="35pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="78pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Common stock </B></FONT></TH>
<TH ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Additional<BR>
paid-in<BR>
capital</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Accumulated<BR>
other<BR>
comprehensive<BR>
loss</B></FONT><BR></TH>
<TH ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
stockholder's<BR>
deficiency</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Accumulated<BR>
deficit</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Shares</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=23 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands, except for share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>BALANCE&#151;December&nbsp;26, 2009</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>28,160</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(399,684</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(26,849</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(398,358</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Capital contribution</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>577</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>577</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Stock-based compensation</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,915</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,915</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Comprehensive loss:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Net income</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Other comprehensive gain / (loss) after tax:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Foreign currency translation adjustment</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,804</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,804</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Changes in unamortized benefit plan costs (net of tax of $77)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(8,584</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(8,584</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Total comprehensive loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,698</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>BALANCE&#151;January&nbsp;1, 2011</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>30,652</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(394,602</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(33,629</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(397,564</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(Concluded) </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>See notes to consolidated financial statements. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-7 </B></FONT></P>

<HR NOSHADE>
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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

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NAME="fi12701_isola_group_s.a.r.l._and_subsi__iso07027"> </A>
<A NAME="toc_fi12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.    <BR>


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    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>CONSOLIDATED STATEMENTS OF CASH FLOWS    <BR>    <BR>  For the fiscal years ended January 1, 2011, December 26, 2009, and December&nbsp;27,&nbsp;2008    <BR>        <BR>    </B></FONT></P>
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<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;27,<BR>
2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>CASH FLOWS FROM OPERATING ACTIVITIES:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Net income / (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(100,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>35,799</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Adjustments to reconcile net income / (loss) to cash used in operating activities:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Depreciation and amortization</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>16,937</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>19,837</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>23,772</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Provision for doubtful accounts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>87</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>588</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6,710</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Change in fair value of derivatives</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(25,091</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>26,392</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(111,582</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Foreign currency translation</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(12,087</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(2,772</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,995</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Impairment of property, plant and equipment</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,122</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,338</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Impairment of goodwill</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Deferred income taxes</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,896</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,416</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,789</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Amortization and write-off of debt issuance costs</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,629</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,173</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Accreted interest on notes to stockholder</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(68</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(233</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Accreted interest on debt and amortization of discount</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,900</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Accreted interest on convertible preferred certificates and amortization of discount</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10,636</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10,454</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>15,079</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Stock-based compensation expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,219</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,757</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,222</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Loss from disposal of discontinued operations</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,037</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Gain on dispositions</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(484</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(224</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(2,797</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Change in operating assets and liabilities:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Accounts receivable</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(6,702</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(8,081</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>33,288</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Other receivables</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>44</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>13</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(176</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Inventories</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(9,006</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,099</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>14,408</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Prepaid expenses and other current assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(450</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>130</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,753</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Debt issuance costs and other assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,434</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,390</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,420</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Accounts payable</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(3,711</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(17,254</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(39,541</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Accrued liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(44,770</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>42,688</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(8,895</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Other current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>56</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,384</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,495</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Pension and other postretirement employee benefits</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,122</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,077</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(949</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Uncertain tax positions and other liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(977</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(4,328</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(3,850</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Net cash used in operating activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(55,348</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(15,099</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(16,837</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>CASH FLOWS FROM INVESTING ACTIVITIES:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Proceeds from release of restricted cash</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,007</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,272</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,466</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Payments for restricted cash</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(3,396</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(821</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Payments for acquisition of property, plant, and equipment</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(15,681</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(6,200</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(11,285</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Proceeds from dispositions</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,396</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>350</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,882</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Net cash used in investing activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(9,278</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(6,974</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(3,758</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>CASH FLOWS FROM FINANCING ACTIVITIES:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Proceeds from financing transactions (Note&nbsp;4)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>376,393</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Proceeds from debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>16,951</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>30,703</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>77,138</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Payments of debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(312,926</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(45,092</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(66,338</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Payments of debt issuance costs</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(19,215</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(3,329</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Proceeds from capital contributions</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>577</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Proceeds from note receivable&#151;stockholder</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,349</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Payments of capital leases</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(839</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,032</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(1,713</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Payments for surrendered options</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(299</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Net cash provided by / (used in) financing activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>60,642</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(13,072</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,758</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>EFFECT OF EXCHANGE RATES ON CASH</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,785</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>357</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>NET DECREASE IN CASH</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(2,199</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(35,152</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>(14,480</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>CASH&#151;Beginning of year</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>38,932</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>74,084</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>88,564</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>CASH&#151;End of year</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>36,733</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>38,932</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>74,084</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Cash payments during the year for:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Interest</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>94,999</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>7,493</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>29,499</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>Income taxes</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>10,936</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>8,378</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>11,112</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1> </FONT><FONT SIZE=1>SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING TRANSACTIONS&#151;Acquisition of fixed assets with a corresponding increase in accounts
payable</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,270</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>598</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,049</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=2>See notes to consolidated financial statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-8 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fk12701_isola_group_s.a.r.l._and_subsi__iso08305"> </A>
<A NAME="toc_fk12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.    <BR>

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    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    <BR>    <BR>  As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>  January 1, 2011, December 26, 2009, and December 27, 2008
      <BR>        <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fk12701_1._organization_and_summary_of__1._02423"> </A>
<A NAME="toc_fk12701_2"> </A></FONT> <FONT SIZE=2><B>  1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Nature of business</B></FONT><FONT SIZE=2>&#151;Isola Group, S.a.r.l. (the "Company") is a holding company incorporated in Luxembourg whose subsidiaries manufacture and sell laminate products
across Europe, Asia, and the United States of America. Corporate headquarters are located in Chandler, Arizona. The Company is a wholly owned subsidiary of TPG Hattrick Partners,&nbsp;L.P. ("TPG" or
the "sole stockholder"). </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company and certain of its subsidiaries were incorporated by TPG. TPG is a U.S. based limited partnership that was originally funded through the cash investments of two private equity funds
affiliated with TPG and Redfern Partners, which is an affiliate of Insulectro, one of the Company's largest customers (see Note&nbsp;13). </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Reorganization</B></FONT><FONT SIZE=2>&#151;On September&nbsp;20, 2011, TPG formed a new company, Isola Group&nbsp;Ltd., in the Cayman Islands. Isola Group&nbsp;Ltd. has been authorized
by its board of directors to file&nbsp;a registration statement with the Securities and Exchange Commission ("SEC") permitting it to sell its ordinary shares in an initial public offering ("IPO").
Prior to the IPO the Company will undergo a corporate reorganization that will include the following steps: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>all
of the outstanding securities of the Company, including common shares and convertible preferred certificates, will be contributed by TPG to Isola
Group&nbsp;Ltd., which will result in Isola Group&nbsp;Ltd. becoming our new holding company and the Company becoming a subsidiary of Isola Group&nbsp;Ltd.;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>TPG
, and TPG's general partner, TPG Hattrick Holdco,&nbsp;LLC, will be liquidated and the ordinary shares of Isola Group&nbsp;Ltd. will be distributed to their
investors; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>all
outstanding stock based awards associated with TPG will be terminated and replaced with new awards for ordinary shares of Isola Group&nbsp;Ltd. that have the
same value and substantially the same terms. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Collectively
we refer to the above transactions as the "Reorganization." The pro forma impact of the Reorganization is discussed further in Note&nbsp;16 to the consolidated financial statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Basis of Presentation and Consolidation</B></FONT><FONT SIZE=2>&#151;The consolidated financial statements consist of the accounts of the Company and subsidiaries and reflect the Company's
financial position as of January&nbsp;1, 2011 and December&nbsp;26, 2009, and results of operations and cash flows for the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and
December&nbsp;27, 2008. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S.&nbsp;GAAP"). All intercompany balances and
transactions have been eliminated. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company operates and reports financial results on a fiscal year of 52 or 53&nbsp;weeks. The 2010 fiscal year consisted of 53&nbsp;weeks and ended on January&nbsp;1, 2011. The 2009 and 2008
fiscal years consisted of 52&nbsp;weeks and ended on December&nbsp;26, 2009 and December&nbsp;27, 2008, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Events
that occurred after January&nbsp;1, 2011 and through September&nbsp;23, 2011, the date the financial statements were available to be issued, were considered in the preparation of these
financial statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Use of Estimates and Assumptions</B></FONT><FONT SIZE=2>&#151;The preparation of financial statements in conformity with U.S.&nbsp;GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting year. Significant items subject to such </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-9 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>estimates
and assumptions include, but are not limited to, the useful lives of fixed assets and definite lived intangible assets, allowances for doubtful accounts, the valuation of derivative
instruments, the valuation of deferred tax assets, the initial and recurring valuation of certain assets acquired through business combinations (including goodwill and indefinite lived intangible
assets), stock-based compensation, reserves for employee benefit obligations, income tax uncertainties and other
contingencies. Actual results could differ from these estimates under different assumptions or conditions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Foreign Currency Transactions and Translation</B></FONT><FONT SIZE=2>&#151;The Company's functional currency and reporting currency is the U.S. dollar. Gains and losses from foreign currency
transactions are included in the consolidated statement of operations in the period they occur. Foreign currency transaction gains and losses, unrealized translation gains and losses associated with
certain foreign subsidiaries with a U.S. dollar functional currency that maintain their books of record in a currency other than the U.S. dollar and unrealized translation gains and losses on
short-term intercompany and operating receivables and payables denominated in a currency other than the functional currency are included in foreign exchange gains and losses in the
consolidated statements of operations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the purposes of presenting consolidated financial statements, the assets and liabilities of the Company's foreign operations where the local currency is also the functional currency are translated
into U.S. dollars using exchange rates prevailing at the end of each reporting period. Revenue and expense items are translated at the average exchange rates for the period. Exchange differences
arising, if any, are recognized as foreign currency translation gains and losses in other comprehensive loss on the consolidated balance sheet. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Cash Equivalents and Restricted Cash</B></FONT><FONT SIZE=2>&#151;The Company considers all highly liquid debt investments with a maturity of three months or less when purchased to be cash
equivalents. These investments are stated at cost, which approximates market value. Restricted cash represents bank balances pledged as collateral, primarily for an entrustment loan held by the
Company's subsidiary in Dalian, China. The loan is denominated in Chinese Renminbi. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Accounts Receivable</B></FONT><FONT SIZE=2>&#151;The Company's accounts receivable are recorded at cost on the balance sheet, net of allowances. Credit is extended based on an evaluation of the
customer's financial condition and, generally, collateral is not required. Credit risk associated with the Company's accounts receivable is mitigated by ongoing credit evaluations of customers and
frequent contact with customers, especially the most significant, which enables the Company to monitor changes in its customers' business operations and respond accordingly. The Company estimates
credit risk associated with accounts receivable by analyzing the creditworthiness of its customers based on past experience, changes in customer demand, as well as the general economy and the industry
as a whole. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Allowance for Doubtful Accounts</B></FONT><FONT SIZE=2>&#151;The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In
establishing the required
allowance, management considers historical losses, current receivables aging, general and specific economic conditions, and local market conditions. The Company reviews its allowance for doubtful
accounts monthly. Past due balances meeting certain criteria are reviewed individually for collectability. All other balances are reviewed on a pooled basis. Account balances are charged off against
the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company does not have any off-balance-sheet credit exposure related to its customers. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-10 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Inventories</B></FONT><FONT SIZE=2>&#151;Inventories include the cost of materials, direct labor, and related manufacturing overhead and are stated at the lower of cost (computed using the
first-in, first-out method) or market. The Company adjusts inventory for estimated obsolescence or excess quantities based upon assumptions about future demand and market
conditions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Property, Plant, and Equipment</B></FONT><FONT SIZE=2>&#151;Property, plant, and equipment obtained through acquisitions are recorded at fair value. All other property, plant, and equipment
acquisitions are recorded at cost. Provisions for depreciation are calculated using the straight-line method over the following estimated useful lives of the assets: </FONT></P>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Years</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Buildings and improvements</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15&#150;40</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Machinery and equipment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2&#150;15</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Assets held under capital leases are depreciated over their expected useful lives on the same basis as owned assets. If there is not reasonable certainty that
the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the lease term or its estimated useful life. Leasehold improvements are depreciated over
the estimated useful life of the related asset, or over the term of the lease, whichever is shorter. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Assets Held for Sale</B></FONT><FONT SIZE=2>&#151;In accordance with Accounting Standards Codification ("ASC") 360, </FONT><FONT SIZE=2><I>Property, Plant, and
Equipment</I></FONT><FONT SIZE=2> ("ASC&nbsp;360"), the Company classifies assets and liabilities as held for sale when management, having the authority to approve the action, commits to a plan to
sell the asset, the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, an active program to locate a buyer and
other actions required to complete the plan to sell the asset have been initiated, the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed
sale within one year. The carrying value of the assets held for sale are then recorded at the lower of their carrying value or fair value, less costs to sell. The Company did not have any assets
classified as held for sale as of January&nbsp;1, 2011. Net assets held for sale as of December&nbsp;26, 2009, consist of land and buildings in Tao Yuan, Taiwan, which total $3.7&nbsp;million
and are included in debt issuance costs and other assets in the consolidated balance sheet. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Long-lived Assets</B></FONT><FONT SIZE=2>&#151;The Company reviews long-lived assets such as property, plant, and equipment, and acquired intangible assets subject to
amortization for impairment whenever events and circumstances indicate that the carrying amount may not be recoverable. In performing the review for recoverability, the Company estimates the future
undiscounted cash flows expected to result from the use of the assets and their eventual disposition, in accordance with ASC&nbsp;360. If an asset were deemed impaired, the amount of the impairment
loss would be calculated based on the excess of the carrying amount of the asset over the estimated fair value. Fair value is determined through various valuation techniques including discounted cash
flow models, market comparables and other information, as considered necessary. Impairment losses are recorded to expense in the period in which they are identified. During fiscal years 2009 and 2008,
the Company recorded $4.1&nbsp;million and $3.3&nbsp;million, respectively, in asset impairments associated with the closure of manufacturing facilities, which are included in the consolidated
statement of operations in restructuring. The estimation of future cash flows requires significant estimates of factors that include future sales growth and gross margin performance. If the Company's
sales growth, gross margin performance or other estimated operating results are not achieved at or above their forecasted level, the </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-11 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>carrying
value of asset groups may prove to be unrecoverable and the Company may incur impairment charges in the future. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Intangible
assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense for the fiscal years ended January&nbsp;1, 2011, December&nbsp;26,
2009, and December&nbsp;27, 2008, was $1.3&nbsp;million, $1.6&nbsp;million, and $1.9&nbsp;million, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Goodwill and Other Intangible Assets</B></FONT><FONT SIZE=2>&#151;The Company accounts for goodwill and other intangible assets with indefinite lives in accordance with ASC&nbsp;350, </FONT> <FONT SIZE=2><I>Goodwill and Other
Intangible Assets</I></FONT><FONT SIZE=2> ("ASC&nbsp;350"). Goodwill represents the excess of the purchase price over the fair value of the net tangible
and identifiable intangible assets acquired in a business combination and is not subject to amortization. ASC&nbsp;350 requires that goodwill be tested for impairment at least annually, or more
often if warranted by events and changes in circumstances indicating that the carrying value may exceed its fair value, and written down to fair value if impaired. The Company's testing approach
utilized a discounted cash flow analysis and comparative market multiples to determine each reporting unit's fair value for comparison to its carrying value. As the Company's carrying value exceeded
its estimated fair value as of December&nbsp;27, 2008, the Company applied the approach prescribed in ASC&nbsp;350-20 for determining the impairment amount. The results of
ASC&nbsp;350 impairment testing in 2008 indicated that the Company's goodwill balance was impaired and as a consequence, the Company reduced its goodwill balance by $8.5&nbsp;million. The noncash
charge of $8.5&nbsp;million was due primarily to a reduction in business related to the general decline of the global economy. The carrying value of goodwill was zero thereafter. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Debt Issuance Costs and Discounts</B></FONT><FONT SIZE=2>&#151;Debt issuance costs and discounts are capitalized and amortized over the term of the related debt using the effective interest
method. Upon the extinguishment of the related debt, any unamortized debt issuance costs and discounts are immediately expensed. Unamortized debt issuance costs were $18.3&nbsp;million and
$3.7&nbsp;million at January&nbsp;1, 2011 and December&nbsp;26, 2009, respectively, and are included in other assets in the consolidated balance sheets. In fiscal 2010 and 2008, the Company
wrote off $2.8&nbsp;million and $4.2&nbsp;million of previously recorded deferred financing costs, respectively. Amortization of debt discounts are further discussed in Note&nbsp;4. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Fair Value Measurements</B></FONT><FONT SIZE=2>&#151;The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the
financial statements on a recurring or nonrecurring basis. Fair value is defined as the amount that would be received from selling an asset or the amount that would be paid to settle a liability in an
orderly transaction between willing market participants in the primary or most advantageous market for that asset or liability. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company's financial instruments that are recognized and disclosed at fair value on a recurring basis are comprised primarily of derivative instruments, which include interest rate swaps and
embedded derivative instruments. The Company accounts for derivative instruments in accordance with the provisions of ASC&nbsp;815, </FONT><FONT SIZE=2><I>Derivative Instruments and Hedging
Activities</I></FONT><FONT SIZE=2> ("ASC&nbsp;815"). ASC&nbsp;815 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in
other contracts and hedging activities. ASC&nbsp;815 requires the Company to record derivatives at their fair value on the balance sheet. At January&nbsp;1, 2011 and December&nbsp;26, 2009, the
Company had embedded derivatives in its Convertible Preferred Certificates (see Note&nbsp;5) and in its senior secured credit agreement and mezzanine credit agreement (see Note&nbsp;4). Changes in
the fair value of these embedded derivatives are recorded in the consolidated statements of operations. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-12 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Certain
nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis, including property, plant, and equipment, goodwill, and intangibles assets. These assets are not
measured at fair value on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. A description of the valuation
methodologies used for assets and liabilities measured at fair value, including the general classification of such assets and liabilities pursuant to the valuation hierarchy, is included in each
footnote with fair value measurement present. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company's principal financial instruments are cash, trade receivables, bank lines of credit, short-term bank debt, trade payables and other accrued liabilities,
long-term debt, including convertible preferred certificates, and derivative instruments. With the exception of the Company's derivative instruments, which are recorded at fair value, and
the Company's long-term debt and convertible preferred certificates, the carrying value of these financial instruments approximates fair value either because of the short maturities of
these instruments, or because the interest rates are based upon variable reference rates. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
fair value of the Company's long-term debt is computed based upon interest rates of similar debt instruments. The Company engaged a third-party consultant to assist in the
determination of the estimated fair value of the Company's long-term debt and Convertible Preferred Certificates. As the Company was in default with respect to its debt as of
December&nbsp;26, 2009, it was impractical to estimate its fair value at that time. See Note&nbsp;5, Convertible Preferred Certificates, for a further discussion regarding the Company's process
for estimating fair value with respect to the Convertible Preferred Certificates. The carrying amount and the fair value of the Company's long-term debt and convertible preferred
certificates are as follows (in millions): </FONT></P>
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<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="79pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="96pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26, 2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Long-term debt:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Carrying amount</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>292.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>331.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Convertible preferred certificates:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Carrying amount</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>199.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>176.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>161.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>82.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Accounting for Income Taxes</B></FONT><FONT SIZE=2>&#151;The Company accounts for income taxes under the asset and liability method under ASC&nbsp;740, </FONT><FONT SIZE=2><I>Income
Taxes</I></FONT><FONT SIZE=2> ("ASC&nbsp;740"), which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in
the financial statements. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are
measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company is required to adjust its deferred tax assets and liabilities
in the period when tax rates or the provisions of the income tax laws are enacted. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Deferred
tax assets are recorded to the extent these assets are more likely than not to be realized. In making such determination, the Company considers all available positive and negative evidence,
including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-13 </B></FONT></P>

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<A NAME="page_fk12701_1_14"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>and
recent financial operations. Valuation allowances are recognized to reduce deferred tax assets if it is determined to be more likely than not that all or some of the potential deferred assets will
not be realized. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company follows ASC&nbsp;740-10, </FONT><FONT SIZE=2><I>Income Taxes</I></FONT><FONT SIZE=2> ("ASC&nbsp;740-10"), which clarifies the accounting for uncertainty in
income taxes recognized in the financial statements. ASC&nbsp;740-10 provides that a tax benefit from an uncertain tax position may be recognized based on the technical merits when it is
more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes. Income tax positions must meet a more likely than not
recognition threshold at the effective date to be recognized upon the adoption of ASC&nbsp;740-10 and in subsequent periods. This standard also provides guidance on measurement,
derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Pension Plans</B></FONT><FONT SIZE=2>&#151;The Company sponsors several pension plans that include qualified, noncontributory nonunion pension plans for certain salaried and hourly employees,
and bargaining unit pension plans covering retirees and vested former employees of the Company. The Company uses a December&nbsp;31 measurement date for its pension and other postretirement employee
benefit plans. The U.S. pension plans were frozen and curtailed prior to the 2004 acquisition of the Company. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Revenue Recognition</B></FONT><FONT SIZE=2>&#151;Revenue is recognized and earned when all of the following criteria are satisfied: (a)&nbsp;persuasive evidence of a sales arrangement exists;
(b)&nbsp;price is fixed or determinable; (c)&nbsp;collectibility is reasonably assured; and (d)&nbsp;title and the risks and rewards of ownership have substantially transferred to the customer.
For a majority of the Company's sales transactions, revenue is recognized upon shipment of the finished product. Some shipping terms require the goods to be received by the customer before title
passes. In those instances, revenues are not recognized until the customer has received the goods. The Company's sales arrangements do not provide for post-shipment obligations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Shipping and Handling Costs</B></FONT><FONT SIZE=2>&#151;The Company classifies shipping and handling costs as a part of cost of goods sold. Amounts billed to customers for shipping and
handling costs are included in revenues. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Certain Risks and Concentrations</B></FONT><FONT SIZE=2>&#151;Cash is maintained with several financial institutions. Deposits held with banks can exceed the amount of insurance provided on
such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear minimal credit risk. The Company maintains
its primary cash accounts with established banking institutions around the world. The Company estimates that approximately $25.4&nbsp;million of these deposits were not insured by the Federal
Deposit Insurance Corporation or similar entities outside of the United States as of January&nbsp;1, 2011. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company sells a significant amount of its products through intermediaries, such as distributors. Revenue from sales to distributors represented 10.4%, 10.1%, and 9.9% of total revenues for the
fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, respectively. If one of the Company's significant distributors terminates its distribution agreement,
the Company could experience a significant interruption in the distribution of its products. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Concentration
of credit risk with respect to the Company's trade receivables is limited by an ongoing credit evaluation process and the geographical dispersion of sales transactions. Collateral is
generally not required </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-14 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>from
the Company's customers. The allowance for doubtful accounts is based upon the expected collectability of all trade receivables. The Company had two customers that accounted for 27.6% of the
outstanding receivables at January&nbsp;1, 2011, and two customers that accounted for 28.8% of the outstanding trade receivables at December&nbsp;26, 2009. The Company also had one customer that
accounted for 12.8%, 11.9%, and 14.9% of revenues for the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Contingencies</B></FONT><FONT SIZE=2>&#151;The Company is subject to a range of claims, lawsuits and administrative proceedings that arise in the ordinary course of business. The Company
accrues a liability and charges expense on the statement of operations for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated, in accordance
with the recognition criteria of ASC Topic&nbsp;450, </FONT><FONT SIZE=2><I>Contingencies</I></FONT><FONT SIZE=2> ("ASC&nbsp;450"). Estimating liabilities and costs associated with these
matters requires significant judgment and assessment based upon the professional knowledge and experience of management and its legal counsel. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Stock-based Compensation</B></FONT><FONT SIZE=2>&#151;Effective January&nbsp;1, 2006, the Company adopted the fair value method of accounting for stock-based compensation to employees in
accordance with ASC&nbsp;718, </FONT><FONT SIZE=2><I>Compensation&#151;Stock Compensation</I></FONT><FONT SIZE=2> ("ASC&nbsp;718"). Under the fair value recognition provisions of
ASC&nbsp;718, the Company recognizes stock-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award. The fair value method requires companies
to estimate the fair value of stock-based payment awards on the grant date using an option pricing model. The Company adopted the fair value method using the prospective method which requires
nonpublic entities that used the minimum value method for either pro forma or financial statement recognition purposes to apply the fair value method to stock-based awards issued on and after the date
of adoption. Prior to the adoption of the fair value method, the Company accounted for stock-based compensation using the minimum-value method for financial statement recognition purposes. For awards
that have not yet vested but were granted prior to the adoption of the fair value method, the Company continues to recognize stock-based compensation expense under the minimum value method. In
addition, the Company continues to amortize any stock-based compensation from awards granted prior to January&nbsp;1, 2006 and stock-based compensation from awards granted or modified after
January&nbsp;1, 2006 on a straight-line basis over the service period. The Company has elected to use the "with and without" approach in determining the order in which tax attributes are
utilized. As a result, the Company will only recognize a tax benefit from stock-based awards in additional paid-in capital if an incremental tax benefit is realized after all other tax
attributes currently available to the Company have been utilized. For the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, the Company incurred
stock-based compensation expense of $2.2&nbsp;million, $1.8&nbsp;million, and $1.2&nbsp;million, respectively. The Company's stock-based compensation awards are more fully described in
Note&nbsp;9. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Accumulated Other Comprehensive Loss</B></FONT><FONT SIZE=2>&#151;As of January&nbsp;1, 2011, the Company's accumulated other comprehensive loss consisted of a cumulative foreign currency
translation loss of $12.2&nbsp;million, a cumulative loss related to foreign currency impact from changes in uncertain tax positions of $0.9&nbsp;million, and a cumulative loss from unamortized
benefit plan costs of $20.5&nbsp;million, which is net of tax effect of $0.4&nbsp;million. As of December&nbsp;26, 2009, the Company's accumulated other comprehensive loss consisted of a
cumulative foreign currency translation loss of $14.0&nbsp;million, a cumulative loss related to foreign currency impact from changes in uncertain tax positions of $0.9&nbsp;million, and a
cumulative loss from unamortized benefit plan costs of $11.9&nbsp;million, which is net of tax effect of $0.3&nbsp;million. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-15 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Recent Accounting Pronouncements</B></FONT><FONT SIZE=2>&#151;Changes to generally accepted accounting principles are established by the Financial Accounting Standards Board ("FASB") in the
form of accounting standards updates ("ASU") to the FASB's Accounting Standards Codification. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or not expected to have an immaterial impact on the
Company's consolidated financial position and results of operations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
January 2010, the FASB issued ASU No.&nbsp;2010-06, </FONT><FONT SIZE=2><I>Fair Value Measurements and Disclosures (Topic&nbsp;820)&#151;Improving Disclosures About Fair
Value Measurements</I></FONT><FONT SIZE=2> ("ASU&nbsp;2010-06"). ASU&nbsp;2010-06 requires new disclosures regarding significant transfers in and out of Levels&nbsp;1 and
2, as well as information about activity in Level&nbsp;3 fair value measurements, including presenting information about purchases, sales, issuances and settlements on a gross versus a net basis in
the Level&nbsp;3 activity roll forward. In addition, ASU&nbsp;2010-06 clarifies existing disclosures regarding input and valuation techniques, as well as the level of disaggregation
for each class of assets and liabilities. ASU No.&nbsp;2010-06 is effective for interim and annual periods beginning after December&nbsp;15, 2009, except for the disclosures pertaining
to purchases, sales, issuances and settlements in the roll forward of Level&nbsp;3 activity; those disclosures are effective for interim and annual periods beginning after December&nbsp;15, 2010.
The adoption of ASU&nbsp;2010-06 in fiscal 2010 did not have a material impact on the Company's consolidated financial position, results of operations, or cash flows. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Standards Issued but Not Yet Effective</B></FONT><FONT SIZE=2>&#151;Other new pronouncements issued but not effective until after January&nbsp;1, 2011 are not expected to have a material
impact on the Company's consolidated financial statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-16 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><BR><FONT SIZE=2><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> <BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fm12701_2._selected_consolidated_balance_sheet_disclosures"> </A>
<A NAME="toc_fm12701_1"> </A></FONT> <FONT SIZE=2><B>  2. SELECTED CONSOLIDATED BALANCE SHEET DISCLOSURES    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following tables provide details of selected consolidated balance sheet items at January&nbsp;1, 2011 and December&nbsp;26, 2009 (in
millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Inventories:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Raw materials</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Work in process</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Finished goods</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total inventories</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>45.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>36.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Property, plant, and equipment:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Land</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>28.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>29.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Buildings and improvements</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>49.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>51.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Machinery and equipment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>143.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>137.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Construction in progress</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total property, plant, and equipment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>231.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>220.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less accumulated depreciation</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>91.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>77.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total property, plant, and equipment&#151;net</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>139.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>142.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued liabilities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Personnel related</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Management fees</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>44.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total accrued liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>39.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>82.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company capitalized interest expense incurred during the construction period for capital projects, primarily new machinery and equipment. Capitalized
interest was $0.8&nbsp;million and $0.3&nbsp;million for the fiscal years ended January&nbsp;1, 2011 and December&nbsp;26, 2009, respectively. Capitalized interest is included in property,
plant, and equipment in the consolidated balance sheets. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Depreciation
expense for the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, was approximately $15.6&nbsp;million, $18.2&nbsp;million, and
$21.9&nbsp;million, respectively. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-17 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=180,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=807915,FOLIO='F-17',FILE='DISK108:[11ZAS1.11ZAS12701]FM12701A.;31',USER='KSEAMON',CD='29-OCT-2011;18:58' -->
<A NAME="page_fm12701_1_18"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fm12701_3._intangible_assets"> </A>
<A NAME="toc_fm12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  3. INTANGIBLE ASSETS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Intangible assets consist of the following (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="41pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="41pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>January&nbsp;1, 2011 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Weighted<BR>
average<BR>
estimated<BR>
useful life</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Gross<BR>
amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Accumulated<BR>
amortization</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Net<BR>
amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=13 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Patented Technology</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(5.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Customer Relationship</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Trade Name</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(10.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> &nbsp;<BR>  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="41pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="41pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>December&nbsp;26, 2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Weighted<BR>
average<BR>
estimated<BR>
useful life</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Gross<BR>
amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Accumulated<BR>
amortization</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Net<BR>
amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=13 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Patented Technology</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Customer Relationship</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Trade Name</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(9.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The following is an expected amortization schedule for the intangible assets for fiscal year 2011 through fiscal year 2015 (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="28pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Fiscal years ending</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Amortization expense attributed to intangible assets was $1.3&nbsp;million, $1.6&nbsp;million, and $1.9&nbsp;million for the fiscal years ended
January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, respectively. Amortization is included in sales, general, and administrative expense on the consolidated statements of
operations. The Company found no indication of impairment of its intangible assets in fiscal years 2010, 2009, or 2008. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-18 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=181,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=449151,FOLIO='F-18',FILE='DISK108:[11ZAS1.11ZAS12701]FM12701A.;31',USER='KSEAMON',CD='29-OCT-2011;18:58' -->
<A NAME="page_fm12701_1_19"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fm12701_4._debt"> </A>
<A NAME="toc_fm12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  4. DEBT    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Debt at January&nbsp;1, 2011 and December&nbsp;26, 2009 consists of the following (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Senior notes payable under senior secured credit agreement&#151;secured, related party&#151;net of unamortized discount of $27.5&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>182.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Subordinated notes payable under mezzanine credit agreement&#151;unsecured, related party&#151;net of unamortized discount of
$69.0&nbsp;million</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>109.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>First-lien credit facility&#151;term loan</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>169.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>First-lien credit facility&#151;line of credit</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>31.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Second-lien credit facility&#151;term loan</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>95.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other debt&#151;unsecured</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Entrustment loan</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total debt outstanding</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>313.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>316.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current portion of long-term debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(21.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(316.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total long-term debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>292.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company is required to make debt service payments under the terms of its debt arrangements. The obligated debt principal payments for 2011 are
$21.1&nbsp;million. Future obligated debt principal payments are $210.0&nbsp;million in 2015 and $178.6&nbsp;million in 2016. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
December 2006, the Company's subsidiary, Isola USA Corp., entered into two credit facilities for an aggregate amount of $325.0&nbsp;million, which consisted of two term notes and a revolving line
of credit. The credit agreements were co-arranged through UBS Securities&nbsp;LLC and Goldman Sachs Credit Partners&nbsp;L.P. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
first-lien credit facility was for an aggregate amount of $230.0&nbsp;million, which consisted of a $190.0&nbsp;million term loan and a $40.0&nbsp;million revolving line of credit. There was
an outstanding balance of $169.1&nbsp;million against the term loan as of December&nbsp;26, 2009. The loan was for a period of six years and called for quarterly principal payments of
$0.5&nbsp;million unless prepayments were made to reduce such scheduled payments. The Company was obligated to make prepayments against the note for 75% of annual excess cash flow as defined in the
agreement. No payments were made in fiscal 2009 due to the event of default, which is discussed more fully later in this footnote. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company made elections as to the interest period term which could be one, two, three, or six months (or, if each affected lender so agreed, nine or 12&nbsp;months) and interest rates varied
based upon the loan type, which were defined as a Eurodollar (LIBOR) Loan or an Alternate Base Rate (ABR) Loan. The rates were also dependent upon the leverage ratio of the Company. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Effective
August 2008, the Company amended the first-lien credit facility due to the fact that the Company exceeded the maximum leverage ratio covenant of the first-lien credit facility. The principal
changes embodied in the amendment included increases to the interest spreads over LIBOR/ABR retroactive to June&nbsp;30, 2008. Also amended was the maximum total leverage ratio covenant, which was
increased for three fiscal quarters and then reverted to the original ratios. Included in the amendment were additional covenants requiring mandatory repayments of $6.25&nbsp;million on
September&nbsp;30, 2008, and again on </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-19 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_fm12701_1_20"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>December&nbsp;31,
2008, and payment of amendment fees in August 2008 equivalent to 1% of the outstanding indebtedness under the agreements to the consenting lenders. In accordance with the amended
first-lien, as of December&nbsp;26, 2009, the notes were accruing interest at the rate of 13.0%, which was equal to ABR plus 9.75%. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>At
December&nbsp;26, 2009, $31.9&nbsp;million of the $40.0&nbsp;million first-lien credit facility revolving line of credit was outstanding, which is included in short-term debt and
current portion long-term debt on the consolidated balance sheet. The borrowings against the line of credit had an interest period of six months from the date of borrowing after which the
Company could elect to extend the borrowing for an interest period term of one, two, three, or six months (or, if each affected lender so agreed, nine or 12&nbsp;months), and interest rates varied
based upon the loan type, which was defined as LIBOR or ABR. The rates were also dependent upon the leverage ratio of the Company. As of December&nbsp;26, 2009, the outstanding revolving borrowings
were accruing interest at the rate of 12.25%, which was equal to ABR plus 9.0%. Approximately $0.1&nbsp;million of the revolving line of credit was utilized for outstanding letters of credit as of
December&nbsp;26, 2009. The balance of the revolving line of credit was unavailable for use by the Company as of December&nbsp;26, 2009, due to an event of default on the first-lien, which is
described below. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
second-lien credit facility was a term loan for an aggregate amount of $95.0&nbsp;million. As of December&nbsp;26, 2009, there was an outstanding balance of $95.0&nbsp;million against the
note. The note was for a period of seven years and was subordinated to the first-lien loans. The Company made elections as to the interest period term which could be one, two, three, or six months
(or, if each affected lender so agreed, nine or 12&nbsp;months) and interest rates varied based upon the loan type, which was defined as a LIBOR or an ABR Loan. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Effective
August 2008, the Company amended the second-lien credit facility due to the fact that the Company exceeded the maximum leverage ratio covenant of the second-lien credit facility. The
principal changes embodied in the amendment included increases to the interest spreads over LIBOR/ABR retroactive to June&nbsp;30, 2008. Also amended was the maximum total leverage covenant, which
was increased for three fiscal quarters and then reverted to the original ratios. In accordance with the second-lien credit amendment, as of December&nbsp;26, 2009, the loan was accruing interest at
the rate of 17.75%, which was equal to ABR plus 14.5%. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Both
the first- and second-lien credit facilities, as originally issued and as amended, were secured by substantially all of the assets of the Company and were subject to various covenants including
financial covenants relating to (1)&nbsp;maximum leverage ratio (as defined) and (2)&nbsp;limitations on capital expenditures. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
January 2009, the Company was not in compliance with certain covenants associated with the amended first- and second-lien credit agreements. As a result, the Company entered into a forbearance
agreement with respect to the first-lien credit facility with the relevant financial institutions including UBS AG individually as a lender and as administrative agent for the lenders. The Company
also entered into a forbearance agreement with respect to the second-lien credit facility with the relevant financial institutions including Wilmington Trust FSB in its capacity as administrative
agent for the lenders as successor to Goldman Sachs Credit Partners&nbsp;L.P. In both forbearance agreements, the lenders and the administrative agents agreed to forebear from exercising their
rights and remedies arising from the defaults specified in the forbearance agreements during the forbearance period. Both forbearance agreements required the Company to comply with certain conditions
including the accrual of interest at the "default" interest rates specified in the first- and second-lien credit facilities, as amended. The use of the "default" interest rates </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-20 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_fm12701_1_21"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>resulted
in an additional 2% charge for interest. This additional 2% is included in the rates disclosed above as of December&nbsp;26, 2009. As of December&nbsp;26, 2009, the Company had accrued
interest in the amount of $44.7&nbsp;million, which is included in accrued liabilities on the consolidated balance sheet. Both forbearance agreements expired in May 2009 and the Company operated in
default of both amended credit agreements until September&nbsp;30, 2010, when the outstanding term loans under both the first- and second-lien credit facilities were paid in full using proceeds
obtained through new credit agreements as discussed below. The outstanding balance of the first- and second-lien credit agreements are included in short-term debt and current portion of
long-term debt on the consolidated balance sheet at December&nbsp;26, 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> New Credit Arrangements</B></FONT><FONT SIZE=2>&#151;On September&nbsp;30, 2010, the Company entered into a series of financing transactions including a senior secured credit agreement and a
mezzanine credit agreement, each entered into with a syndicate of lenders, the majority of which are partial owners in an entity that is the Company's sole stockholder (collectively "the New Credit
Arrangements"), as well as the issuance of 43,500,666 Class&nbsp;C Convertible Preferred Certificates issued to the Company's sole stockholder (collectively "the Financing Transaction"). The Company
received $376.4&nbsp;million in aggregate proceeds in connection with the Financing Transaction. The total proceeds were allocated among the instruments issued based upon the relative fair value of
each instrument at the time of issuance, as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="73pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>As of<BR>
September&nbsp;30,<BR>
2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Senior notes payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>181.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative&#151;senior notes payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Subordinated notes payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>104.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative&#151;subordinated notes payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Convertible preferred certificates&#151;Class&nbsp;C (Note&nbsp;5)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative&#151;convertible preferred certificates&#151;Class&nbsp;C (Note&nbsp;5)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>56.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total allocated value</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>376.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The borrower under the New Credit Arrangements is the Company's wholly owned subsidiary, Isola USA Corp. The principal terms of each credit arrangement are
described below. The Class&nbsp;C Convertible Preferred Certificates are discussed in Note&nbsp;5. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Senior Secured Credit Agreement</B></FONT><FONT SIZE=2>&#151;The senior secured credit agreement consists of $210.0&nbsp;million senior notes ("Senior Notes"), the full amount of which was
drawn at closing on September&nbsp;30, 2010. The proceeds were used to refinance part of the then-existing first-and second-lien credit facilities, as well as to pay other fees and
expenses related to the new Senior Notes. The Senior Notes are secured by a first priority lien on substantially all of the assets of the Company, including a pledge of all of the equity interests of
each domestic subsidiary and 65% of the equity interests of the first-tier foreign subsidiaries. The Company's other secured and unsecured obligations are subordinated in priority to
payment of loans under the senior secured credit agreement. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company makes elections as to the interest period term which can be one, two, three, or six months in length. The Company also makes elections as to the loan type on which the interest is based.
The Company can elect a Eurodollar Loan or an ABR Loan or a combination of the two. Eurodollar Loans accrue interest at a rate of LIBOR (with a minimum base rate of 2.0%) plus 8.0%. Eurodollar loan
interest is payable on </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-21 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>the
last day of the period term elected, provided, in the case of an interest period longer than three months, payments shall be due no more than three months after the commencement of the interest
period term. ABR Loans accrue interest at a base rate plus 7%. The base rate is defined as the greater of the Prime Rate as identified and published in the Wall Street Journal or the Federal Funds
Effective Rate as published by the Federal Reserve Bank of New York, on the date of election plus <SUP>1</SUP>/<SMALL>2</SMALL> of 1%. The base rate is to be a minimum of 3.0%. ABR loan interest is payable
March&nbsp;31, June&nbsp;30, September&nbsp;30, and December&nbsp;31 of each year. As of January&nbsp;1, 2011, the Company had elected Eurodollar loans for all Senior Notes, which were
accruing interest at the rate of 10.0%, which is equal to the minimum LIBOR rate of 2.0% plus 8.0%. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Senior Notes are due in full on September&nbsp;30, 2015. Voluntary early payments are allowed but payments made prior to the first anniversary date are required to be made at 102% of the
principal amount and payments made subsequent to the first anniversary date but prior to the second anniversary date are required to be made at 101% of the principal amount. Payments made subsequent
to the second anniversary date shall be made at par value of the outstanding debt. The Company is obligated to make prepayments against the Senior Notes resulting from the following transactions or
events as defined in the Senior Notes agreements: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>100%
of proceeds from the sale of assets not reinvested in long-term productive assets within one year of the receipt of the sale proceeds, not to exceed
$5.5&nbsp;million in any fiscal year;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>100%
of net insurance/condemnation proceeds in excess of $0.1&nbsp;million for any casualty event and in excess of $1.0&nbsp;million for all casualty events in
any fiscal year which are not reinvested in long-term productive assets or used to repair, restore, or replace the assets subject to the applicable casualty event or events within one year
of the receipt of the net proceeds;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>net
proceeds of equity issuances by Isola Group S.a.r.l. in an aggregate amount of 75% of such proceeds provided that if, as of the last day of the most recently
ended fiscal quarter, the senior secured leverage ratio shall be 2.50:1.00 or less but greater than 2.00:1.00, the amount shall be reduced to an aggregate amount equal to 50% of such proceeds, and
provided that if, as of the last day of the most recently ended fiscal quarter, the senior secured leverage ratio shall be 2.00:1.00 or less, the amount shall be reduced to an aggregate amount equal
to 25% of such proceeds;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>100%
of net proceeds from the incurrence by Isola Group S.a.r.l. or its subsidiaries of any indebtedness not otherwise permitted by the Senior Note agreements; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>75%
of consolidated excess cash flow, provided, that if, as of the last day of the most recently ended fiscal year, the senior secured leverage ratio shall be
2.00:1.00 or less, the amount shall be reduced to 50% of consolidated excess cash flow. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Senior Notes were issued at a discount of $28.5&nbsp;million on September&nbsp;30, 2010. As of January&nbsp;1, 2011, there was $210.0&nbsp;million of outstanding principal and
$27.5&nbsp;million of unamortized discount resulting in a net balance of $182.5&nbsp;million in the consolidated balance sheet. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Mezzanine Credit Agreement</B></FONT><FONT SIZE=2>&#151;The mezzanine credit agreement consists of $175.0&nbsp;million unsecured notes ("Subordinated Notes"), the full amount of which was
drawn at closing on September&nbsp;30, 2010. The proceeds were used to refinance part of the then-existing first-and second-lien credit facilities, as well as to pay other fees and
expenses related to the new Subordinated Notes. The unsecured term loans issued pursuant to the mezzanine credit agreement are subordinate and junior to the obligations owed under the </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-22 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>senior
secured credit agreement Notes facility. Obligations under the mezzanine credit agreement rank pari passu with the Company's other unsecured and unsubordinated obligations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
unsecured term loans under the mezzanine credit agreement bear interest at a rate of 16.0% per annum, with half (8.0% per annum) payable in cash on March&nbsp;31, June&nbsp;30,
September&nbsp;30, and December&nbsp;31, of each year until maturity and half (8.0% per annum) accreting on the outstanding principal amount of the unsecured term loans, due at maturity. The
Subordinated Notes are due in full on March&nbsp;24, 2016. Voluntary early payments are allowed subject to the prior discharge of the senior secured credit agreement obligations (except as otherwise
permitted pursuant to the applicable senior secured credit agreement). The Company is obligated to repay the Subordinated Notes in full along with any unpaid interest upon the occurrence of a "Change
in Control", as defined by the mezzanine credit agreement. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Subordinated Notes were issued at a discount of $70.4&nbsp;million on September&nbsp;30, 2010. As of January&nbsp;1, 2011, there was $178.6&nbsp;million of outstanding principal, which
consisted of $175.0&nbsp;million in
term loans and $3.6&nbsp;million of accreted interest. The unamortized discount was $69.0&nbsp;million at January&nbsp;1, 2011, resulting in a net balance of $109.6&nbsp;million in the
consolidated balance sheet. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Embedded Derivative Liability</B></FONT><FONT SIZE=2>&#151;In accordance with ASC 815, the mandatory pre-payment features of the Senior and Subordinated Notes are considered
embedded derivative liabilities. The values related to the embedded derivative liabilities are recognized at fair value in the consolidated balance sheet at each reporting period. At
September&nbsp;30, 2010 (issuance date) and January&nbsp;1, 2011, the determined fair value of the embedded derivative liabilities was $9.2&nbsp;million and $5.9&nbsp;million, respectively.
Any change in fair value of the embedded derivative liability is reflected in the consolidated statements of operations. For the fiscal year ended January&nbsp;1, 2011, the Company's embedded
derivative gain related to the Senior and Subordinated Notes was a combined $3.3&nbsp;million. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Covenants</B></FONT><FONT SIZE=2>&#151;The Company's New Credit Arrangements require it to maintain certain financial and operating covenants. The financial covenants include separate ratios
measuring both interest and secured debt against EBITDA, as defined in the New Credit Arrangements, as well as a limit on capital expenditures. The operating covenants impose limitations on business
decisions, including, but not limited to, the ability to (i)&nbsp;dispose of assets or stock; (ii)&nbsp;incur additional indebtedness and guarantee obligations; (iii)&nbsp;pay certain dividends;
(iv)&nbsp;create liens on assets; (v)&nbsp;make investments, loans or advances; (vi)&nbsp;restrict distributions to the borrowers or guarantors from its subsidiaries; (vii)&nbsp;engage in
mergers or consolidations; (viii)&nbsp;engage in certain transactions with affiliates; (ix)&nbsp;incur additional negative pledges; (x)&nbsp;incur capital expenditures; (xi)&nbsp;change its
fiscal year or accounting practices or the lines of business in which it and its subsidiaries are involved; (xii)&nbsp;enter into sale-leaseback transactions; (xiii)&nbsp;prepay
principal of, premium, or interest on, or redeem, purchase, retire, defease, or create a sinking fund or make a similar payment with respect to, any subordinated indebtedness and certain other debt;
(xiv)&nbsp;change the conduct of business; (xv)&nbsp;conduct activities of any parent holding company or (xvi)&nbsp;amend its organizational documents. The Company was in compliance with these
covenants as of January&nbsp;1, 2011. The Company was required to file its annual financial statements by April&nbsp;30, 2011. The Company was not in compliance with this requirement and obtained
a waiver of this covenant through September&nbsp;30, 2011. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Other Unsecured Debt</B></FONT><FONT SIZE=2>&#151;The Company has two unsecured loan agreements from lenders in China that provide for a series of draw-downs as funds are required
at the stated rate ranging from 4.26% to 5.04% per annum. Each draw-down has a one year maturity and is renewable on an annual basis. The Company </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-23 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>made
draws and repayments on these facilities and had combined outstanding balances of $15.1&nbsp;million and $14.6&nbsp;million at January&nbsp;1, 2011 and December&nbsp;26, 2009,
respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company has an entrustment loan with $5.5&nbsp;million and $5.3&nbsp;million outstanding at January&nbsp;1, 2011 and December&nbsp;26, 2009, respectively. An entrustment loan is a means
for one subsidiary to loan cash to another subsidiary with a bank acting as the intermediary. This is accomplished by a lending subsidiary depositing cash into a bank (which is shown as restricted
cash on the consolidated balance sheets) and then requesting the bank to on-loan the cash to another subsidiary with the terms being specified by the subsidiary depositing the cash. The
bank charges a minimal processing fee of 0.15% per annum of the outstanding balance to provide the service. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
subsidiary of the Company has unsecured short-term loan arrangements totaling $0.5&nbsp;million and $0.7&nbsp;million, bearing interest at an average interest rate of 1.9% and 1.4%
as of January&nbsp;1, 2011 and December&nbsp;26, 2009, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Several
of the Company's subsidiaries have entered into various lines of credit. These lines of credit provided total availability of $5.4&nbsp;million and $4.9&nbsp;million at January&nbsp;1,
2011 and December&nbsp;26, 2009, respectively. No balances were outstanding on these lines of credit as of January&nbsp;1, 2011 and December&nbsp;26, 2009. $0.6&nbsp;million was pledged as
guarantees as of both January&nbsp;1, 2011 and December&nbsp;26, 2009, leaving total credit available under the lines of $4.8&nbsp;million and $4.3&nbsp;million as of January&nbsp;1, 2011
and December&nbsp;26, 2009, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Several
of the Company's subsidiaries have open letters of credit for the benefit of third-party vendors. The total letter of credit availability is $2.1&nbsp;million at both January&nbsp;1, 2011
and December&nbsp;26, 2009, of which $1.1&nbsp;million and $1.2&nbsp;million has been committed as of January&nbsp;1, 2011 and December&nbsp;26, 2009, respectively. The letters of credit
expire at various dates. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fm12701_5._convertible_preferred_certificates"> </A>
<A NAME="toc_fm12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  5. CONVERTIBLE PREFERRED CERTIFICATES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company has issued and outstanding three different classes of Convertible Preferred Certificates ("CPCs") as of January&nbsp;1, 2011. The CPCs
have characteristics of both debt and equity, but are considered to be legal form debt instruments in Luxembourg, and thus are accounted for as debt. For each of the years ended December&nbsp;26,
2009 and December&nbsp;27, 2008, the Company had 420,455 and 95,788,400, respectively, Class&nbsp;A and B CPCs authorized, issued and outstanding. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On
September&nbsp;30, 2010, the Company entered into the Financing Transaction consisting of the issuance of 43,500,666 Class&nbsp;C CPCs, and the New Credit Arrangements (see Note&nbsp;4). The
Company received gross proceeds of $376.4&nbsp;million in connection the financing transactions which have been allocated among the instruments issued based upon the relative fair value of each at
the time of issuance. In preparing the 2010 consolidated financial statements, the Company determined that historic valuations
for the Class&nbsp;A and B contingent conversion feature discussed below did not appropriately consider the rights and preferences of the various instruments comprising the Company's capital
structure. Accordingly, during 2011, the Company engaged a third-party consultant to assist in the determination of the estimated fair value of the Class&nbsp;C CPCs and to perform retrospective
valuations with respect to the Class&nbsp;A and B CPCs, to assist in the determination of the fair value of the Class&nbsp;A and B contingent conversion feature. These retrospective valuations
resulted in new estimates of fair value for the Class&nbsp;A and B contingent conversion feature. The revised fair values were utilized to prepare the Company's financial statements for all periods
presented. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-24 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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  </B></FONT></P>

<P style="font-family:times;text-align:justify"><BR><FONT SIZE=2><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> <BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In conducting the valuations, the Company used a methodology that is consistent with the methods outlined in the </FONT><FONT SIZE=2><I>AICPA Practice Aid Valuation of
Privately-Held-Company Equity Securities Issued as Compensation</I></FONT><FONT SIZE=2>. The enterprise value inputs associated with the Company's valuations were derived using
the income and market approaches. The income approach estimates the enterprise value of the Company by discounting the expected future cash flows of the Company to present value. Under the market
approach, the total enterprise value of the Company is estimated by comparing the Company's business to similar businesses whose securities are actively traded in public markets, or businesses that
are involved in a public or private transaction. The Company has selected valuation multiples derived from trading multiples of public companies that participate in the Company's industry. These
valuation multiples were then applied to the equivalent financial metric of the Company's business, giving consideration to differences between the Company and similar companies for such factors as
company size, leverage, and growth prospects. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company prepared financial forecasts to be used in the computation of the enterprise value for the income approach. The financial forecasts took into account the Company's past experience and
future expectations. There is inherent uncertainty in these estimates. The risks associated with achieving the Company's forecasts were assessed in selecting the appropriate discount rates. If
different discount rates had been used, the valuations would have been different. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company then allocated the resulting enterprise value among the instruments that comprise the Company's capital structure based upon rights and preferences of the instruments using the
Option-Pricing Method ("OPM"). Under the OPM, the Company allocated the value of the CPCs and common stock of the Company based on a series of call options, representing the present value of the
expected future returns for each instrument. The value of these options was estimated using the Black-Scholes option pricing model. The assumptions utilized in the model, including assumptions
associated with volatility, were consistent with those selected to value the options to purchase partnership units, as discussed in Note&nbsp;9, as the Company's operations represent substantially
all of the net assets of the sole stockholder. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
OPM involves making estimates of the anticipated timing of a potential liquidity event such as a sale of the Company or an initial public offering, and estimates of the volatility of the Company's
equity securities. The anticipated timing is based on the plans of the board and management. Estimating the volatility of the share price of a privately held company is complex because there is no
readily available market for the shares. The Company estimated the volatility of the stock based on available information on volatility of stocks of publicly traded companies in the industry. Had the
Company used different estimates of volatility, the allocations between common stock and CPCs would have been different. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
43,500,666 certificates of Class&nbsp;C CPCs carry an aggregate par value of 43.5&nbsp;million Euro. There were no other CPC transactions during the years ended January&nbsp;1, 2011,
December&nbsp;26, 2009, and December&nbsp;27, 2008. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As
of September&nbsp;30, 2010, $24.8&nbsp;million of the proceeds received in connection with the September&nbsp;30, 2010 financing transactions were allocated to the Class&nbsp;C CPCs
resulting in a discount of $34.5&nbsp;million. As of January&nbsp;1, 2011, the Company had outstanding Class&nbsp;C CPCs with par amount of 43.5&nbsp;million Euro ($58.1&nbsp;million),
including accrued interest of $0.9&nbsp;million and unamortized discount of $33.8&nbsp;million, resulting in a carrying balance of $24.3&nbsp;million in the consolidated balance sheet. During
fiscal 2010, interest expense as a result of the amortization of the Class&nbsp;C CPC discount was immaterial, and loss related to foreign currency translation was $0.5&nbsp;million. As of
January&nbsp;1, 2011 and December&nbsp;26, 2009, the </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-25 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>carrying
value of the Class&nbsp;A and B CPCs, combined, was $174.8&nbsp;million and $176.6&nbsp;million, respectively, including accrued interest of $45.7&nbsp;million and
$38.6&nbsp;million, respectively. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following is a summary of the rights, preferences and terms of the Company's outstanding series of CPCs: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fo12701_redemption_and_optional_redemption"> </A>
<A NAME="toc_fo12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  Redemption and Optional Redemption    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Class&nbsp;A and Class&nbsp;B CPCs mature on June&nbsp;2, 2044, and Class&nbsp;C CPCs mature on September&nbsp;30, 2050. The CPCs are
mandatorily redeemable at these maturity dates at a price equivalent to par plus accrued and unpaid interest (the "Redemption Price"). The Company, within 15&nbsp;days of a conversion event, as
further discussed below, may elect an earlier redemption of any or all of the CPCs at the greater of the Redemption Price or a formula indexed to the adjusted net asset value of the Company, as
further defined in the CPC agreements (the "Optional Redemption Price"). The Redemption Price of the Class&nbsp;A, B, and C CPCs totaled $232.9&nbsp;million and $176.6&nbsp;million as of
January&nbsp;1, 2011 and December&nbsp;26, 2009, respectively. The Company may only elect optional redemption to the extent sufficient funds are available subsequent to redemption to satisfy all
of the Company's other obligations, whether senior or pari passu to the CPCs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fo12701_preferred_interest"> </A>
<A NAME="toc_fo12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  Preferred interest    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Class&nbsp;A and Class&nbsp;B CPCs carry a par value of one Euro and earn preferred interest based on the six-month EURIBOR plus
4.875% (6.1% and 5.9% as of January&nbsp;1, 2011 and December&nbsp;26, 2009, respectively). Class&nbsp;C CPCs carry a par value of one Euro and earn preferred interest based on the
six-month EURIBOR plus 5.0% (6.3% as of
January&nbsp;1, 2011). The preferred interest is payable upon declaration by the Board of Directors and to the extent the Company possesses sufficient funds. Cumulative preferred interest of
$46.6&nbsp;million and $38.6&nbsp;million has been recorded within convertible preferred certificates on the consolidated balance sheets as of January&nbsp;1, 2011 and December&nbsp;26, 2009,
respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fo12701_liquidation"> </A>
<A NAME="toc_fo12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  Liquidation    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In the event of liquidation, Class&nbsp;A, B, and C CPCs are redeemable at par value plus any accrued but unpaid interest. In liquidation, the CPCs
rank pari passu among each class, rank senior in priority of payment to the Company's common stock and subordinate to all other obligations. After the payment of the applicable liquidation preference
to the holders of the CPCs, the residual, if any, will be distributed pro rata among the common stockholders. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fo12701_voting_and_dividend_rights"> </A>
<A NAME="toc_fo12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  Voting and dividend rights    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The CPCs do not include voting or dividend rights unless converted into common shares. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fo12701_contingent_conversion_feature"> </A>
<A NAME="toc_fo12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  Contingent conversion feature    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The CPC agreements provide both the Company and the holders certain rights to convert some or all of the CPCs into the Company's common shares upon
the occurrence of certain events. A conversion event is defined as "after payment of or provision for other obligations, the Issuer has funds resulting, among others, from (i)&nbsp;dividend payments
made by the subsidiaries or (ii)&nbsp;a sale of one of the subsidiaries by the Issuer to an affiliated or nonaffiliated party or (iii)&nbsp;any recapitalization or refinancing of any TPG Isola
group of </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-26 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>companies."
During a 15-day period subsequent to the occurrence of a conversion event, the Company shall have the right but not the obligation to convert any or all CPCs into common
shares of the Company by requiring the holder to exchange CPCs for shares. Upon expiration of the Company's conversion rights, and for the following 15-day period, each holder shall have
the right (subject to certain limitations) but not the obligation to have any or all of its CPCs converted into common shares of the Company. Any conversions will take place at a price equal to the
conversion price defined in the CPC agreements. The number of common shares into which each CPC is convertible will be determined at the time of conversion as the conversion price is indexed to the
greater of par value plus accrued and unpaid interest or the adjusted net asset value of the Company. Adjusted net asset value is most commonly indexed to the fair value of the Company's net assets
and is therefore, determinable upon the occurrence of a conversion event. As of January&nbsp;1, 2011, based solely upon the par plus accrued and unpaid interest feature of the conversion price, the
Class&nbsp;A, B, and C CPCs were convertible into 569,151, 129,664,416 and 44,188,874 shares, respectively, of the Company's common stock. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fo12701_embedded_derivative_feature"> </A>
<A NAME="toc_fo12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  Embedded derivative feature    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In accordance with ASC 815, </FONT><FONT SIZE=2><I>Accounting for Derivative Instruments and Hedging Activities</I></FONT><FONT SIZE=2>, the
conversion features that are included in the CPC agreements and are discussed above are considered an embedded derivative liability. At January&nbsp;1, 2011 and December&nbsp;26, 2009, the fair
value of the embedded derivative liability was determined to be $60.5&nbsp;million and $27.5&nbsp;million, respectively, which was bifurcated from the CPCs and is stated separately on the
consolidated balance sheets. The value related to the embedded derivative liability is recognized at fair value at each reporting period and any change in fair value is reflected in the consolidated
statements of operations. The initial value of the embedded derivative on September&nbsp;30, 2010 related to the Class&nbsp;C CPCs was $56.3&nbsp;million. For the fiscal years ended
January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, the change in fair value of the embedded derivative liability related to the CPCs resulted in income of
$21.7&nbsp;million, expense of $27.5&nbsp;million, and income of $115.4&nbsp;million, respectively. Management determined the fair value of the embedded derivative with the assistance of a
third-party consultant as described above. While these valuations were prepared beginning in 2005, contemporaneous with the Company's fiscal year-ends through 2010, the Company
subsequently determined the historic valuations did not appropriately consider the rights and preferences of the various instruments comprising the Company's capital structure. Accordingly, during
2011 retrospective valuations were performed as of December&nbsp;31, 2005, December&nbsp;30, 2006, December&nbsp;29, 2007, December&nbsp;27, 2008, December&nbsp;26, 2009, March&nbsp;31,
2010, June&nbsp;30, 2010, September&nbsp;25, 2010, October&nbsp;8, 2010, and January&nbsp;1, 2011. The retrospective valuations resulted in new estimates of fair value at each respective
period. The revised fair values were utilized to prepare the Company's consolidated financial statements for all periods presented. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fo12701_6._interest_rate_swaps"> </A>
<A NAME="toc_fo12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  6. INTEREST RATE SWAPS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In December 2010, a subsidiary of the Company entered into an interest rate swap with a notional amount of $25.0&nbsp;million, which expires on
December&nbsp;31, 2013. The Company did not designate this swap agreement as a hedge and therefore, any change in fair value will be recorded in the consolidated statement of operations as interest
expense. There was no change in fair value for the fiscal year ended January&nbsp;1, 2011. The Company pays a fixed rate amount of 2.8% per annum and receives a variable rate based on the greater of
2.0% or the three-month LIBOR. Interest incurred or earned from this agreement is settled </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-27 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>quarterly
on the last day of March, June, September, and December and commenced on March&nbsp;31, 2011. The swap agreement is required under the terms of the Company's Senior Notes agreements, which
require that a minimum of 50.0% of the principal of the Company's aggregate indebtedness bears interest at a fixed rate or is protected by an agreement to provide the same effect. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
May 2007, a subsidiary entered into two interest rate swaps with a combined notional amount of $14.6&nbsp;million in order to mitigate the risks associated with fluctuations of the interest rate
on a capital lease contract. One of the swaps expires in June 2012 and bears an interest rate of the three-month EURIBOR plus 0.52%. The Company pays a variable rate based on the three-month EURIBOR
plus 0.52% with a maximum of 5.02% and receives a variable rate based on the three-month EURIBOR. The second swap expires in June 2014 and bears a fixed interest rate of 4.65%. The Company pays a
fixed rate of 4.65% and receives a variable rate based on the three-month EURIBOR. Settlement dates occur quarterly on both swaps. The Company did not designate these swap agreements as hedges and
therefore, any change in fair value is recorded in the consolidated statement of operations as interest expense. The Company recorded $0.1&nbsp;million in interest income, and $0.1&nbsp;million
and $0.4&nbsp;million as interest expense in the consolidated statements of operations for the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008,
respectively. The combined fair value of these interest rate swaps was a liability of $0.6&nbsp;million and $0.7&nbsp;million at January&nbsp;1, 2011 and December&nbsp;26, 2009, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
February 2007, a subsidiary of the Company entered into an interest rate swap with a notional amount of $142.5&nbsp;million under which the Company paid a fixed rate amount of 5.075% per annum
and received variable quarterly payments based on the three-month LIBOR. The swap was scheduled to expire in March 2010. The Company did not designate this swap agreement as a hedge and therefore, any
change in fair value was recorded in the consolidated statement of operations as interest expense. The Company recorded interest income of $1.5&nbsp;million in the consolidated statement of
operations for the fiscal year ended December&nbsp;26, 2009, related to the change in swap fair value. In March 2009, the Company did not make a quarterly settlement payment as required by the
interest rate swap agreement. According to the swap agreement, failure to make the quarterly settlement payment was considered an event of default resulting in a termination of the swap agreement in
April
2009. Accordingly, the resulting liability to settle the swap of $5.6&nbsp;million was recorded in other current liabilities on the consolidated balance sheet as of December&nbsp;26, 2009. The
outstanding balance of $5.6&nbsp;million, along with accrued interest of $1.4&nbsp;million, was paid on September&nbsp;30, 2010, pursuant to the new credit agreements discussed above. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
January 2007, a subsidiary of the Company entered into an interest rate swap with a notional amount of $1.9&nbsp;million in order to mitigate the risk associated with interest fluctuations on a
$2.9&nbsp;million loan. The swap was set to expire in December 2011 and bore interest at a fixed rate of 4.4%. Settlement dates occurred quarterly. The Company did not designate this swap agreement
as a hedge and therefore, any change in fair value would ordinarily be recorded in the consolidated statement of operations as interest expense. The subsidiary that entered into this interest rate
swap agreement was treated as a discontinued operation during 2009 and 2008 (see Note&nbsp;16) and therefore, changes in the fair value of the interest rate swap are included in the results from the
discontinued operations in the consolidated statements of operations. The swap agreement was settled and paid during fiscal 2009. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-28 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fo12701_7._pension_and_other_retirement_benefits"> </A>
<A NAME="toc_fo12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  7. PENSION AND OTHER RETIREMENT BENEFITS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company sponsors a number of defined benefit pension plans covering certain U.S. employees as well as certain non-U.S. employees of
certain subsidiaries. A defined benefit plan specifies the amount of benefits a plan participant is to receive. Plans covering U.S. employees provide benefits of stated amounts generally based on
years of service and compensation history. The qualified U.S. plans had been previously frozen and curtailed prior to the original Isola acquisition in 2004, such that no new participants were
admitted into the plans and no additional benefits were accrued for participants already in the plans. Employees do not contribute to the plans. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, the Company sponsors a Supplemental Employee Retirement Plan ("SERP"), which covers certain officers and highly compensated employees of the Company designated for participation by the
plan document. In order to comply with changes required by Section&nbsp;409A of the Internal Revenue Code of 1986, effective January&nbsp;1, 2008, the Company amended the SERP to require that
retirement benefits be paid in a single lump sum within 30&nbsp;days following the participant's separation from service. Benefits for previously terminated employees were paid in January 2009.
Also, effective February&nbsp;1, 2009, participants of the SERP no longer accrue additional benefits. Benefits accrued through February&nbsp;1, 2009 were not impacted. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company also provides postretirement benefits for certain employees of the Company and its subsidiaries, which include medical and life insurance. For the medical insurance plans, retirees make
contributions to cover a portion of the plan costs. Effective March&nbsp;1, 2009, the Company amended the medical insurance plan to increase the portion of the premiums paid by the retirees to 100%.
This change took effect during 2009, but was prospectively accounted for during 2008 as a plan amendment. The plan is not eligible for the government subsidy under the </FONT><FONT SIZE=2><I>Medicare
Prescription Drug, Improvement and Modernization Act of 2003</I></FONT><FONT SIZE=2> (the "Act") and the Company does not recognize any reduction in the benefit obligation. The medical insurance
benefits are paid as incurred. For the life insurance plan, retirees do not make contributions. The Company retains the right to change or eliminate these benefits. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-29 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
components of net periodic benefit cost for the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, are shown in the table below (in millions): </FONT></P>
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<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Pension benefits </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>U.S.<BR>
plans</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Non-U.S.<BR>
plans</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Other<BR>
benefits</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>For year ended January&nbsp;1, 2011:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Service cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Past service</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amortization of net (gain) / loss</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected return on plan assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(3.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net periodic (benefit) / cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>For year ended December&nbsp;26, 2009:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Service cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Past service</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amortization of net (gain) / loss</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected return on plan assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(3.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Settlement / curtailment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net periodic (benefit) / cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>For year ended December&nbsp;27, 2008:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Service cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Past service</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amortization of net (gain) / loss</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected return on plan assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net periodic (benefit) / cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The estimated net actuarial loss, prior service benefit, and transition asset for the defined benefit pension plans that will be amortized from other
comprehensive loss into net periodic benefit cost over the next fiscal year is $1.5&nbsp;million, $0, and $0.1&nbsp;million, respectively. The estimated net actuarial gain and prior service
benefit for the defined benefit postretirement plans that will be amortized from other comprehensive loss into net periodic benefit cost over the next fiscal year is $0 and $0.4&nbsp;million,
respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-30 </B></FONT></P>

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</FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


  </B></FONT></P>

<P style="font-family:times;text-align:justify"><BR><FONT SIZE=2><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> <BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table provides details of the changes in benefit obligations for the fiscal years ended January&nbsp;1, 2011 and December&nbsp;26, 2009 (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Pension benefits </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>U.S.<BR>
plans</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Non-U.S.<BR>
plans</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Other<BR>
benefits</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Benefit obligation&#151;December&nbsp;27, 2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>75.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Service cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Actuarial loss</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Settlement/Curtailment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Benefits paid</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Currency translation adjustments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Benefit obligation&#151;December&nbsp;26, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>76.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>19.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Service cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Actuarial loss</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Benefits paid</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Currency translation adjustments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Benefit obligation&#151;January&nbsp;1, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>84.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>22.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table provides details of the changes in fair value of the plan assets for the fiscal years ended January&nbsp;1, 2011 and December&nbsp;26,
2009 (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


</FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Pension benefits </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>U.S.<BR>
plans</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Non-U.S.<BR>
plans</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Other<BR>
benefits</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value of plan assets&#151;December&nbsp;27, 2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>43.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Actual return on plan assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Employer contributions</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Benefit payments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Currency translation adjustments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value of plan assets&#151;December&nbsp;26, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>53.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Actual return on plan assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Employer contributions</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Benefit payments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Currency translation adjustments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value of plan assets&#151;January&nbsp;1, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>56.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-31 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>As of January&nbsp;1, 2011 and December&nbsp;26, 2009, the following table provides a reconciliation of the funded status of the plans to the amounts
recognized on the consolidated balance sheets (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="150%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Pension benefits </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>U.S. plans </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Non-U.S. plans </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Other benefits </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=20 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Funded status, current liability</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Funded status, noncurrent liability</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(27.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(22.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(13.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(10.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Funded status, noncurrent asset</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized actuarial loss / (gain)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized transition</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Prior service credit</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(5.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued pension cost</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(4.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(5.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(9.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(8.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(8.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(8.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net amount recognized in accumulated other comprehensive loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(23.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(17.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(4.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net amount recognized</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(27.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(22.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(13.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(11.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table presents amounts for pension plans with accumulated benefit obligations in excess of fair value of plan assets (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="79pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="96pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26, 2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Projected benefit obligation</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>106.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>95.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated benefit obligations</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>104.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>93.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value of plan assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>65.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>61.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-32 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=195,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=467778,FOLIO='F-32',FILE='DISK108:[11ZAS1.11ZAS12701]FQ12701A.;31',USER='KSEAMON',CD='29-OCT-2011;20:23' -->
<A NAME="page_fq12701_1_33"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table provides details regarding the amounts recognized in consolidated accumulated other comprehensive loss: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Pension benefits </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>U.S.<BR>
plans</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Non-U.S.<BR>
plans</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Other<BR>
benefits</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>As of January&nbsp;1, 2011:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized actuarial (gain) / loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>26.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized past service cost / (credit)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(5.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(5.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized net transition asset or obligation</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net amount recognized in accumulated other comprehensive loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>20.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>As of December&nbsp;26, 2009:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized actuarial (gain) / loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized past service cost / (credit)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized net transition asset or obligation</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net amount recognized in accumulated other comprehensive loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(7.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table provides details regarding the weighted-average assumptions for both the pension and other benefits used to determine each respective
benefit obligation and net periodic benefit cost for the fiscal years ended January&nbsp;1, 2011 and December&nbsp;26, 2009: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"150%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="150%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Pension benefits </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>U.S. plans </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Non-U.S. plans </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Other benefits </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=20 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted-average assumptions used to determine benefit obligations at year-end:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Discount rate</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5.98</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3.77</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.48</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.75</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5.50</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Rate of compensation increase</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.00</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2.09</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2.30</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted-average assumptions used to determine net (benefit)&nbsp;/ cost:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Discount rate</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5.99</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6.50</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.55</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.18</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5.50</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6.25</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected return on plan assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7.44</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7.44</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.50</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5.07</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Rate of compensation increase</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4.00</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.85</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.11</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>N/A</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-33 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=196,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=646885,FOLIO='F-33',FILE='DISK108:[11ZAS1.11ZAS12701]FQ12701A.;31',USER='KSEAMON',CD='29-OCT-2011;20:23' -->
<A NAME="page_fq12701_1_34"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company sets the discount rate assumption annually for each of its retirement-related benefit plans at their measurement dates to reflect the yield of a
portfolio of high quality, fixed-income debt instruments matched against the timing and amounts of projected future benefits. Assumptions regarding the health care cost trends and rates are as
follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assumed health care trend rates:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Initial health care cost trend rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ultimate health care cost trend rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Number of years to ultimate trend rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>A one percentage point increase or decrease in the initial assumed health care trend rate through ultimate assumed health care trend rates would have an
immaterial effect on the accumulated postretirement benefit obligation at January&nbsp;1, 2011. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company has selected a 7.05% weighted average expected rate of return on plan assets for the fiscal year ending December&nbsp;31, 2011. The Company selected the expected long-term
rate of return on plan assets by examining the past performance and the economic forecasts for the types and specific investments held by each plan on an annual basis. The Company believes a 7.05%
rate of return to be reasonable given the historical performance of the current asset allocation and the expected future performance for each plan. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following benefit payments and contributions are expected to be paid (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="30pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="74pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Pension benefits </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Other benefits </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Fiscal years ending</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>U.S.<BR>
plans</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Non-U.S.<BR>
plans</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Gross benefit<BR>
payments</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=10 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2016-2020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>23.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company's overall asset investment strategy focuses on maintaining a diversified portfolio using various asset classes in order to achieve the
long-term investment objectives on a risk adjusted basis. The actual invested positions in various securities change over time based on short- and long-term
investment opportunities. The Company reviews its assets on a regular basis to ensure that they are within the targeted asset allocation ranges and, if necessary, asset balances are adjusted back
within target allocations. Target allocation percentages differ by each individual plan but are relatively consistent with the allocation percentages shown in the table below. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-34 </B></FONT></P>

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</FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


  </B></FONT></P>

<P style="font-family:times;text-align:justify"><BR><FONT SIZE=2><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> <BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table presents information about the Company's plan assets measured at fair value on a recurring basis at January&nbsp;1, 2011, and indicates the fair value
hierarchy of the valuation techniques utilized to determine such fair value: </FONT></P>
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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Quoted<BR>
prices in<BR>
active<BR>
markets<BR>
for<BR>
identical<BR>
assets<BR>
(Level&nbsp;1)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Significant<BR>
observable<BR>
inputs<BR>
(Level&nbsp;2)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Significant<BR>
unobservable<BR>
inputs<BR>
(Level&nbsp;3)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Asset<BR>
allocation<BR>
percentages</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=18 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>As of January&nbsp;1, 2011</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and deposits</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Equity securities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Large Cap Growth<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Large Cap Value<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Mid Cap Growth<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Mid Cap Value<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Small Cap Growth<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Equity Index Fund<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Natural Resources<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>International Blend<SUP>(b)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total equity securities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>38</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fixed income:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Guaranteed Deposit Fund<SUP>(c)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Templeton Global Bond Fund ADVI<SUP>(d)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Core Bond Enhanced Index / PIM Fund<SUP>(d)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>High Yield Bond / Caywood-Scholl Fund<SUP>(d)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>International Corporate Bonds</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total fixed income</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>37.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>57</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>65.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>49.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-35 </B></FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=198,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=402189,FOLIO='F-35',FILE='DISK108:[11ZAS1.11ZAS12701]FS12701A.;30',USER='KSEAMON',CD='29-OCT-2011;18:59' -->
<A NAME="page_fs12701_1_36"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Quoted<BR>
prices in<BR>
active<BR>
markets<BR>
for<BR>
identical<BR>
assets<BR>
(Level&nbsp;1)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Significant<BR>
observable<BR>
inputs<BR>
(Level&nbsp;2)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Significant<BR>
unobservable<BR>
inputs<BR>
(Level&nbsp;3)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Asset<BR>
allocation<BR>
percentages</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=18 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>As of December&nbsp;26, 2009</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and deposits</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Equity securities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Large Cap Growth<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Large Cap Value<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Mid Cap Growth<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Mid Cap Value<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Small Cap Growth<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Equity Index Fund<SUP>(a)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>International Blend<SUP>(b)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total equity securities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>26.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>26.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>43</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fixed income:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Guaranteed Deposit Fund<SUP>(c)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Vanguard Inflation-Protected Securities<SUP>(d)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Core Bond Enhanced Index / PIM Fund<SUP>(d)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>High Yield Bond / Caywood-Scholl Fund<SUP>(d)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>International Corporate Bonds</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total fixed income</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>28.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>46</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Real estate<SUP>(e)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>61.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>43.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

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  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(a)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> U.S. equity securities are primarily invested in domestic equities. Securities in these funds are typically priced using the closing price from the applicable exchange(s).
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(b)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> International equity securities are typically priced using the closing price from the appropriate local exchange(s). Securities are evaluated by a third party which
seeks to update
prices in the event there are material market movements between local exchange closing times and the portfolio valuation time (4pm EST each day).
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(c)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Assets consist of investments in interest rate-based funds. The value in these assets is calculated by multiplying the balance in the account by an established
interest
rate.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(d)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Assets are typically comprised of U.S. fixed-income securities. Securities are priced by an outside service using inputs such as benchmark yields, reported trades,
broker/dealer
quotes, and issuer spreads. The outside service also monitors market indices and industry and economic events, including credit rating agency actions.
<BR><BR> </I></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(e)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> The fair value of real estate funds is determined through an independent appraisal process. The fair value is based on the conventional approaches to value, all of
which require the
exercise of subjective judgment. <BR>  </I></FONT></DD></DL>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-36 </B></FONT></P>

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</FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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  </B></FONT></P>

<P style="font-family:times;text-align:justify"><BR><FONT SIZE=2><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> <BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table presents the changes in Level&nbsp;3 Plan assets measured on a recurring basis for the years ended January&nbsp;1, 2011 and December&nbsp;26, 2009 (in
millions): </FONT></P>
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<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="34pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Plan assets </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Guaranteed<BR>
deposit fund</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Real<BR>
estate</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance&#151;December&nbsp;27, 2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Transfers into Level&nbsp;3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total gains or losses (realized/unrealized) included in changes in net asset</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Purchases, issuances, sales and settlements:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Purchases</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Sales</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance&#151;December&nbsp;26, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Transfers into Level&nbsp;3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total gains or losses (realized/unrealized) included in changes in net asset</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Purchases, issuances, sales and settlements:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Purchases</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Sales</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance&#151;January&nbsp;1, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>A subsidiary of the Company also maintains a 401(k) defined contribution plan for the benefit of its U.S. employees. The Company's matching contributions for
the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008 were $0.5&nbsp;million, $0.1&nbsp;million, and $1.5&nbsp;million, respectively. Effective
February 2009, the Company suspended the 401(k) defined contribution plan matching program in the U.S. The Company resumed the matching program in April 2010. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fu12701_8._commitments_and_contingencies"> </A>
<A NAME="toc_fu12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  8. COMMITMENTS AND CONTINGENCIES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Leases</B></FONT><FONT SIZE=2>&#151;The Company's principal noncancelable, long-term, operating lease obligations are for land, manufacturing equipment, and office and warehouse
space. Rental expense for the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, was $3.5&nbsp;million, $4.3&nbsp;million, and $5.6&nbsp;million,
respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Property,
plant, and equipment recorded under capital leases and related accumulated depreciation was $19.6&nbsp;million and $2.6&nbsp;million as of January&nbsp;1, 2011, respectively, and
$21.1&nbsp;million and $2.1&nbsp;million as of December&nbsp;26, 2009, respectively. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-37 </B></FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_fu12701_1_38"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Future
minimum lease payments under noncancelable operating and capital leases at January&nbsp;1, 2011 are as follows (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="37pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Fiscal years ending</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Operating<BR>
leases</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Capital<BR>
leases</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Thereafter</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total minimum lease payments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>19.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less imputed interest</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Present value of minimum lease payments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current portion of capital lease obligations (included in other current liabilities)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Long-term portion of capital lease obligations</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company received approximately $2.0&nbsp;million, $2.0&nbsp;million, and $2.1&nbsp;million of rental income from the sublease of certain office and
warehouse space during the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, respectively. Rental income was recorded as a reduction of cost of goods
sold in the consolidated statements of operations. The sublease is expected to provide approximately $2.0&nbsp;million in rental income during the fiscal year ending December&nbsp;31, 2011 and
$1.9&nbsp;million for both fiscal years 2012 and 2013. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Legal Proceedings</B></FONT><FONT SIZE=2>&#151;From time to time, the Company is involved in legal proceedings and claims that occur in the normal course of business. Although there can be no
assurance, the Company does not believe the results of these proceedings will have a material effect on its business, results of operations, financial position, or cash flows. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On
February&nbsp;15, 2010, the Company entered into a settlement agreement with a third party ending a dispute related to the use of patented technology. The agreement resulted in the Company
receiving a settlement from the third party in the amount of $3.0&nbsp;million which has been recorded in other income in the consolidated statement of operations during the fiscal year ended
January&nbsp;1, 2011. The agreement also requires the third party to pay royalties during the life of the patent. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fu12701_9._stock-based_compensation"> </A>
<A NAME="toc_fu12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  9. STOCK-BASED COMPENSATION    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Option Plans</B></FONT><FONT SIZE=2>&#151;Executives and other key employees have been granted options to purchase partnership units in the sole stockholder of the Company under terms of the
2004 Option Plan ("2004 Plan") and the Partnership 2010 Option Plan ("2010 Plan"). The Plans were adopted in June 2004 and September 2010, respectively, and are administered by a committee appointed
by TPG (the "Committee"). The exercise price of the stock options granted are determined by the Committee.
The options vest annually over a 2- to 5-year period beginning with the first anniversary of the grant date and bear a 10-year contractual life. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-38 </B></FONT></P>

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<A NAME="page_fu12701_1_39"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Restricted Unit Plan</B></FONT><FONT SIZE=2>&#151;Executives and other key employees have been granted restricted units in the Limited Partner Common Units of the sole stockholder of the
Company under terms of the 2007 Restricted Unit Plan ("2007 Unit Plan") as amended and restated as of September&nbsp;30, 2010. The plan was adopted and is administered by the Committee. The fair
value of the units granted is determined by the Committee at date of issuance. The units vest in accordance with the terms outlined in each individual restricted unit grant agreement. The restricted
units or any such portion thereof that is not vested on the date the participant's services are terminated shall expire on such date. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As
of January&nbsp;1, 2011 and December&nbsp;26, 2009, the Committee had authorized the issuance of an aggregate number of options and restricted units under the terms of the Plans discussed above
of 21,697,494 and 6,812,671, respectively. The Company had a combined total of 16,834,000 and 5,184,000 options and restricted units outstanding as of January&nbsp;1, 2011 and December&nbsp;26,
2009, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company adopted the fair value method on January&nbsp;1, 2006 in recognizing stock-based compensation expense. Under the fair value method, the Company estimates the fair value of each option
award on the grant date using the Black-Scholes option pricing model and certain assumptions. The weighted average assumptions utilized for options granted during the fiscal years ended
January&nbsp;1, 2011 and December&nbsp;27, 2008 are noted in the following table: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="55pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;27,<BR>
2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected dividend rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected stock price volatility</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>65.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>71.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Risk free interest rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.43</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.21</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected term of options</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.0 Years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.5 Years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>No options were granted during the fiscal year ended December&nbsp;26, 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company based expected volatility on the historical volatility of a peer group of publicly traded entities over a period consistent with the expected terms of the options as the Company did not
have a sufficient trading history to use the volatility of the Company's common stock. The expected term of options represents the period that the options are expected to be outstanding and is based
on management's best estimate. The risk-free interest rate used is based on the United States Treasury yield in effect at the time of grant for zero coupon United States Treasury notes
with maturities approximating each grant's expected life. The Company does not have a history of issuing dividends and does not expect to issue dividends in the foreseeable future. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company calculates employee stock-based compensation expense based on awards ultimately expected to vest as reduced for estimated forfeitures. The fair value method requires forfeitures to be
estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates the forfeiture rate based on an analysis of
actual forfeitures and will continue to evaluate the adequacy of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover behavior, and other factors. The impact from a
forfeiture rate adjustment will be recognized in full in the period of adjustment, and if the actual number of future forfeitures differs from that estimated, the Company may be required to record
adjustments to stock-based compensation expense in future periods. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-39 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_fu12701_1_40"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
conducting the valuation of the partnership units, the Company used a methodology that is consistent with the methods outlined in the </FONT><FONT SIZE=2><I>AICPA Practice Aid Valuation of
Privately-Held-Company Equity Securities Issued as Compensation</I></FONT><FONT SIZE=2>. These valuations were prepared beginning in 2004, contemporaneous with the grant of
stock-based payment awards. In preparing the 2010 consolidated financial statements, the Company determined that these historic valuations did not appropriately consider the rights and preferences of
the Company's and the sole stockholder's share and partnership unit classes, respectively. Accordingly, during 2011, the Company engaged a third-party consultant to assist in the determination of the
estimated fair value of the partnership units underlying the stock-based awards, as described in Note&nbsp;5, and performed retrospective valuations for significant historical stock-based payment
award dates. These retrospective valuations resulted in new estimates of fair value of the partnership units underlying the stock-based payment awards at each respective period. The revised fair
values were utilized to prepare the Company's consolidated financial statements for all periods presented. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>All
of the allocated value associated with the Company's common stock and CPCs would be available to the Company's sole stockholder. Similar to the Company enterprise allocation described in
Note&nbsp;5, the OPM was used to allocate this value among the varying partnership interests, including the partnership units underlying the Company's stock-based payment awards. The Company
allocated this value based on a series of call options using the Black-Scholes option pricing model and assumptions consistent with those selected to value the options to purchase partnership units,
previously discussed. The estimates made with respect to the anticipated timing of a potential liquidity event and volatility were consistent with those associated with the allocation of enterprise
value among the securities that comprise the Company's capital structure. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On
October&nbsp;8, 2010, certain of the Company's employees holding options (vested or unvested at that date) were given an offer to either retain their existing options with the originally issued
terms or surrender their options for $0.53 in cash for each vested option payable immediately as well as $0.53 in cash for each unvested option payable upon completion of that unvested option's
original service-based vesting condition. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, on October&nbsp;8, 2010, the remaining employees of the Company holding options (vested or unvested at that date) were given an offer to surrender all of their existing options (vested
or unvested at that date) in exchange for a combination of new options ("New Options") and new restricted partnership units ("New Restricted Units") to be granted under the 2010 Plan and 2007 Unit
Plan, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As
of October&nbsp;8, 2010, 4,562,000 options were outstanding and the holders thereof elected the following: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Action taken</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Options</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Vested options surrendered for cash</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>565,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unvested options surrendered for cash upon vesting</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>331,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options exchanged for new options and restricted units</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3,630,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Original options retained</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>36,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4,562,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>As a result, employees received $299,450 in cash for vested options surrendered and were entitled to $175,430 in cash for unvested options to be earned as those
options vest under their original terms. The </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-40 </B></FONT></P>

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<A NAME="page_fu12701_1_41"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>consideration
given for the vested options surrendered was in excess of the surrender date fair value by $175,610 and was recognized as compensation expense in 2010. As future service is required for
payment of the options unvested as of October&nbsp;8, 2010, the Company determined that the transaction was a modification under ASC 718 that changes the award classification from equity to
liability. Incremental compensation cost for these modified awards, measured as the excess of their fair value over the fair value of the original awards immediately before the terms were modified,
was not material. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
total of 13,460,500 New Options were issued and 3,337,500 New Restricted Units were issued in connection with the exchanges. Both the New Options and New Restricted Units are graded-vesting awards
(one-third per year beginning on the first anniversary of the grant) containing
only service vesting conditions. Both instruments are non-transferable and contain no voting or distribution rights and unvested awards are forfeited upon employee termination. The New
Options expire 10&nbsp;years after the grant date and contain no redemption rights. The New Restricted Units contain a feature whereby, upon vesting and the holder obtaining Limited Partner Common
Units pursuant to the 2007 Unit Plan, the Partnership has a call right on those Limited Partner Common Units during the 90-day period after the later of: a)&nbsp;participant termination;
or b)&nbsp;the date on which the participant has held Limited Partner Common Units acquired pursuant to the 2007 Unit Plan for at least 180&nbsp;days, at fair value measured as of the date such
right is exercised by the Partnership. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company determined the issuance of New Options and New Restricted Units was a modification under ASC 718 for substantially all of the exchanged options. Accordingly, the Company measured the
incremental fair value of consideration given for these modified awards over that of the options tendered and determined there to be $6.8&nbsp;million of additional value. This additional
stock-based compensation, as well as $1.6&nbsp;million of unrecognized stock-based compensation related to the options tendered in the modification, will be recognized over the vesting period of the
New Options and New Restricted Units using the straight-line method. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-41 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_fu12701_1_42"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
summary of option activity as of January&nbsp;1, 2011, and changes during the three years then ended follows: </FONT></P>
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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="58pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="72pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Options</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Weighted<BR>
average<BR>
exercise<BR>
price</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Weighted<BR>
average<BR>
remaining<BR>
contractual<BR>
life<BR>
(in years)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Aggregate<BR>
intrinsic value</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance outstanding&#151;December&nbsp;29, 2007</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,377,416</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options granted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,770,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options exercised</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(10,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options forfeited</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,403,416</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance outstanding&#151;December&nbsp;27, 2008</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,734,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options granted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options exercised</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options forfeited</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(550,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance outstanding&#151;December&nbsp;26, 2009</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,184,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options granted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>13,460,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options exercised</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options exchanged for cash</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(896,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options surrendered for new options and restricted units</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(3,630,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options forfeited</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(622,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance outstanding&#151;January&nbsp;1, 2011</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>13,496,500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.49</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9.76</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,768,940</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance exercisable&#151;January&nbsp;1, 2011</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>24,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.22</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6.05</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The aggregate intrinsic value represents the total pretax intrinsic value (the difference between the exercise price and the sole stockholder's determined unit
value at January&nbsp;1, 2011, multiplied by the number of units whose fair value exceeded the exercise price at that date) that would have been received by the option holders if the options had
been exercised on January&nbsp;1, 2011. At January&nbsp;1, 2011, there were 13,460,500 units whose fair value exceeded the exercise price at that date. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
weighted average grant date fair value of options granted during the fiscal years ended January&nbsp;1, 2011 and December&nbsp;27, 2008, was $0.41 and $1.24 per option, respectively. No
options were exercised during the years ended January&nbsp;1, 2011 and December&nbsp;26, 2009. At January&nbsp;1, 2011, the Company expects approximately 11,590,380 options to vest. At
January&nbsp;1, 2011, these options have an aggregate intrinsic value of $3,235,730, a weighted average remaining contractual term of 9.76&nbsp;years and a weighted average exercise price of
$0.49. The total weighted average grant date fair value of options vested during the years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, was $1,614,060,
$1,981,000, and 1,275,870, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-42 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><BR><FONT SIZE=2><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> <BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A summary of restricted unit activity as of January&nbsp;1, 2011, and changes during the three years then ended follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Restricted<BR>
units</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance outstanding&#151;December&nbsp;29, 2007</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restricted units granted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restricted units vested</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(22,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance outstanding&#151;December&nbsp;27, 2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restricted units granted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restricted units vested</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance outstanding&#151;December&nbsp;26, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restricted units granted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3,337,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restricted units vested</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance outstanding&#151;January&nbsp;1, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3,337,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The aggregate intrinsic value of restricted units outstanding at January&nbsp;1, 2011 is $2,569,875. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Granted
but unvested restricted units are forfeited upon termination of employment. At January&nbsp;1, 2011, the Company expects approximately 2,738,660 restricted units to vest. At
January&nbsp;1, 2011, these restricted units have an aggregate intrinsic value of $2,108,768, a weighted average remaining contractual term of 2.77&nbsp;years and a weighted average grant date
fair value of $0.63. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
summary of the status of the Company's unvested options and restricted units as of January&nbsp;1, 2011, and changes during the year ended January&nbsp;1, 2011 follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="68pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="55pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Options</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Weighted-<BR>
average<BR>
grant date<BR>
fair value</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unvested at December&nbsp;26, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2,700,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.66</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Granted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13,460,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.41</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Vested</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(854,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.89</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Forfeited</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(102,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.57</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Exchanged for cash</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(331,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.45</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Surrendered for new options and restricted units</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1,401,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.57</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expired</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unvested at January&nbsp;1, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13,472,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.41</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-43 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=206,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=521160,FOLIO='F-43',FILE='DISK108:[11ZAS1.11ZAS12701]FW12701A.;32',USER='KSEAMON',CD='29-OCT-2011;18:59' -->
<A NAME="page_fw12701_1_44"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I><BR>  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="55pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Restricted<BR>
units</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Weighted-<BR>
average<BR>
grant date<BR>
fair value</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unvested at December&nbsp;26, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.00</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Granted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3,337,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.63</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Forfeited</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unvested at January&nbsp;1, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3,337,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.63</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>As of January&nbsp;1, 2011, there was $8,057,775 of total unrecognized compensation expense related to unvested stock-based compensation granted. The cost is
expected to be recognized over a weighted average period of 2.77&nbsp;years. As of January&nbsp;1, 2011 and December&nbsp;26, 2009, 24,000 and 2,484,000 options, respectively, were vested. As of
January&nbsp;1, 2011, the Company has 13,472,500 options that are unvested and 3,337,500 restricted units that are unvested. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fw12701_10._fair_value_measurements"> </A>
<A NAME="toc_fw12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  10. FAIR VALUE MEASUREMENTS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Fair Value Measurements on Recurring Basis</B></FONT><FONT SIZE=2>&#151;The Company measures the fair value of certain assets and liabilities on a recurring basis based upon a fair value
hierarchy in accordance with ASC&nbsp;820, </FONT><FONT SIZE=2><I>Fair Value Measurements and Disclosures</I></FONT><FONT SIZE=2>, as follows: </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Level&nbsp;1&#151;Observable
inputs such as quoted prices in active markets; </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Level&nbsp;2&#151;Inputs,
other than the quoted prices in active markets, that are observable either directly or indirectly; and </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Level&nbsp;3&#151;Unobservable
inputs in which there is little or no market data, which require the Company to develop its own assumptions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-44 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=207,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=861098,FOLIO='F-44',FILE='DISK108:[11ZAS1.11ZAS12701]FW12701A.;32',USER='KSEAMON',CD='29-OCT-2011;18:59' -->
<A NAME="page_fw12701_1_45"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Liabilities
measured at fair value on a recurring basis include interest rate swaps and embedded derivatives. The following table presents information about the Company's liabilities measured at fair
value on a recurring basis as of January&nbsp;1, 2011 and December&nbsp;26, 2009 (in&nbsp;millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fair value measurements at<BR>
reporting date using </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
carrying<BR>
value</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Quoted<BR>
prices in<BR>
active<BR>
markets<BR>
for<BR>
identical<BR>
assets<BR>
(Level&nbsp;1)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Significant<BR>
other<BR>
observable<BR>
inputs<BR>
(Level&nbsp;2)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Significant<BR>
unobservable<BR>
inputs<BR>
(Level&nbsp;3)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>January&nbsp;1, 2011:</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Liabilities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest rate swaps<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative liability</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>66.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>66.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>December&nbsp;26, 2009:</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Liabilities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest rate swaps<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative liability</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>27.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>27.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

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  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Included in other liabilities in the consolidated balance sheet.  </I></FONT></DD></DL>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company's interest rate swaps are determined based on market prices for similar instruments in active markets and are classified as Level&nbsp;2.
Valuations using discounted cash flows are classified within Level&nbsp;3 as these valuations were determined by valuation techniques based upon assumed conversion feature activity and discounting
those cash flows at a rate reflective of current market conditions and factors specific to the Company. The Company's embedded derivative liabilities are measured using Level&nbsp;3 inputs. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-45 </B></FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=208,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=763362,FOLIO='F-45',FILE='DISK108:[11ZAS1.11ZAS12701]FW12701A.;32',USER='KSEAMON',CD='29-OCT-2011;18:59' -->
<A NAME="page_fw12701_1_46"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table presents the changes in Level&nbsp;3 liabilities measured on a recurring basis for the years ended January&nbsp;1, 2011 and December&nbsp;26, 2009 (in&nbsp;millions): </FONT></P>
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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Embedded<BR>
derivative<BR>
liability </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>CPCs</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Debt</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance&#151;December&nbsp;27, 2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net change in fair value included in earnings</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>27.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Translation adjustment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance&#151;December&nbsp;26, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
27.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Initial fair value of Class&nbsp;C CPCs</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
56.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Initial fair value of Senior Secured and Mezzanine Debt</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net change in fair value included in earnings</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(21.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(3.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Translation adjustment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance&#151;January&nbsp;1, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>60.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Fair Value Measurements on a Nonrecurring Basis</B></FONT><FONT SIZE=2>&#151;Certain assets and liabilities are not measured at fair value but are recognized and disclosed at fair value on a
nonrecurring basis. During fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, such measures of fair value related primarily to the evaluation of
impairment of property, plant, and equipment associated with closed manufacturing facilities and the impairment of goodwill. During fiscal years ended December&nbsp;26, 2009 and December&nbsp;27,
2008, property, plant, and equipment was determined to be impaired for certain assets and resulted in impairment charges of $4.1&nbsp;million and $3.3&nbsp;million, respectively. There were no
such impairment charges for the fiscal year ended January&nbsp;1, 2011. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fw12701_11._restructuring_costs"> </A>
<A NAME="toc_fw12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  11. RESTRUCTURING COSTS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>During fiscal year 2010, the Company continued restructuring activities that began in fiscal year 2008 to streamline the Company's organizational
structure, reduce labor costs and improve manufacturing capacity utilization. The Company recorded restructuring expense of $4.8&nbsp;million, $18.1&nbsp;million, and $7.7&nbsp;million as a
separate line item in the consolidated statements of operations for the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008, respectively. Since the
inception of this restructuring initiative, the Company has incurred costs totaling $30.6&nbsp;million. All major restructuring activities are substantially complete and the Company expects
restructuring expenses to be minimal in fiscal year 2011. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-46 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
roll forward of accrued restructuring costs for the fiscal years ended January&nbsp;1, 2011 and December&nbsp;26, 2009, is presented as follows: </FONT></P>
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<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="37pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Termination<BR>
benefits</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Facility<BR>
closure<BR>
costs</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Professional<BR>
fees</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance at December&nbsp;27, 2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring expense</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>18.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash payments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(3.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(3.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(8.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(14.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Noncash charges<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance at December&nbsp;26, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring expense</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash payments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(3.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(5.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance at January&nbsp;1, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="fw12701_12._income_taxes"> </A>
<A NAME="toc_fw12701_3"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  12. INCOME TAXES    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Geographic sources of income (loss) before taxes from continuing operations for the fiscal years ended January&nbsp;1, 2011, December&nbsp;26,
2009, and December&nbsp;27, 2008 are as follows (in&nbsp;millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;27,<BR>
2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=10 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(33.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(34.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(41.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>62.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(50.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>96.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>29.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(85.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>54.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-47 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=210,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=312135,FOLIO='F-47',FILE='DISK108:[11ZAS1.11ZAS12701]FW12701A.;32',USER='KSEAMON',CD='29-OCT-2011;18:59' -->
<A NAME="page_fw12701_1_48"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>
 </DIV>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Significant components of the Company's income tax provision (benefit) from continuing operations for the fiscal years ended January&nbsp;1, 2011,
December&nbsp;26, 2009, and December&nbsp;27, 2008 are as follows (in&nbsp;millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Current</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Deferred</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fiscal year ended January&nbsp;1, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Federal</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>19.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. State</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>19.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fiscal year ended December&nbsp;26, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Federal</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. State</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fiscal year ended December&nbsp;27, 2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. Federal</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>U.S. State</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The reconciliation between the Company's effective tax rate on income from continuing operations and the statutory tax rate is as follows for fiscal years 2010,
2009, and 2008: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


</FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;27,<BR>
2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=10 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Income taxes at Luxembourg rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>28.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>28.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>29.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign income tax rate differential</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (2.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Nondeductible expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Goodwill impairment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Change in uncertain tax positions</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>115.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (1.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Change in valuation allowance</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (60.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (38.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (37.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>82.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2> (7.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company's provision for income taxes from discontinued operations was not material for the years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and
December&nbsp;27, 2008. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Deferred
tax benefits recognized in income tax expense resulting from operating loss carryforwards were $0, $2.9&nbsp;million, and $0.5&nbsp;million for the years ended January&nbsp;1, 2011,
December&nbsp;26, 2009, and December&nbsp;27, 2008, respectively. Deferred tax benefit of approximately $0.3&nbsp;million, $0.3&nbsp;million, and $0.2&nbsp;million and deferred tax expenses
of approximately $0.3&nbsp;million, $0.6&nbsp;million, and $0.1&nbsp;million were attributable to statutory rate change adjustments for the years ended January&nbsp;1, 2011,
December&nbsp;26, 2009, and December&nbsp;27, 2008, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-48 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=211,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=774056,FOLIO='F-48',FILE='DISK108:[11ZAS1.11ZAS12701]FW12701A.;32',USER='KSEAMON',CD='29-OCT-2011;18:59' -->
<A NAME="page_fw12701_1_49"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>An
income tax provision has been recorded related to Taiwan withholding taxes in the amount of $0.8&nbsp;million and $0.7&nbsp;million for the years ended January&nbsp;1, 2011 and
December&nbsp;26, 2009, respectively. No income tax provision has been made for the remaining amount of undistributed earnings of foreign subsidiaries deemed permanently reinvested or expected to be
distributed in a tax-free transaction. Cumulatively these undistributed earnings were approximately $13.0&nbsp;million and $10.0&nbsp;million at January&nbsp;1, 2011 and
December&nbsp;26, 2009, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Deferred
tax assets and liabilities as of January&nbsp;1, 2011 and December&nbsp;26, 2009 are comprised of the following (in&nbsp;millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

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<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
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<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred tax assets:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accounts receivable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Inventory</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Property, plant, and equipment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net operating losses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>79.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>110.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accruals</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pensions</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Derivatives</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross deferred tax assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>128.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>149.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Valuation allowance</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
(104.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
(126.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total deferred tax assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>23.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>22.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred tax liabilities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Property, plant, and equipment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(5.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(6.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Note discount</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(10.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Intangible assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(3.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(5.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total deferred tax liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(18.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(13.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net deferred tax assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>As of January&nbsp;1, 2011, the Company had, for income tax reporting purposes, net operating loss carryforwards of approximately $292.3&nbsp;million in
various taxing jurisdictions, of which $20.5&nbsp;million expire in varying amounts between 2011 and 2030. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Internal
Revenue Code Section&nbsp;382 ("Section&nbsp;382") imposes limitations on the availability of a company's net operating losses after certain ownership changes occur. The
Section&nbsp;382 limitation is based upon certain conclusions pertaining to the dates of ownership changes and the value of the Company on the dates of the ownership changes. It was determined that
an ownership change occurred in September&nbsp;2010. The amount of the Company's net operating losses incurred prior to the ownership change is limited based on the value of the Company on the
ownership change date. Management has determined the amount of net operating losses generated prior to the ownership change available to offset taxable income subsequent to the </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-49 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>ownership
change to be nominal. Therefore, the Company has removed federal net operating loss carryforwards of $77.3&nbsp;million and state net operating loss carryforwards of $65.5&nbsp;million
generated prior to the ownership change from its deferred tax assets accompanied by a corresponding reduction of the valuation allowance. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company records a valuation allowance on the deferred tax assets to reduce such assets to an amount management believes is more likely than not to be realized. The valuation decreased by
$21.4&nbsp;million during 2010. The valuation allowance as of January&nbsp;1, 2011 and December&nbsp;26, 2009, was principally to offset certain deferred income tax assets related to net
operating loss ("NOL") carryforwards. Net deferred tax assets have been recognized in tax jurisdictions where management believes it is more likely than not that such assets will be
realized. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows (in&nbsp;millions): </FONT></P>
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<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Beginning unrecognized tax benefit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>19.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>19.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross increase in tax positions in prior period</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>18.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross decrease in tax positions in prior period</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(2.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross increase in tax positions in current period</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Lapse of statute</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Settlements</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign exchange differences</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ending unrecognized tax benefit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>51.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>19.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Of the total unrecognized tax benefits for the fiscal years ended January&nbsp;1, 2011 and December&nbsp;26, 2009, $50.5&nbsp;million and
$18.4&nbsp;million, respectively, represent the amount that, if recognized, and prior to a consideration of the need for a valuation allowance, would have a favorable effect on the Company's
effective tax rate in any future periods. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company recorded
tax-related interest expense of $0.9&nbsp;million $0.1&nbsp;million, and $0.4&nbsp;million for the years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and
December&nbsp;27, 2008, respectively. The Company recorded no tax-related penalties for the years ended January&nbsp;1, 2011 and December&nbsp;29, 2009, and $0.2&nbsp;million for
the year ended December&nbsp;27, 2008. The total gross amount of accrued interest is $2.0&nbsp;million as of January&nbsp;1, 2011 and $1.1&nbsp;million as of December&nbsp;26, 2009. The
gross amount of accrued penalties is $0.2&nbsp;million as of both January&nbsp;1, 2011 and December&nbsp;26, 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company files income tax returns with federal, state, local, and foreign jurisdictions and is subject to reviews and U.S. audits of those returns. Currently, the Internal Revenue Service ("IRS")
is examining the 2008 and 2009 federal income tax returns. The Company is no longer subject to IRS examination for periods prior to 2007, although carryforward attributes that were generated prior to
2007 may still be adjusted upon examination by the IRS if they either have been or will be used in a future period. The Company's German income tax returns are also under examination by taxing
authorities for the years 2004 to 2007. With a few exceptions, the Company is no longer subject to examination for years prior to 2004. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-50 </B></FONT></P>

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<A NAME="page_fw12701_1_51"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As
a result of the settlements with taxing authorities, it is reasonably possible that the total amounts of unrecognized tax benefits as of January&nbsp;1, 2011 will decrease by up to
$11.7&nbsp;million during the next twelve months. The amount of the reduction that would have a favorable impact on the Company's provision for income taxes is $10.9&nbsp;million. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fw12701_13._related-party_transactions"> </A>
<A NAME="toc_fw12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  13. RELATED-PARTY TRANSACTIONS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On September&nbsp;30, 2010, a subsidiary of the Company entered into the Financing Transaction (see Notes&nbsp;4 and 5). The Company received
$376.4&nbsp;million in aggregate proceeds in connection with the Financing Transaction. A syndicate of lenders who obtained an ownership interest in the sole shareholder of the Company as part of
the Financing Transaction provided $369.4&nbsp;million of the aggregate proceeds. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Certain
subsidiaries of the Company are party to a management services agreement with a related party to provide continuing business strategy, management consulting, and financial advisory services.
The Company recorded $2.1&nbsp;million in fees related to this agreement during each fiscal year ended January&nbsp;1, 2010, December&nbsp;26, 2009 and December&nbsp;27, 2008, which is
included in selling, general and administrative expense in the consolidated statement of operations. Amounts payable to the related party totaled $1.0&nbsp;million and $2.0&nbsp;million at
January&nbsp;1, 2011 and December&nbsp;26, 2009, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
conjunction with the purchase of the Company in 2004, an exclusive distributorship right for the United States was granted to a noncontrolling owner of the sole stockholder. Sales to the related
party totaled $33.8&nbsp;million, $23.5&nbsp;million and $34.8&nbsp;million during the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008,
respectively. Receivables from the related party totaled $4.4&nbsp;million and $4.1&nbsp;million at January&nbsp;1, 2011 and December&nbsp;26, 2009, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fw12701_14._business_segments_and_geographic_information"> </A>
<A NAME="toc_fw12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  14. BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company manages the business through three reportable operating segments, which are defined by the geographic regions in which the Company
operates (U.S., Europe, and Asia). Each region has separate management teams and reporting structures and provides similar products to a similar set of customers. Segment information is consistent
with how the chief operating decision maker reviews the business, makes investing and resource allocation decisions and assesses overall operating performance. The Company evaluates performance based
upon several factors, of which the primary financial measure is segment operating income (loss). Segment operating income (loss) does not include certain corporate operating costs such as
administrative, legal, sales and marketing, and research and development costs. The Company believes that information about segment operating income (loss) assists all users of the Company's
consolidated financial statements by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from nonoperational factors that affect net income,
thus providing insight into both operations and the other factors that affect reported results. The accounting policies of the segments are the same as those described in Note&nbsp;1. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-51 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><BR><FONT SIZE=2><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> <BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table presents certain results of operations and balance sheet information by identified segments (in thousands): </FONT></P>
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<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Asia</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Europe</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>U.S.</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Corporate</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fiscal year ended January&nbsp;1, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>External revenues</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>349,421</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>133,457</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>129,109</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>611,987</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating income / (loss)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>58,777</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3,958</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>16,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(14,984</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>64,651</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Depreciation and amortization</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,603</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4,229</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,564</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>541</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>16,937</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Segment assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>205,792</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>73,804</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>72,580</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>25,018</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>377,194</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fiscal year ended December&nbsp;26, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>External revenues</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>226,588</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>89,277</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100,275</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>416,140</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating income / (loss)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>21,755</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(8,578</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2,561</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(17,211</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1,473</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Depreciation and amortization</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7,754</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,803</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5,833</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>447</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>19,837</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Segment assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>193,800</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>81,191</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>81,771</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,090</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>357,852</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fiscal year ended December&nbsp;27, 2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>External revenues</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>310,379</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>126,967</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>132,987</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>570,333</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating income / (loss)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>27,684</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(6,523</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(11,884</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(15,627</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(6,350</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Depreciation and amortization</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9,335</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,609</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7,470</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>358</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>23,772</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Corporate expenses reflected in operating income (loss) consist primarily of administrative, legal, sales and marketing, and research and development costs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Operating
loss for the year ended December&nbsp;27, 2008 reflects goodwill impairment charges of $8.5&nbsp;million recorded in the U.S. segment. During fiscal years 2009 and 2008, the Company
recorded $4.1&nbsp;million and $3.3&nbsp;million, respectively, in asset impairments related to the closure of manufacturing facilities in the Asia and U.S. segments, respectively. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>One
customer accounted for $78.0&nbsp;million, $49.6&nbsp;million, and $85.1&nbsp;million of revenue for the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009, and
December&nbsp;27, 2008, respectively. Sales to that customer in the Asia segment were $63.8&nbsp;million, $38.0&nbsp;million, and $66.6&nbsp;million for fiscal years 2010, 2009, and 2008,
respectively. Sales to that customer in the U.S. segment were $14.2&nbsp;million, $11.6&nbsp;million, and $18.5&nbsp;million for fiscal years 2010, 2009, and 2008, respectively. The Europe
segment did not have any sales to the customer for the periods presented. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Revenue
is attributable to geographic regions and countries based on the location where the transaction occurred and the product was manufactured. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-52 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=215,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=924110,FOLIO='F-52',FILE='DISK108:[11ZAS1.11ZAS12701]FY12701A.;48',USER='KSEAMON',CD='29-OCT-2011;20:25' -->
<A NAME="page_fy12701_1_53"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table presents revenues according to the country of origin (in thousands): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;27,<BR>
2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=10 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>China</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>139,119</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>99,693</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>121,485</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Germany</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>131,509</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>87,714</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>123,934</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Taiwan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>91,265</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>52,506</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>65,616</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Hong Kong</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>68,235</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>34,366</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>72,696</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>52,750</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>41,586</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>53,615</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total foreign countries</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>482,878</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>315,865</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>437,346</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>United States</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>129,109</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100,275</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>132,987</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Totals</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>611,987</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>416,140</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>570,333</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table presents tangible long-lived assets based on the physical location of the asset: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Long-lived assets </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Taiwan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>25,881</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24,371</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Germany</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>26,088</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>28,144</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>China</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>23,671</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24,435</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Italy</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>18,813</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20,743</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12,790</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7,259</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total foreign countries</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>107,243</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>104,952</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>United States</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>32,354</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>37,988</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Totals</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>139,597</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>142,940</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="fy12701_15._discontinued_operations"> </A>
<A NAME="toc_fy12701_1"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  15. DISCONTINUED OPERATIONS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>During fiscal year 2009, the Company developed plans to cease operations and close one of its subsidiaries located in Italy. Closure of the
subsidiary was necessitated by an increase in excess manufacturing capacity within the European business segment due to the overall decline in the global economy. The closure was completed in
December&nbsp;2009 when the Company received approval for a Concordato Preventivo from local authorities. A Concordato Preventivo is a legal process whereby the creditors of the Company and the
Company reach a mutual agreement regarding repayment of outstanding debts. Upon approval from local authorities, the Company's interest in the subsidiary is essentially abandoned and all assets of the
subsidiary become property of the courts to liquidate for the benefit of the creditors. For fiscal year 2009, the Company recorded a loss from operations of the subsidiary of $5.6&nbsp;million and a
loss from the disposal of the subsidiary of $3.6&nbsp;million. In fiscal 2008, a loss from operations of the subsidiary of $11.7&nbsp;million was recorded. Revenues from the subsidiary were
$8.1&nbsp;million and $33.2&nbsp;million in the fiscal years ended December&nbsp;26, 2009 and December&nbsp;27, 2008, respectively. The tax impact for fiscal years 2009 and 2008 was not
material. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-53 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=216,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=288671,FOLIO='F-53',FILE='DISK108:[11ZAS1.11ZAS12701]FY12701A.;48',USER='KSEAMON',CD='29-OCT-2011;20:25' -->
<A NAME="page_fy12701_1_54"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fy12701_16._earnings_per_share"> </A>
<A NAME="toc_fy12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  16. EARNINGS PER SHARE    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Basic earnings per share ("EPS") is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the
period. Diluted EPS is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. The shares
underlying the CPCs were not included in the computation of diluted EPS for any periods presented as the shares were considered contingently issuable (see Note&nbsp;5). </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table summarizes the computation of basic and diluted EPS for the fiscal years ended January&nbsp;1, 2011, December&nbsp;26, 2009 and December&nbsp;27, 2008: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>December&nbsp;27,<BR>
2008</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=10 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands, except for share and per share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income / (loss) from continuing operations</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(91,549</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>47,454</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income / (loss) from discontinued operations</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(9,177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(11,655</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income / (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(100,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35,799</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted average common shares outstanding&#151;basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted average number of common and potential common shares outstanding&#151;diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic and diluted net income / (loss) per common share</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Continuing operations</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.16</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(183.10</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>94.91</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Discontinued operations</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(18.35</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(23.31</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.16</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(201.45</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>71.60</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="fy12701_unaudited_pro_forma_net_income_/_(loss)_per_share"> </A>
<A NAME="toc_fy12701_3"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  Unaudited Pro Forma Net Income / (Loss) Per Share    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In connection with the Reorganization, all of the outstanding securities of Isola Group S.a.r.l, including the common shares and convertible
preferred certificates, will be contributed by TPG to Isola Group&nbsp;Ltd., which will result in Isola Group&nbsp;Ltd. becoming our new holding company and Isola Group S.a.r.l. becoming a
subsidiary of Isola Group&nbsp;Ltd. The unaudited pro forma basic and diluted net income (loss) per share for the year ended January&nbsp;1, 2011 reflects the effective conversion of all
outstanding common stock and convertible preferred certificates into ordinary shares of Isola Group&nbsp;Ltd. as though the conversion had occurred as of the beginning of the period or the original
date of issuance, if later. In addition, the pro forma amounts give effect to the termination of all outstanding stock-based awards associated with TPG and the replacement of such awards with awards
of Isola Group&nbsp;Ltd., with substantially the same terms, as of the beginning of the period. The unaudited pro forma basic and diluted net income (loss) per share has been presented in accordance
with SEC Staff Accounting Bulletin Topic I.B.3. The numerator in the pro forma basic and diluted net income (loss) per share calculation has been adjusted (i)&nbsp;to remove gains and losses
resulting from the change in fair value of the embedded derivative liability related to the CPCs, (ii)&nbsp;to remove accreted interest expense related to the CPCs, and (iii)&nbsp;to remove
foreign exchange gains and losses related to the CPCs and the associated embedded derivative liability. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-54 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=217,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=718074,FOLIO='F-54',FILE='DISK108:[11ZAS1.11ZAS12701]FY12701A.;48',USER='KSEAMON',CD='29-OCT-2011;20:25' -->
<A NAME="page_fy12701_1_55"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)<BR>
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended<BR>
January 1, 2011, December 26, 2009, and December 27, 2008 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table summarizes the computation of pro forma basic and diluted EPS for the fiscal year ended January&nbsp;1, 2011 </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="107pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands, except for share and per share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income / (loss)&#151;basic</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma adjustments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accreted interest on CPCs and amortization of discount</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative gain / (loss)&#151;CPCs</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign exchange (gain) loss</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income / (loss) used to compute pro forma net income / (loss) per share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted average ordinary shares outstanding&#151;basic</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma adjustments&#151;basic</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assumed weighted-average effect of conversion of CPCs</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma weighted average ordinary shares outstanding&#151;basic</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma net income / (loss) per ordinary share&#151;basic</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma weighted average ordinary shares outstanding&#151;basic</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma adjustments&#151;diluted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assumed issuance of stock options and restricted units in Isola Group Ltd.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma weighted average ordinary shares outstanding&#151;diluted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma net income / (loss) per ordinary share&#151;diluted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Pro forma net income / (loss) per share excludes stock-based awards
underlying&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares of Isola Group Ltd. expected to be outstanding
subsequent to the Reorganization because their effect would have been anti-dilutive. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="fy12701_17._restricted_net_assets"> </A>
<A NAME="toc_fy12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  17. RESTRICTED NET ASSETS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As specified in the credit arrangements entered into by the Company and its wholly-owned subsidiary, Isola USA Corp, the Company is required to
maintain certain financial and operating covenants (See Note&nbsp;4 to the consolidated financial statements). As a result of these covenants, the Company's subsidiaries are restricted in their
ability to provide any dividends, loans or advances to the Parent Company, with the exception of limited circumstances, such as payments of regular management fees and
out-of-pocket expenses, which are not to exceed certain dollar limits, and pursuant to a management services agreement entered into with a related party, as well as certain
transactions in the ordinary course of business and consistent with past practices. As of January&nbsp;1, 2011, the balance of the Subsidiary's restricted net assets amounted to $159.0 million,
representing 94.1% of total consolidated net assets excluding subsidiaries with net liabilities. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>******
</FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-55 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=218,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=402229,FOLIO='F-55',FILE='DISK108:[11ZAS1.11ZAS12701]FY12701A.;48',USER='KSEAMON',CD='29-OCT-2011;20:25' -->
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NAME="page_gm12701_1_56"> </A>


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</FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gm12701_isola_group_s.a.r.l._and_subsi__iso05779"> </A>
<A NAME="toc_gm12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.    <BR>


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<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>CONDENSED CONSOLIDATED BALANCE SHEETS    <BR>    <BR>  As of July 2, 2011 and January 1, 2011    <BR>        <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:times;"></TD>
<TD WIDTH="9pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Pro forma<BR>
July&nbsp;2,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=12 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>(Note&nbsp;1)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands, except for share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>ASSETS</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CURRENT ASSETS:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>56,010</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,733</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restricted cash</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,461</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accounts receivable, net of allowance for doubtful accounts of $3,837 and $3,896 at July&nbsp;2, 2011 and January&nbsp;1, 2011, respectively</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>118,304</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>103,489</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other receivables</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,294</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,739</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Inventories</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>43,118</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>45,066</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred tax assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,783</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,697</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Prepaid expenses and other current assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,028</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,023</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total current assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>228,537</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>201,208</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>RESTRICTED CASH</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,957</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,886</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>PROPERTY, PLANT, AND EQUIPMENT&#151;Net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>139,586</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>139,597</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>INTANGIBLE ASSETS&#151;Net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,796</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,421</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>DEFERRED TAX ASSETS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,883</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,747</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>DEBT ISSUANCE COSTS AND OTHER ASSETS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17,607</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,335</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL ASSETS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>402,366</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>377,194</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>LIABILITIES AND STOCKHOLDER'S DEFICIENCY</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CURRENT LIABILITIES:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accounts payable</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>80,644</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>70,156</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Short-term debt and current portion&#151;long-term debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,017</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21,084</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>52,396</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>38,964</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred tax liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>293</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>277</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>892</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,122</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>149,242</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>131,603</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>LONG-TERM DEBT&#151;Net of current portion</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>304,168</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>292,079</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CONVERTIBLE PREFERRED CERTIFICATES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>224,679</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>199,136</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CAPITAL LEASE OBLIGATIONS&#151;Net of current portion</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,616</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14,468</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>EMBEDDED DERIVATIVE</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>54,087</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>66,395</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>PENSION AND OTHER RETIREMENT BENEFITS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>41,670</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>42,532</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>UNCERTAIN TAX POSITIONS AND OTHER LIABILITIES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25,306</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23,446</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>DEFERRED TAX LIABILITIES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,492</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,099</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>820,260</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>774,758</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>COMMITMENTS AND CONTINGENCIES (Note&nbsp;8)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>STOCKHOLDER'S DEFICIENCY:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Common stock, 25&nbsp;Euro par value ($31)&#151;500 shares authorized, issued, and outstanding</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Additional paid-in capital</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>31,864</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>30,652</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated deficit</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(413,709</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(394,602</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated other comprehensive loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(36,064</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(33,629</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total stockholder's deficiency</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(417,894</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(397,564</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>402,366</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>377,194</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>See accompanying notes to condensed consolidated financial statements (unaudited). </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-56 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="go12701_isola_group_s.a.r.l._and_subsi__iso07268"> </A>
<A NAME="toc_go12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG&nbsp;HATTRICK&nbsp;PARTNERS,&nbsp;L.P.    <BR>


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    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)    <BR>    <BR>  For the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010    <BR>        <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>June&nbsp;26, 2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In&nbsp;thousands, except for share and per&nbsp;share&nbsp;data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>REVENUES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>316,583</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>306,957</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>COST OF GOODS SOLD</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>240,433</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>231,908</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>GROSS PROFIT</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>76,150</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>75,049</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>OPERATING EXPENSES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Sales, general, and administrative</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>38,371</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>31,343</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Research and development</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,193</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,817</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,464</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>43,741</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>39,624</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>OPERATING INCOME</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>32,409</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35,425</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>OTHER INCOME&#151;Net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,031</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,005</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>EMBEDDED DERIVATIVE GAIN / (LOSS)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17,472</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(58,162</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>INTEREST EXPENSE</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(39,032</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(26,997</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>INTEREST INCOME</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>94</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>159</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>FOREIGN EXCHANGE GAIN / (LOSS)&#151;Net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(20,402</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27,863</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>LOSS BEFORE INCOME TAXES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(8,428</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(18,707</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>PROVISION FOR INCOME TAXES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(10,679</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(11,818</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>NET LOSS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(19,107</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(30,525</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>NET LOSS PER COMMON SHARE:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(38.21</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(61.05</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(38.21</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(61.05</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>WEIGHTED AVERAGE NUMBER OF COMMON AND POTENTIAL COMMON SHARES OUTSTANDING:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>PRO FORMA NET LOSS PER SHARE (unaudited)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>ORDINARY SHARE:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>WEIGHTED AVERAGE NUMBER OF ORDINARY AND POTENTIAL ORDINARY SHARES USED IN COMPUTING PRO&nbsp;FORMA NET LOSS PER SHARE:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>See accompanying notes to condensed consolidated financial statements (unaudited). </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-57 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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NAME="gq12701_isola_group_s.a.r.l._and_subsi__iso08402"> </A>
<A NAME="toc_gq12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG&nbsp;HATTRICK&nbsp;PARTNERS,&nbsp;L.P.    <BR>


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    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER'S DEFICIENCY AND COMPREHENSIVE LOSS (UNAUDITED)    <BR>    <BR>  For the six months ended July&nbsp;2, 2011    <BR>        <BR>    </B></FONT></P>
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<TD WIDTH="9pt" style="font-family:times;"></TD>
<TD WIDTH="9pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="35pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="75pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="70pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Common stock </B></FONT></TH>
<TH ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Additional<BR>
paid-in<BR>
capital</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Accumulated<BR>
other<BR>
comprehensive<BR>
loss</B></FONT><BR></TH>
<TH ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
stockholder's<BR>
deficiency</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Accumulated<BR>
deficit</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Shares</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=22 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands, except for share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:17pt;text-indent:-17pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>BALANCE&#151;January&nbsp;1, 2011</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>30,652</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(394,602</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(33,629</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(397,564</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:17pt;text-indent:-17pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Stock-based compensation</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,212</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,212</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:17pt;text-indent:-17pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Comprehensive loss:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:17pt;text-indent:-17pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(19,107</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(19,107</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:17pt;text-indent:-17pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other comprehensive loss after tax:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:17pt;text-indent:-17pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign currency translation loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,333</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,333</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:17pt;text-indent:-17pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Changes in unamortized benefit plan costs</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(102</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(102</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:17pt;text-indent:-17pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total comprehensive loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(21,542</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:17pt;text-indent:-17pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>BALANCE&#151;July&nbsp;2, 2011</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>31,864</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(413,709</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(36,064</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(417,894</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(concluded) </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>See
accompanying notes to condensed consolidated financial statements (unaudited). </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-58 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gs12701_isola_group_s.a.r.l._and_subsi__iso07241"> </A>
<A NAME="toc_gs12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.    <BR>


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    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)    <BR>    <BR>  For the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010    <BR>        <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:times;"></TD>
<TD WIDTH="9pt" style="font-family:times;"></TD>
<TD WIDTH="9pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="49pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="49pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>June&nbsp;26,<BR>
2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=10 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CASH FLOWS FROM OPERATING ACTIVITIES:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(19,107</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(30,525</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Adjustments to reconcile net loss to cash used in operating activities:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Depreciation and amortization</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,683</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,464</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Provision of doubtful accounts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(265</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(314</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Change in fair value of derivatives</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(17,472</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>58,339</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign currency translation</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,874</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(27,939</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amortization of debt issuance costs</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,028</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>618</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accreted interest on debt and amortization of discount</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12,211</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accreted interest on convertible preferred certificates and amortization of discount</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,750</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,748</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Stock-based compensation expense</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,212</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>803</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gain on dispositions</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(302</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Change in operating assets and liabilities:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accounts receivable</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(12,974</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(33,933</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other receivables</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>484</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(3,135</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Inventories</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,916</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(13,262</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Prepaid expenses and other current assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(964</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,091</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Debt issuance costs and other assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>761</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>61</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accounts payable</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,983</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>24,837</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12,366</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>34,798</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(167</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,298</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pension and other postretirement employee benefits</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,541</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(525</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Uncertain tax positions and other liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(47</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>786</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash provided by operating activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CASH FLOWS FROM INVESTING ACTIVITIES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proceeds from release of restricted cash</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,479</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,390</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Payments for acquisition of property, plant and equipment</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(4,798</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(4,236</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proceeds from dispositions</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>392</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>308</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash provided by / (used in) investing activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,073</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1,538</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CASH FLOWS FROM FINANCING ACTIVITIES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proceeds from debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,027</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(73</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Payments of debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(10,462</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Payments of capital leases</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(261</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(413</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash used in financing activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(6,696</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(486</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>EFFECT OF EXCHANGE RATES ON CASH</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,174</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(2,452</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>NET INCREASE IN CASH</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,277</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,250</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CASH&#151;Beginning of period</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,733</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>38,932</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CASH&#151;End of period</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>56,010</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>58,182</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 <P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-59 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><BR><FONT SIZE=2><B>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> <BR>
For the fiscal six months ended July 2, 2011 and June 26, 2010  </B></FONT></P>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
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<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>June&nbsp;26,<BR>
2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash payments during the period for:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18,563</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,159</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Income taxes</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,042</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,093</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING TRANSACTIONS:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Acquisition of fixed assets with a corresponding increase in accounts payable</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>562</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,142</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=2>See accompanying notes to condensed consolidated financial statements (unaudited). </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-60 </B></FONT></P>

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<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="NOTES2"></A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gw12701_isola_group_s.a.r.l._and_subsi__iso07701"> </A>
<A NAME="toc_gw12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.    <BR>


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    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)    <BR>    <BR>  As of July 2, 2011 and for the six months ended July 2, 2011    <BR>        <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gw12701_1._organization_and_summary_of__1._02423"> </A>
<A NAME="toc_gw12701_2"> </A></FONT> <FONT SIZE=2><B>  1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Nature of Business</B></FONT><FONT SIZE=2>&#151;Isola Group, S.a.r.l. (the "Company") is a holding company incorporated in Luxembourg whose subsidiaries manufacture and sell laminate products
across Europe, Asia, and the United States of America. Corporate headquarters are located in Chandler, Arizona. The Company is a wholly owned subsidiary of TPG Hattrick Partners,&nbsp;L.P. ("TPG" or
the "sole stockholder"). </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company and certain of its subsidiaries were incorporated by TPG. TPG is a U.S. based limited partnership that was originally funded through cash investments by two Texas Pacific Group private
equity funds and by Redfern Partners, which is an affiliate of Insulectro, one of the Company's largest customers (see Note&nbsp;11). </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Reorganization</B></FONT><FONT SIZE=2>&#151;On September&nbsp;20, 2011, TPG formed a new company, Isola Group&nbsp;Ltd., in the Cayman Islands. Isola Group Ltd. has been authorized by its
board of directors to file a Registration Statement with the Securities and Exchange Commission ("SEC") permitting it to sell its ordinary shares in an initial public offering ("IPO"). Prior to the
IPO the Company will undergo a corporate reorganization that will include the following steps: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>all
of the outstanding securities of the Company, including common shares and convertible preferred certificates, will be contributed by TPG to Isola
Group&nbsp;Ltd., which will result in Isola Group&nbsp;Ltd. becoming our new holding company and the Company becoming a subsidiary of Isola Group&nbsp;Ltd.;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>TPG,
and TPG's general partner, TPG Hattrick Holdco,&nbsp;LLC, will be liquidated and the ordinary shares of Isola Group&nbsp;Ltd. will be distributed to their
sponsors; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>all
outstanding stock-based awards associated with TPG will be terminated and replaced with new options and restricted units of Isola Group&nbsp;Ltd. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Collectively
we refer to the above transactions as the Reorganization. The pro forma impact of the Reorganization is discussed further below and in Note&nbsp;13 to the condensed consolidated
financial statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Unaudited Pro Forma Balance Sheet</B></FONT><FONT SIZE=2>&#151;The unaudited pro forma balance sheet gives effect to the Reorganization as if it had occurred on July&nbsp;2, 2011.
Accordingly, it reflects the conversion of all outstanding common stock and convertible preferred certificates of the Company into ordinary shares of Isola Group&nbsp;Ltd. Additionally, the
unaudited pro forma balance sheet reflects the elimination of the embedded derivative liability associated with the convertible preferred certificates. The pro forma earnings per share impact of the
Reorganization is discussed further in Note&nbsp;13 to the condensed consolidated financial statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Basis of Presentation and Consolidation</B></FONT><FONT SIZE=2>&#151;The condensed consolidated financial statements consist of the accounts of the Company and subsidiaries, and reflect the
Company's financial position as of July&nbsp;2, 2011 and January&nbsp;1, 2011, and results of operations and cash flows for the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010. The
condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S.&nbsp;GAAP"). All intercompany balances and transactions have
been eliminated. The Company operates on either a 52- or 53-week fiscal year that ends on the Saturday closest to December&nbsp;31. Both of the six month periods ended
July&nbsp;2, 2011 and June&nbsp;26, 2010 consisted of 26&nbsp;weeks. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-61 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>These
condensed consolidated financial statements are unaudited and should be read in conjunction with the Company's historical annual audited consolidated financial statements and accompanying notes
thereto. In the opinion of management, all adjustments, consisting of normal recurring adjustments, and considered necessary for a fair presentation, have been included in the condensed consolidated
financial statements. The results of operations for the six-month period ended July&nbsp;2, 2011 are not necessarily indicative of the operating results that may be expected for the full
fiscal year ending December&nbsp;31, 2011 or any future period. The condensed consolidated balance sheet at January&nbsp;1, 2011 was derived from the audited consolidated financial statements at
that date
but does not include all of the information and footnotes required by U.S.&nbsp;GAAP for complete financial statements. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Events
that occurred after July&nbsp;2, 2011 and through October&nbsp;31, 2011, the date these financial statements were available to be issued, were considered in the preparation of these
financial statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Use of Estimates and Assumptions</B></FONT><FONT SIZE=2>&#151;The preparation of financial statements in conformity with U.S.&nbsp;GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting year. Significant items subject to such estimates and assumptions include, but are not limited to, the useful lives of fixed assets and definite lived intangible assets,
allowances for doubtful accounts, the valuation of derivative instruments, the valuation of deferred tax assets, the initial and recurring valuation of certain assets acquired through business
combinations (including goodwill and indefinite lived intangible assets), stock-based compensation, reserves for employee benefit obligations, income tax uncertainties and other contingencies. Actual
results could differ from these estimates under different assumptions or conditions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Foreign Currency Transactions and Translation</B></FONT><FONT SIZE=2>&#151;The Company's functional currency and reporting currency is the U.S. dollar. Gains and losses from foreign currency
transactions are included in the condensed consolidated statement of operations in the period they occur. Foreign currency transaction gains and losses, unrealized translation gains and losses
associated with certain foreign subsidiaries with a U.S. dollar functional currency that maintain their books of records in a currency other than the U.S dollar and unrealized translation gains and
losses on short-term intercompany and operating receivables and payables denominated in a currency other than the functional currency are included in foreign exchange gain / (loss) in the
condensed consolidated statement of operations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>For
the purposes of presenting condensed consolidated financial statements, the assets and liabilities of the Company's foreign operations where the local currency is also the functional currency are
translated into U.S. dollars using exchange rates prevailing at the end of each reporting period. Revenue and expense items are translated at the average exchange rates for the period. Exchange
differences arising, if any, are recognized as foreign currency translation gains or losses in other comprehensive loss on the condensed consolidated balance sheet. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Cash Equivalents and Restricted Cash</B></FONT><FONT SIZE=2>&#151;The Company considers all highly liquid debt investments with a maturity of three months or less when purchased to be cash
equivalents. These
investments are stated at cost, which approximates market value. Noncurrent restricted cash primarily relates to support letters of credit and retirement obligations in Germany and restricted cash in
current assets on the condensed consolidated balance sheet represents bank balances pledged as collateral, primarily for an entrustment loan held by the Company's subsidiary in Dalian, China. The loan
was denominated in Chinese Renminbi (see Note&nbsp;4). </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-62 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Accounts Receivable</B></FONT><FONT SIZE=2>&#151;The Company's accounts receivable are recorded at cost on the condensed consolidated balance sheet, net of allowances. Credit is extended based
on an evaluation of the customer's financial condition. Generally, collateral is not required. Credit risk associated with the Company's accounts receivable is mitigated by ongoing credit evaluations
of and frequent contact with customers, especially the most significant customers, which enables the Company to monitor changes in its customers' business operations and respond accordingly. The
Company estimates credit risk associated with accounts receivable by analyzing the creditworthiness of its customers based on past experience, changes in customer demand, as well as the general
economy and the industry as a whole. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Allowance for Doubtful Accounts</B></FONT><FONT SIZE=2>&#151;The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In
establishing the required allowance, management considers historical losses, current receivables aging, general and specific economic conditions, and local market conditions. The Company reviews its
allowance for doubtful accounts monthly. Past due balances meeting certain criteria are reviewed individually for collectability. All other balances are reviewed on a pooled basis. Account balances
are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet
credit exposure related to its customers. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Inventories</B></FONT><FONT SIZE=2>&#151;Inventories include the cost of materials, direct labor, and related manufacturing overhead and are stated at the lower of cost (computed using the
first-in, first-out method) or market. The Company adjusts inventory for estimated obsolescence or excess quantities based upon assumptions about future demand and market
conditions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Property, Plant, and Equipment</B></FONT><FONT SIZE=2>&#151;Property, plant, and equipment obtained through
acquisitions are recorded at fair value. All other property, plant, and equipment acquisitions are recorded at cost. Provisions for depreciation are calculated using the straight-line
method over the following estimated useful lives of the assets: </FONT></P>
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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Years</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Buildings and improvements</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15&#150;40</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Machinery and equipment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2&#150;15</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Assets held under capital leases are depreciated over their expected useful lives on the same basis as owned assets. If there is not reasonable certainty that
the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the lease term or its estimated useful life. Leasehold improvements are depreciated over
the estimated useful life of the related asset, or over the term of the lease, whichever is shorter. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Long-lived Assets</B></FONT><FONT SIZE=2>&#151;The Company reviews long-lived assets such as property, plant, and equipment, and acquired intangible assets subject to
amortization for impairment whenever events and circumstances indicate that the carrying amount may not be recoverable. In performing the review for recoverability, the Company estimates the future
undiscounted cash flows expected to result from the use of the assets and their eventual disposition in accordance with Accounting Standards Codification ("ASC") Property, Plant and Equipment ("ASC
360"). If an asset were deemed impaired, the amount of the impairment loss would be calculated based on the excess of the carrying amount of the asset over the estimated fair value. Fair value is
determined through various valuation techniques including discounted cash flow models, market comparables and other information, as considered necessary. Impairment losses are recorded to expense in </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-63 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=226,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=165299,FOLIO='F-63',FILE='DISK108:[11ZAS1.11ZAS12701]GW12701A.;52',USER='LSMITH',CD='30-OCT-2011;17:29' -->
<A NAME="page_gw12701_1_64"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>the
period in which they are identified. The estimation of future cash flows requires significant estimates of factors that include future sales growth and gross margin performance. If the Company's
sales growth, gross margin performance or other estimated operating results are not achieved at or
above their forecasted level, the carrying value of asset groups may prove to be unrecoverable and the Company may incur impairment charges in the future. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Intangible
assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was $0.6&nbsp;million for the six months ended both July&nbsp;2, 2011
and June&nbsp;26, 2010. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Debt Issuance Costs and Discounts</B></FONT><FONT SIZE=2>&#151;Debt issuance costs and discounts are capitalized and are amortized over the term of the related debt using the effective interest
method. Upon the extinguishment of the related debt, any unamortized debt issuance costs and discounts are immediately expensed. Unamortized debt issuance costs were $17.4&nbsp;million and
$18.3&nbsp;million at July&nbsp;2, 2011 and January&nbsp;1, 2011, respectively, and are included in other assets in the condensed consolidated balance sheets. Amortization of debt discounts is
discussed further in Note&nbsp;4. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Fair Value Measurements</B></FONT><FONT SIZE=2>&#151;The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the
financial statements on a recurring or nonrecurring basis. Fair value is defined as the amount that would be received from selling an asset or the amount that would be paid to settle a liability in an
orderly transaction between willing market participants in the primary or most advantageous market for that asset or liability. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company's financial instruments that are recognized and disclosed at fair value on a recurring basis are comprised primarily of derivative instruments, which include interest rate swaps and
embedded derivative instruments. The Company accounts for derivative instruments in accordance with the provisions of ASC&nbsp;815, </FONT><FONT SIZE=2><I>Derivative Instruments and Hedging
Activities</I></FONT><FONT SIZE=2> ("ASC&nbsp;815"). ASC&nbsp;815 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in
other contracts and hedging activities. ASC 815 requires the Company to record derivatives at their fair value on the balance sheet. At July&nbsp;2, 2011 and January&nbsp;1, 2011, the Company had
embedded derivatives in its convertible preferred certificates (see Note&nbsp;5) and in its senior and mezzanine credit agreements (see Note&nbsp;4). Changes in the fair value of these embedded
derivatives are recorded in the condensed consolidated statement of operations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Certain
non-financial assets and liabilities are measured at fair value on a non-recurring basis, including property, plant, and equipment, goodwill, and intangibles assets.
These assets are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. A description of the valuation methodologies used for assets and liabilities
measured at fair value, including the general classification of such assets and liabilities pursuant to the valuation hierarchy is included in each footnote with fair value measurement present. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company's principal financial instruments are cash, trade receivables, bank lines of credit, short-term bank debt, trade payables and other accrued liabilities, long-term
debt, including CPCs, and derivative instruments. With the exception of the Company's derivative instruments, which are recorded at fair value, and the Company's long-term debt and CPCs,
the carrying value of these financial instruments approximate fair values either because of the short maturities of these instruments, or because the interest rates are based upon variable reference
rates. The fair value of the Company's long-term debt is computed based upon interest rates of similar debt instruments. The Company engaged a third party consultant to assist in the
determination of the estimated fair value of the Company's long-term debt and CPCs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-64 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=227,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=562892,FOLIO='F-64',FILE='DISK108:[11ZAS1.11ZAS12701]GW12701A.;52',USER='LSMITH',CD='30-OCT-2011;17:29' -->
<A NAME="page_gw12701_1_65"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>See
Note&nbsp;5, Convertible Preferred Certificates, for further discussion regarding the Company's process for estimating fair value with respect to the CPCs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
carrying value and the fair value of the Company's long-term debt and CPCs are as follows (in thousands): </FONT></P>
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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="79pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Long-term debt:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Carrying value</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>304.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>292.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>337.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>331.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Convertible preferred certificates:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Carrying value</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>224.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>199.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>224.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>161.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Accounting for Income Taxes</B></FONT><FONT SIZE=2>&#151;The Company accounts for income taxes recorded in interim periods in accordance with ASC 740, Income Taxes ("ASC 740") where the income
tax provision is recorded based on an estimated annual effective tax rate applied to pre-tax net income, adjusted for discrete items that occurred during the period. The Company does not
adjust deferred tax assets and liabilities in interim periods. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company follows ASC 740-10, </FONT><FONT SIZE=2><I>Income Taxes</I></FONT><FONT SIZE=2> ("ASC 740-10"), which clarifies the accounting for uncertainty in income taxes
recognized in the financial statements. ASC 740-10 provides that a tax benefit from an uncertain tax position may be recognized based on the technical merits when it is more likely than
not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes. Income tax positions must meet a more likely than not recognition
threshold at the effective date to be recognized upon the adoption of ASC 740-10 and in subsequent periods. This standard also provides guidance on measurement, derecognition,
classification, interest and penalties, accounting in interim periods, disclosure and transition. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Pension Plans</B></FONT><FONT SIZE=2>&#151;The Company sponsors several pension plans that include qualified, noncontributory nonunion pension plans for certain salaried and hourly employees,
and bargaining unit pension plans covering retirees and vested former employees of the Company. The Company uses a December&nbsp;31 measurement date for its pension and other postretirement employee
benefit plans. The U.S. pension plans were frozen and curtailed prior to the 2004 acquisition of the Company. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Revenue Recognition</B></FONT><FONT SIZE=2>&#151;Revenue is recognized and earned when all of the following criteria are satisfied: (a)&nbsp;persuasive evidence of a sales arrangement exists;
(b)&nbsp;price is fixed or determinable; (c)&nbsp;collectability is reasonably assured; and (d)&nbsp;title and the risks and rewards of ownership have substantially transferred to the customer.
For the majority of the Company's sales transactions, revenue is recognized upon shipment of the finished product. Some shipping terms require the goods to be received by the customer before title
passes. In those instances, revenue is not recognized until the customer has received the goods. The Company's sales arrangements do not provide for post-shipment obligations. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-65 </B></FONT></P>

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<A NAME="page_gw12701_1_66"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Shipping and Handling Costs</B></FONT><FONT SIZE=2>&#151;The Company classifies shipping and handling costs as a part of cost of goods sold. Amounts billed to customers for shipping and
handling costs are included in revenues. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Certain Risks and Concentrations</B></FONT><FONT SIZE=2>&#151;Cash is maintained with several financial institutions. Deposits held with banks can exceed the amount of insurance provided on
such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear minimal credit risk. The Company maintains
its primary cash accounts with established banking institutions around the world. The Company estimates that approximately $34.1&nbsp;million of these deposits were not insured by the Federal
Deposit Insurance Corporation or similar entities outside of the United States as of July&nbsp;2, 2011. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company sells a significant amount of its products through intermediaries, such as distributors. Revenue from sales to distributors represented 9.5% and 10.5% of total revenues for six months
ended July&nbsp;2, 2011 and June&nbsp;26, 2010, respectively. If one of the Company's significant distributors terminates its distribution agreement, the Company could experience a significant
interruption in the distribution of its products. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Concentration
of credit risk with respect to the Company's trade receivables is limited by an ongoing credit evaluation process and the geographical dispersion of sales transactions. Collateral is
generally not required from the Company's customers. The allowance for doubtful accounts is based upon the expected collectability of all trade receivables. The Company had two customers that
accounted for 30.3% of the outstanding receivables at July&nbsp;2, 2011 and two customers that accounted for 27.6% of the outstanding trade receivables at January&nbsp;1, 2011. The Company also
had one customer that accounted for 12.5% and 12.8% of revenues for the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Contingencies</B></FONT><FONT SIZE=2>&#151;The Company is subject to a range of claims, lawsuits and administrative proceedings that arise in the ordinary course of business. The Company
accrues a liability and charges expense on the statement of operations for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated, in accordance
with the recognition criteria of ASC Topic 450, </FONT><FONT SIZE=2><I>Contingencies</I></FONT><FONT SIZE=2> ("ASC 450"). Estimating liabilities and costs associated with these matters requires
significant judgment and assessment based upon the professional knowledge and experience of management and its legal counsel. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Stock-based Compensation</B></FONT><FONT SIZE=2>&#151;Effective January&nbsp;1, 2006, the Company adopted the fair value method of accounting for stock-based compensation to employees in
accordance with ASC 718, </FONT><FONT SIZE=2><I>Compensation&#151;Stock Compensation</I></FONT><FONT SIZE=2> ("ASC 718"). Under the fair value recognition provisions of ASC 718, the Company
recognizes stock-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award. The fair value method requires companies to estimate the fair value of
stock-based payment awards on the grant date using an option pricing model. The Company adopted the fair value method using the prospective method which requires nonpublic entities that used the
minimum-value method for either pro forma or financial statement recognition purposes to apply the fair value method to stock-based awards issued on and after the date of adoption. Prior to the
adoption of the fair value method, the Company accounted for stock-based compensation using the minimum-value method for financial statement recognition purposes. For awards that have not yet vested
but were granted prior to the adoption of the fair value method, the Company continues to recognize stock-based compensation expense under the minimum value method. In addition, the Company continues
to amortize any stock-based compensation from awards granted prior to January&nbsp;1, 2006 and stock-based compensation from awards granted or modified after January&nbsp;1, 2006 on a
straight-line basis over the service period. The Company has elected to </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-66 </B></FONT></P>

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<A NAME="page_gw12701_1_67"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>use
the "with and without" approach in determining the order in which tax attributes are utilized. As a result, the Company will only recognize a tax benefit from stock-based awards in additional
paid-in capital if an incremental tax benefit is realized after all other tax attributes currently available to the Company have been utilized. For the six months ended July&nbsp;2, 2011
and June&nbsp;26, 2010, the Company incurred stock-based compensation expense of $1.2&nbsp;million and $0.8&nbsp;million, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On
January&nbsp;22, 2011, the Company granted 96,100 options to purchase partnership units in the sole stockholder of the Company. These options have an exercise price of $0.49 per unit and a grant
date fair value of $0.64 per unit. The options vest annually on the anniversary of the grant date over a three year period and bear a ten year contractual life. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On
January&nbsp;22, 2011, the Company also granted 54,700 restricted partner units in the limited partner common units of the sole stockholder of the Company. These restricted units have a grant
date fair value of $0.83 per unit and vest annually on the anniversary of the grant date over a three year period. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Accumulated Other Comprehensive Loss</B></FONT><FONT SIZE=2>&#151;As of July&nbsp;2, 2011, the Company's accumulated other comprehensive loss consisted of a cumulative foreign currency
translation loss of $14.5&nbsp;million, a cumulative loss related to foreign currency impact from changes in uncertain tax positions of $0.9&nbsp;million, and a cumulative loss from minimum
pension liability adjustments of $20.6&nbsp;million, which is net of tax effect of $0.4&nbsp;million. As of January&nbsp;1, 2011, the Company's accumulated other
comprehensive loss consisted of a cumulative foreign currency translation loss of $12.2&nbsp;million, a cumulative loss related to foreign currency impact from changes in uncertain tax positions of
$0.9&nbsp;million, and a cumulative loss from minimum pension liability adjustments of $20.5&nbsp;million, which is net of tax effect of $0.4&nbsp;million. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Recent Accounting Pronouncements</B></FONT><FONT SIZE=2>&#151;Changes to generally accepted accounting principles are established by the Financial Accounting Standards Board ("FASB") in the
form of accounting standards updates ("ASUs") to the FASB's Accounting Standards Codification. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or not expected to have minimal impact on the Company's
consolidated financial position and results of operations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
June 2011, the FASB issued an amendment to the existing guidance on the presentation of comprehensive income. Under the amended guidance, entities have the option to present the components of net
income and other comprehensive income in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Entities no longer have the option of presenting
the components of other comprehensive income within the statement of changes in stockholders' equity. This amendment is effective on a retrospective basis for interim and annual periods beginning
after December&nbsp;15, 2011, which for the Company begins with the first quarter of 2012. The adoption of this amendment will result in a change to the Company's current presentation of
comprehensive income, but will not have any impact on the Company's consolidated financial position or results of operations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Standards Issued but Not Yet Effective</B></FONT><FONT SIZE=2>&#151;Other new pronouncements issued but not effective until after July&nbsp;2, 2011 are not expected to have a material impact
on the Company's consolidated financial statements. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-67 </B></FONT></P>

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<A NAME="page_gw12701_1_68"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gw12701_2._selected_condensed___gw102322"> </A>
<A NAME="toc_gw12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  2. SELECTED CONDENSED CONSOLIDATED BALANCE SHEET DISCLOSURES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following tables provide details of selected condensed consolidated balance sheet items at July&nbsp;2, 2011 and January&nbsp;1, 2011 (in
millions): </FONT></P>
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<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="79pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Inventories:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Raw materials</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>21.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Work in process</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Finished goods</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total inventories</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>43.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>45.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Property, plant, and equipment:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Land</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>29.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>28.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Buildings and improvements</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>53.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>49.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Machinery and equipment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>153.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>143.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Construction in progress</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total property, plant, and equipment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>241.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>231.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less accumulated depreciation</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>101.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>91.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total property, plant, and equipment&#151;net</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>139.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>139.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued liabilities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Personnel related</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Management fees</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total accrued liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>52.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>39.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company capitalized interest expense incurred during the construction period for capital projects, primarily new machinery and equipment. Interest
capitalized during the six months ended July&nbsp;2, 2011
and June&nbsp;26, 2010 was $0.4&nbsp;million and $0.3&nbsp;million, respectively. Capitalized interest is included in property, plant, and equipment in the condensed consolidated balance sheets. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Depreciation
expense for the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010, was approximately $8.1&nbsp;million and $7.9&nbsp;million, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-68 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=231,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=283665,FOLIO='F-68',FILE='DISK108:[11ZAS1.11ZAS12701]GW12701A.;52',USER='LSMITH',CD='30-OCT-2011;17:29' -->
<A NAME="page_gw12701_1_69"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gw12701_3._intangible_assets"> </A>
<A NAME="toc_gw12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  3. INTANGIBLE ASSETS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Intangible
assets consist of the following (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="70pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>July&nbsp;2, 2011 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Weighted<BR>
average<BR>
estimated<BR>
useful life</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Gross amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Accumulated<BR>
amortization</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Net amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=13 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Patented Technology</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(5.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Customer Relationship</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Trade Name</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(10.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> &nbsp;<BR>  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="70pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>January&nbsp;1, 2011 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Weighted<BR>
average<BR>
estimated<BR>
useful life</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Gross amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Accumulated<BR>
amortization</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Net amount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=13 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Patented Technology</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>10&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(5.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>4.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Customer Relationship</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Trade Name</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(10.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The following is a schedule of expected amortization for the intangible assets for the remainder of fiscal year 2011 through fiscal year 2016 (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="28pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2011 (remaining six months)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2012</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2013</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2014</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2015</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2016</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Amortization expense attributed to intangible assets was $0.6&nbsp;million for the six months ended both July&nbsp;2, 2011 and June&nbsp;26, 2010.
Amortization is included in sales, general, and administrative expense on the condensed consolidated statement of operations. The Company found no indication of impairment of its intangible assets in
fiscal year 2010 through the six months ended July&nbsp;2, 2011. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-69 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=9,SEQ=232,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=854166,FOLIO='F-69',FILE='DISK108:[11ZAS1.11ZAS12701]GW12701A.;52',USER='LSMITH',CD='30-OCT-2011;17:29' -->
<A NAME="page_gw12701_1_70"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gw12701_4._debt"> </A>
<A NAME="toc_gw12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  4. DEBT    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Debt at July&nbsp;2, 2011 and January&nbsp;1, 2011, consists of the following (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="79pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1, 2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Senior notes payable&#151;secured, related party, net of unamortized discount of $25.3&nbsp;million and $27.5&nbsp;million at July&nbsp;2 and
January&nbsp;1, 2011, respectively</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>184.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>182.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Subordinated notes payable&#151;unsecured, related party, net of unamortized discount of $66.2&nbsp;million and $69.0&nbsp;million as of July&nbsp;2 and
and January&nbsp;1, 2011, respectively</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>119.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>109.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other debt&#151;unsecured</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Entrustment loan</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total debt outstanding</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>319.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>313.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current portion long-term debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(15.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(21.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total long-term debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>304.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>292.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company is required to make debt service payments under the terms of its debt arrangements. The obligated debt payments for the remaining six months of 2011
are $11.4&nbsp;million. Future obligated debt payments are $3.6&nbsp;million in 2012, $210.0&nbsp;million in 2015 and $185.7&nbsp;million in 2016. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> New Credit Arrangements</B></FONT><FONT SIZE=2>&#151;On September&nbsp;30, 2010, the Company entered into a series of financing transactions including a senior secured credit agreement and a
mezzanine credit agreement, each entered into with a syndicate of lenders, the majority of which are partial owners in an entity that is the Company's sole stockholder (collectively "the New Credit
Arrangements"), as well as the issuance of 43,500,666 Class&nbsp;C CPCs issued to the Company's sole stockholder (collectively "the Financing Transaction"). The Company received
$376.4&nbsp;million in aggregate proceeds in connection with the Financing Transaction. At the time of issuance, the total proceeds were allocated among the instruments issued based upon the
relative fair value of each instrument, as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="73pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>As of<BR>
September&nbsp;30,<BR>
2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Senior notes payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>181.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative&#151;senior notes payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Subordinated notes payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>104.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative&#151;subordinated notes payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Convertible preferred certificates&#151;Class&nbsp;C (Note&nbsp;5)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative&#151;convertible preferred certificates&#151;Class&nbsp;C (Note&nbsp;5)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>56.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total allocated value</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>376.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The borrower under the New Credit Arrangements is the Company's wholly owned subsidiary, Isola USA Corp. The principal terms of each credit arrangement are
described below. The Class&nbsp;C CPCs are discussed in Note&nbsp;5. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-70 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=10,SEQ=233,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=421655,FOLIO='F-70',FILE='DISK108:[11ZAS1.11ZAS12701]GW12701A.;52',USER='LSMITH',CD='30-OCT-2011;17:29' -->
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<P style="font-family:times;text-align:justify"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


  </B></FONT></P>

<P style="font-family:times;text-align:justify"><BR><FONT SIZE=2><B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> <BR>
As of July 2, 2011 and for the six months ended July 2, 2011  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_senior_secured_credit_agreement"> </A>
<A NAME="toc_gy12701_1"> </A></FONT> <FONT SIZE=2><B>  Senior Secured Credit Agreement  <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The senior secured credit agreement consists of $210.0&nbsp;million senior notes ("Senior Notes"), the full amount of which was drawn at closing on
September&nbsp;30, 2010. The proceeds were used to refinance part of the then-existing debt, as well as to pay other fees and expenses related to the Senior Notes. The Senior Notes are
secured by a first priority lien on substantially all of the assets of the Company, including a pledge of all of the equity interests of each domestic subsidiary and 65% of the equity interests of the
first-tier foreign subsidiaries. The Company's other secured and unsecured obligations are subordinated in priority to payment of the Senior Notes. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company makes elections as to the interest period term which can be one, two, three, or six months in length. The Company also makes elections as to the loan type on which the interest is based.
The Company can elect a Eurodollar Loan or an ABR Loan or a combination of the two. Eurodollar Loans accrue interest at a rate of LIBOR (with a minimum base rate of 2.0%) plus 8.0%. Eurodollar loan
interest is payable on the last day of the period term elected, provided, in the case of an interest period longer than 3&nbsp;months, payments shall be due no more than 3&nbsp;months after the
commencement of the interest period term. ABR Loans accrue interest at a base rate plus 7%. The base rate is defined as the greater of the Prime Rate as identified and published in the Wall Street
Journal or the Federal Funds Effective Rate as published by the Federal Reserve Bank of New York, on the date of election, plus <SUP>1</SUP>/<SMALL>2</SMALL> of 1%. The base rate is to be a minimum of 3.0%. ABR
loan interest is payable March&nbsp;31, June&nbsp;30, September&nbsp;30, and December&nbsp;31 of each year. As of July&nbsp;2, 2011, the Company had elected Eurodollar loans for all Senior
Notes, which were accruing interest at the rate of 10.0%, which is equal to the minimum LIBOR rate of 2.0% plus 8.0%. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Senior Notes are due in full on September&nbsp;30, 2015. Voluntary early payments are allowed but payments made prior to the first anniversary date are required to be made at 102% of the
principal amount and payments made subsequent to the first anniversary date but prior to the second anniversary date are required to be made at 101% of the principal amount. Payments made subsequent
to the second anniversary date shall be made at par value of the outstanding debt. The Company is obligated to make prepayments against the Senior Notes resulting from the following transactions or
events as defined in the Senior Notes agreements: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>100%
of proceeds from the sale of assets not reinvested in long-term productive assets within one year of the receipt of the sale proceeds, not to exceed
$5.5&nbsp;million in any fiscal year;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>100%
of net insurance/condemnation proceeds in excess of $0.1&nbsp;million for any casualty event and in excess of $1.0&nbsp;million for all casualty events in
any fiscal year which are not reinvested in long-term productive assets or used to repair, restore, or replace the assets subject to the applicable casualty event or events within one year
of the receipt of the net proceeds;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>net
proceeds of equity issuances by Isola Group&nbsp;S.a.r.l. in an aggregate amount of 75% of such proceeds provided that if, as of the last day of the most
recently ended fiscal quarter, the senior secured leverage ratio shall be 2.50:1.00 or less but greater than 2.00:1.00, the amount shall be reduced to an aggregate amount equal to 50% of such
proceeds, and provided that if, as of the last day of the most recently ended fiscal quarter, the senior secured leverage ratio shall be 2.00:1.00 or less, the amount shall be reduced to an aggregate
amount equal to 25% of such proceeds;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>100%
of net proceeds from the incurrence of any indebtedness by Isola Group&nbsp;S.a.r.l. and its subsidiaries not otherwise permitted by the Senior Notes
agreements; </FONT></DD></DL>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-71 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>75%
of consolidated excess cash flow, provided, that if, as of the last day of the most recently ended fiscal year, the senior secured leverage ratio shall be
2.0:1.0 or less, the amount shall be reduced to 50% of consolidated excess cash flow. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Senior Notes were issued at a discount of $28.5&nbsp;million on September&nbsp;30, 2010. As of July&nbsp;2, 2011, there was $210.0&nbsp;million outstanding principal and
$25.3&nbsp;million of unamortized discount resulting in a net balance of $184.7&nbsp;million in the condensed consolidated balance sheet. As of January&nbsp;1, 2011, there was
$210.0&nbsp;million of outstanding principal and $27.5&nbsp;million of unamortized discount resulting in a net balance of $182.5&nbsp;million in the condensed consolidated balance sheet. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_mezzanine_credit_agreement"> </A>
<A NAME="toc_gy12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  Mezzanine Credit Agreement    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The mezzanine credit agreement consists of $175.0&nbsp;million unsecured notes ("Subordinated Notes"), the full amount of which was drawn at
closing on September&nbsp;30, 2010. The proceeds were used to refinance part of the then-existing debt, as well as to pay other fees and expenses related to the Subordinated Notes. The
unsecured term loans issued pursuant to the Subordinated Notes agreements are subordinate and junior to the obligations owed under the senior secured credit agreement. Obligations under the mezzanine
credit agreement rank pari passu with the Company's other unsecured and unsubordinated obligations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
unsecured term loans under the mezzanine credit agreement bear interest at a rate of 16.0% per annum, with half (8.0% per annum) payable in cash on March&nbsp;31, June&nbsp;30,
September&nbsp;30, and December&nbsp;31 of each year until maturity and half (8.00% per annum) accreting on the outstanding principal amount of the unsecured term loans, due at maturity. The
Subordinated Notes are due in full on March&nbsp;24, 2016. Voluntary early payments are allowed subject to the prior discharge of the senior secured credit agreement obligations (except as otherwise
permitted pursuant to the applicable senior secured credit agreement). The Company is obligated to repay the Subordinated Notes in full along with any unpaid interest upon the occurrence of a "Change
in Control", as defined by the mezzanine credit agreement. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Subordinated Notes were issued at a discount of $70.4&nbsp;million on September&nbsp;30, 2010. As of July&nbsp;2, 2011, there was $185.7&nbsp;million of outstanding principal, which
consisted of $175.0&nbsp;million in term loans and $10.7&nbsp;million of accreted interest. As of January&nbsp;1, 2011, there was $178.6&nbsp;million of outstanding principal, which consisted
of $175.0&nbsp;million in term loans and $3.6&nbsp;million of accreted interest. The unamortized discount was $66.2&nbsp;million and $69.0&nbsp;million at July&nbsp;2, 2011 and
January&nbsp;1, 2011, respectively, resulting in a net balance of $119.5&nbsp;million at July&nbsp;2, 2011 and $109.6&nbsp;million at January&nbsp;1, 2011 in the condensed consolidated
balance sheet. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_embedded_derivative_liability"> </A>
<A NAME="toc_gy12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  Embedded Derivative Liability    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In accordance with ASC 815 the mandatory pre-payment features of the Senior and Subordinated Notes are considered embedded derivative
liabilities. The values related to the embedded derivative liabilities are recognized at fair value in the condensed consolidated balance sheet at each reporting period. At July&nbsp;2, 2011 and
January&nbsp;1, 2011, the determined fair value of the embedded derivative liabilities was $0.3&nbsp;million and $5.9&nbsp;million, respectively. Any change in fair value of the embedded
derivative liability is reflected in the condensed consolidated statement of operations. For the six-month period ended July&nbsp;2, 2011, the Company's embedded derivative gain related
to the Senior and Subordinated Notes was a combined $5.6&nbsp;million. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-72 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_covenants"> </A>
<A NAME="toc_gy12701_4"> </A>
<BR></FONT><FONT SIZE=2><B>  Covenants    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company's New Credit Arrangements require it to maintain certain financial and operating covenants. The financial covenants include separate
ratios measuring both interest and secured debt against EBITDA, as defined in the New Credit Arrangements, as well as a limit on capital expenditures. The operating covenants impose limitations on
business decisions, including, but not limited to, the ability to (i)&nbsp;dispose of assets or stock; (ii)&nbsp;incur additional indebtedness and guarantee obligations; (iii)&nbsp;pay certain
dividends; (iv)&nbsp;create liens on assets; (v)&nbsp;make investments, loans or advances; (vi)&nbsp;restrict distributions to the borrowers or guarantors from its subsidiaries;
(vii)&nbsp;engage in mergers or consolidations; (viii)&nbsp;engage in certain transactions with affiliates; (ix)&nbsp;incur additional negative pledges; (x)&nbsp;incur capital expenditures;
(xi)&nbsp;change its fiscal year or accounting practices or the lines of business in which it and its subsidiaries are involved; (xii)&nbsp;enter into sale-leaseback transactions;
(xiii)&nbsp;prepay principal of, premium, or interest on, or redeem, purchase, retire, defease, or create a sinking fund or make a similar payment with respect to, any subordinated indebtedness and
certain other debt; (xiv)&nbsp;change the conduct of business; (xv)&nbsp;conduct activities of any parent holding company or (xvi)&nbsp;amend its organizational documents. The Company was in
compliance with these covenants as of July&nbsp;2, 2011. The Company was required to file its annual financial statements by April&nbsp;30, 2011. The Company was not in compliance with this
requirement and obtained a waiver of this covenant through September&nbsp;30, 2011. The Company was in compliance after filing the audited financial statements on September&nbsp;29, 2011. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Other Unsecured Debt</B></FONT><FONT SIZE=2>&#151;The Company has two unsecured loan agreements from lenders in China that provide for a series of draw-downs as funds are required
at the stated rate ranging from 4.26% to 5.04% per annum. Each draw-down has a one year maturity and is renewable on an annual basis. The Company made draws and repayments on these
facilities and had combined outstanding balances of $15.0&nbsp;million and $15.1&nbsp;million at July&nbsp;2, 2011 and January&nbsp;1, 2011, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company had an entrustment loan with $5.5&nbsp;million outstanding at January&nbsp;1, 2011. An entrustment loan is a means for one subsidiary to loan cash to another subsidiary with a bank
acting as the intermediary. This is accomplished by a lending subsidiary depositing cash into a bank (which is shown as restricted cash on the consolidated balance sheets) and then requesting the bank
to on-loan the cash to another subsidiary with the terms being specified by the subsidiary depositing the cash. The bank charges a minimal processing fee of 0.15% per annum of the
outstanding balance to provide the service. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Several
of the Company's subsidiaries have open letters of credit for the benefit of third-party vendors. The total letter of credit availability is $5.5&nbsp;million and $2.1&nbsp;million at
July&nbsp;2, 2011 and January&nbsp;1, 2011, respectively, of which $3.2&nbsp;million and $1.1&nbsp;million has been committed as of July&nbsp;2, 2011 and January&nbsp;1, 2011,
respectively. The letters of credit expire at various dates. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Several
of the Company's subsidiaries have entered into various lines of credit. These lines of credit provided total availability of $10.5&nbsp;million and $5.4&nbsp;million at July&nbsp;2,
2011 and January&nbsp;1, 2011, respectively. No balances were outstanding on these lines of credit as of either July&nbsp;2, 2011 or January&nbsp;1, 2011. $0.6&nbsp;million was pledged as
guarantees in addition to the letters of credit as of July&nbsp;2, 2011 and January&nbsp;1, 2011, respectively, leaving total credit available under the lines of $6.7&nbsp;million and
$4.8&nbsp;million as of July&nbsp;2, 2011 and January&nbsp;1, 2011, respectively. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-73 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_5._convertible_preferred_certificates"> </A>
<A NAME="toc_gy12701_5"> </A>
<BR></FONT><FONT SIZE=2><B>  5. CONVERTIBLE PREFERRED CERTIFICATES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company has issued and outstanding three different classes of Convertible Preferred Certificates ("CPCs") as of July&nbsp;2, 2011. The CPCs
have characteristics of both debt and equity, but are considered to be legal form debt instruments in Luxembourg, and thus are accounted for as debt. For each of the periods ended July&nbsp;2, 2011
and January&nbsp;1, 2011, the Company had 420,455 and 95,788,400 Class&nbsp;A and B CPCs authorized, issued and outstanding. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On
September&nbsp;30, 2010, the Company entered into the Financing Transaction consisting of the issuance of 43,500,666 Class&nbsp;C CPCs and the New Credit Arrangements (see Note&nbsp;4). The
Company received gross proceeds of $376.4&nbsp;million in connection with the Financing Transaction which have been allocated among the instruments issued based upon the relative fair value of each
at the time of issuance. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
valuing the CPCs, the Company used a methodology that is consistent with the methods outlined in the </FONT><FONT SIZE=2><I>AICPA Practice Aid Valuation of
Privately-Held-Company Equity Securities Issued as Compensation</I></FONT><FONT SIZE=2>. The enterprise value inputs associated with the Company's valuations were derived using
the income and market approaches. The income approach estimates the enterprise value of the Company by discounting the expected future cash flows of the Company to present value. Under the market
approach, the total enterprise value of the Company is estimated by comparing the Company's business to similar businesses whose securities are actively traded in public markets, or businesses that
are involved in a public or private transaction. The Company has selected valuation multiples derived from trading multiples of public companies that participate in the Company's industry. These
valuation multiples were then applied to the equivalent financial metric of the Company's business, giving consideration to differences between the Company and similar companies for such factors as
company size, leverage, and growth prospects. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company prepared financial forecasts to be used in the computation of the enterprise value for the income approach. The financial forecasts took into account the Company's past experience and
future expectations. There is inherent uncertainty in these estimates. The risks associated with achieving the Company's forecasts were assessed in selecting the appropriate discount rates. If
different discount rates had been used, the valuations would have been different. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company then allocated the resulting enterprise value among the instruments that comprise the Company's capital structure based upon rights and preferences of the instruments using the
Option-Pricing Method ("OPM"). Under the OPM, the Company allocated the value of the CPCs and common stock of the Company based on a series of call options, representing the present value of the
expected future returns for each instrument. The value of these options was estimated using the Black-Scholes option pricing model. The assumptions utilized in the model, including assumptions
associated with volatility, were consistent with those selected to value the options to purchase partnership units, as discussed in Note&nbsp;9, as the Company's operations represent substantially
all of the net assets of the sole stockholder. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
OPM involves making estimates of the anticipated timing of a potential liquidity event such as a sale of the Company or an initial public offering, and estimates of the volatility of the Company's
equity securities. The anticipated timing is based on the plans of the board and management. Estimating the volatility of the share price of a privately held company is complex because there is no
readily available market for the shares. The Company estimated the volatility of the stock based on available information on volatility of stocks of publicly traded companies in the industry. Had the
Company used different estimates of volatility, the allocations between common stock and CPCs would have been different. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-74 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
43,500,666 certificates of Class&nbsp;C CPCs carry an aggregate par value of 43.5&nbsp;million Euro. There were no other CPC transactions during the periods ended July&nbsp;2, 2011 and
January&nbsp;1, 2011. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Convertible
preferred certificates liability at July&nbsp;2, 2011 and January&nbsp;1, 2011 consists of the following (in millions): </FONT></P>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Outstanding Class&nbsp;A and B CPCs</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>139.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>128.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Outstanding Class&nbsp;C CPCs<SUP>(1)</SUP>, net of unamortized discount of $36.7 and $33.8&nbsp;million as of July&nbsp;2 and and January&nbsp;1, 2011,
respectively</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>26.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>24.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued interest:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;A and B CPCs</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>55.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>45.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;C CPCs</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total convertible preferred certificate liability</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>224.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>199.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

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  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Par value 43.5&nbsp;million Euros  </I></FONT></DD></DL>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The following is a summary of the rights, preferences and terms of the Company's outstanding series of CPCs: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_redemption_and_optional_redemption"> </A>
<A NAME="toc_gy12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  Redemption and optional redemption    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Class&nbsp;A and Class&nbsp;B CPCs mature on June&nbsp;2, 2044 and Class&nbsp;C CPCs mature on September&nbsp;30, 2050. The CPCs are
mandatorily redeemable at these maturity dates at a price equivalent to par plus accrued and unpaid interest (the "Redemption Price"). The Company, within 15&nbsp;days of a conversion event, as
further discussed below, may elect an earlier redemption of any or all of the CPCs at the greater of the Redemption Price or a formula indexed to the adjusted net asset value of the Company, as
further defined in the CPC agreements (the "Optional Redemption Price"). The Redemption Price of the Class&nbsp;A, B and C CPCs totaled $261.4&nbsp;million and $232.9&nbsp;million as of
July&nbsp;2, 2011 and January&nbsp;1, 2011, respectively. The Company may only elect optional redemption to the extent sufficient funds are available subsequent to redemption to satisfy all of the
Company's other obligations, whether senior or pari passu to the CPCs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_preferred_interest"> </A>
<A NAME="toc_gy12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  Preferred interest    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Class&nbsp;A and Class&nbsp;B CPCs carry a par value of one Euro and earn preferred interest based on the six-month EURIBOR plus
4.875% (6.6% and 6.1% as of July&nbsp;2, 2011 and January&nbsp;1, 2011, respectively). Class&nbsp;C CPCs carry a par value of one Euro and earn preferred interest based on the
six-month EURIBOR plus 5.0% (6.7% and 6.3% as of July&nbsp;2, 2011 and January&nbsp;1, 2011, respectively). The preferred interest is payable upon declaration by the Board of Directors
and to the extent the Company possesses sufficient funds. Cumulative preferred interest of $58.7&nbsp;million and $46.6&nbsp;million has been recorded within convertible preferred certificates on
the condensed consolidated balance sheet as of July&nbsp;2, 2011 and January&nbsp;1, 2011, respectively. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-75 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=238,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=534076,FOLIO='F-75',FILE='DISK108:[11ZAS1.11ZAS12701]GY12701A.;64',USER='KSEAMON',CD='29-OCT-2011;20:45' -->
<A NAME="page_gy12701_1_76"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_liquidation"> </A>
<A NAME="toc_gy12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  Liquidation    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In the event of liquidation, Class&nbsp;A, B and C CPCs are redeemable at par value plus any accrued but unpaid interest. In liquidation, the CPCs
rank pari passu among each class, rank senior in priority of payment to the Company's common stock and rank subordinate to all other obligations. After the payment of the applicable liquidation
preference to the holders of the CPCs, the residual, if any, will be distributed pro rata among the common stockholders. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_voting_and_dividend_rights"> </A>
<A NAME="toc_gy12701_9"> </A>
<BR></FONT><FONT SIZE=2><B>  Voting and dividend rights    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The CPCs do not include voting or dividend rights unless converted into common shares. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_contingent_conversion_feature"> </A>
<A NAME="toc_gy12701_10"> </A>
<BR></FONT><FONT SIZE=2><B>  Contingent conversion feature    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The CPC agreements provide both the Company and the holders certain rights to convert some or all of the CPCs into the Company's common shares upon
the occurrence of certain events. A conversion event is defined as "after payment of or provision for other obligations, the Issuer has funds resulting, among others, from (i)&nbsp;dividend payments
made by the subsidiaries or (ii)&nbsp;a sale of one of the subsidiaries by the Issuer to an affiliated or non-affiliated party or (iii)&nbsp;any recapitalization or refinancing of any
TPG Isola group of companies." During a 15-day period subsequent to the occurrence of a conversion event, the Company shall have the right but not the obligation to convert any or all CPCs
into common shares of the Company by requiring the holder to exchange CPCs for shares. Upon expiration of the Company's conversion rights, and for the following 15-day period each holder
shall have the right (subject to certain limitations) but not the obligation to have any or all of its CPCs converted into common shares of the Company. Any conversions will take place at a price
equal to the conversion price defined in the CPC agreements. The number of common shares into which each CPC is convertible will be determined at the time of conversion and is indexed to the greater
of par value plus accrued and unpaid interest or the adjusted net asset value of the Company, as further defined in the CPC agreements. As of July&nbsp;2, 2011, the class&nbsp;A, B and C CPCs were
convertible into 587,016; 133,734,451 and 45,601,553 shares, respectively of the Company's common stock based solely upon the par plus accrued and unpaid interest feature of the conversion price. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_embedded_derivative_feature"> </A>
<A NAME="toc_gy12701_11"> </A>
<BR></FONT><FONT SIZE=2><B>  Embedded derivative feature    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In accordance with ASC 815, </FONT><FONT SIZE=2><I>Accounting for Derivative Instruments and Hedging Activities</I></FONT><FONT SIZE=2>, the
conversion features that are included in the CPC agreements and are discussed above are considered an embedded derivative liability. At July&nbsp;2, 2011 and January&nbsp;1, 2011, the fair value
of the embedded derivative liability was determined to be $53.8&nbsp;million and $60.5&nbsp;million, respectively, which was bifurcated from the CPCs and is stated separately on the condensed
consolidated balance sheets. The value related to the embedded derivative liability is recognized at fair value at each reporting period and any change in fair value is reflected in the condensed
consolidated statement of operations. For the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010, the change in fair value of the embedded derivative liability related to the CPCs resulted
in income of $11.9&nbsp;million and a loss of $58.2&nbsp;million, respectively. Management determined the fair value of the embedded derivative with the assistance of a third-party consultant as
described above. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_6._interest_rate_swaps"> </A>
<A NAME="toc_gy12701_12"> </A>
<BR></FONT><FONT SIZE=2><B>  6. INTEREST RATE SWAPS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In December 2010, a subsidiary of the Company entered into an interest rate swap with a notional amount of $25.0&nbsp;million which expires on
December&nbsp;31, 2013. The Company did not designate this swap agreement </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-76 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=239,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=654239,FOLIO='F-76',FILE='DISK108:[11ZAS1.11ZAS12701]GY12701A.;64',USER='KSEAMON',CD='29-OCT-2011;20:45' -->
<A NAME="page_gy12701_1_77"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>as
a hedge and therefore, any change in fair value is recorded in the condensed consolidated statement of operations as interest expense. The change in the combined fair value of the change in
interest rate swaps was immaterial for the six-month periods ended July&nbsp;2, 2011. The Company pays a fixed rate amount of 2.8% per annum and receives a variable rate based on the
greater of 2.0% or the three-month LIBOR. Interest incurred or earned from this agreement is settled quarterly on the last day of March, June, September, and December and commenced on March&nbsp;31,
2011. The swap agreement is required under the terms of the Company's Senior Notes agreements, which require that a minimum of 50.0% of the principal of the Company's aggregate indebtedness bears
interest at a fixed rate or is protected by an agreement to provide the same effect. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
May 2007, a subsidiary entered into two interest rate swaps with a combined notional amount of $15.8&nbsp;million in order to mitigate the risks associated with fluctuations of the interest rate
on a capital lease contract. One of the swaps expires in June 2012 and bears an interest rate of the three-month EURIBOR plus 0.52%, the Company pays a variable rate amount based on the three month
EURIBOR plus 0.52% and receives a variable rate based on the three-month EURIBOR. The second
swap expires in June 2014 and bears a fixed interest rate of 4.65%; the Company pays a fixed rate of 4.65% and receives a variable rate based on the three-month EURIBOR. Settlement dates occur
quarterly on both swaps. The Company did not designate these swap agreements as hedges and therefore, any change in fair value is recorded in the condensed consolidated statement of operations as
interest expense. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
combined fair value of these interest rate swaps was a liability of $0.6&nbsp;million at each of July&nbsp;2, 2011 and January&nbsp;1, 2011. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_7._pension_and_other_retirement_benefits"> </A>
<A NAME="toc_gy12701_13"> </A>
<BR></FONT><FONT SIZE=2><B>  7. PENSION AND OTHER RETIREMENT BENEFITS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company sponsors a number of defined benefit pension plans covering certain U.S. employees as well as certain non-U.S. employees of
certain subsidiaries. A defined benefit plan specifies the amount of benefits a plan participant is to receive. Plans covering U.S. employees provide benefits of stated amounts generally based on
years of service and compensation history. The qualified U.S. plans had been previously frozen and curtailed prior to the original Isola acquisition in 2004, such that no new participants were
admitted into the plans and no additional benefits were accrued for participants already in the plans. Employees do not contribute to the plans. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
addition, the Company sponsors a Supplemental Employee Retirement Plan ("SERP"), which covers certain officers and highly compensated employees of the Company designated for participation by the
plan document. In order to comply with changes required by Section&nbsp;409A of the Internal Revenue Code of 1986, effective January&nbsp;1, 2008, the Company amended the SERP to require that
retirement benefits be paid in a single lump sum within 30&nbsp;days following the participant's separation from service. Benefits for previously terminated employees were paid in January 2009.
Also, effective February&nbsp;1, 2009, participants of the SERP no longer accrue additional benefits. Benefits accrued through February&nbsp;1, 2009 were not impacted. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company also provides postretirement benefits for certain employees of the Company and its subsidiaries, which include medical and life insurance. For the medical insurance plans, retirees pay
100% of plan premiums. The plan is not eligible for the government subsidy under the </FONT><FONT SIZE=2><I>Medicare Prescription Drug, Improvement and Modernization Act of
2003</I></FONT><FONT SIZE=2> (the "Act") and the Company does not recognize any reduction in the benefit obligation. The medical insurance benefits are paid as incurred. For the life </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-77 </B></FONT></P>

<HR NOSHADE>
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<A NAME="page_gy12701_1_78"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>insurance
plan, retirees do not make contributions. The Company retains the right to change or eliminate these benefits. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
components of net periodic benefit cost for the six-month periods ended July&nbsp;2, 2011 and June&nbsp;26, 2010 are shown in the table below (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="74pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Pension benefits </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Other<BR>
benefits</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>U.S. plans</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Non-U.S. plans</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>For six months ended July&nbsp;2, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Service cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amortization of net (gain) / loss</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected return on plan assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(2.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net periodic (benefit) / cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>For six months ended June&nbsp;26, 2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Service cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amortization of net (gain) / loss</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected return on plan assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(2.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net periodic (benefit) / cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="gy12701_8._commitments_and_contingencies"> </A>
<A NAME="toc_gy12701_14"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  8. COMMITMENTS AND CONTINGENCIES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Leases</B></FONT><FONT SIZE=2>&#151;The Company's principal non-cancelable, long-term, operating lease obligations are for land, manufacturing equipment, and office and
warehouse space. Rental expense for these operating leases for the six-month periods ended July&nbsp;2, 2011 and June&nbsp;26, 2010 was $1.5&nbsp;million and $1.8&nbsp;million,
respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Property,
plant, and equipment recorded under capital leases and related accumulated depreciation were $21.4&nbsp;million and $3.2&nbsp;million as of July&nbsp;2, 2011, respectively, and
$19.6&nbsp;million and $2.6&nbsp;million as of January&nbsp;1, 2011, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-78 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=241,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=33562,FOLIO='F-78',FILE='DISK108:[11ZAS1.11ZAS12701]GY12701A.;64',USER='KSEAMON',CD='29-OCT-2011;20:45' -->
<A NAME="page_gy12701_1_79"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Future
minimum lease payments under noncancelable operating and capital leases at July&nbsp;2, 2011, are as follows (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="37pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Fiscal years ending</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Operating<BR>
leases</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Capital<BR>
leases</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2011 (remaining 6&nbsp;months)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2016</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Thereafter</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total minimum lease payments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less imputed interest</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(4.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Present value of minimum lease payments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>16.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current portion of capital lease obligations (included in other current liabilities)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Long-term portion of capital lease obligations</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>15.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company received approximately $1.1&nbsp;million and $0.9&nbsp;million of rental income from the sublease of certain office and warehouse space during
the six-month periods ended July&nbsp;2, 2011 and June&nbsp;26, 2010, respectively. Rental income was recorded as a reduction of cost of goods sold in the condensed consolidated
statement of operations. The sublease is expected to provide approximately $1.1&nbsp;million in rental income during the remainder of the fiscal year ending December&nbsp;31, 2011. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Legal Proceedings</B></FONT><FONT SIZE=2>&#151;From time to time, the Company is involved in legal proceedings and claims that occur in the normal course of business. Although there can be no
assurance, the Company does not believe the results of these proceedings will have a material adverse effect on its business, results of operations, financial position, or cash flows. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_9._fair_value_measurements"> </A>
<A NAME="toc_gy12701_15"> </A>
<BR></FONT><FONT SIZE=2><B>  9. FAIR VALUE MEASUREMENTS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Fair Value Measurements on Recurring Basis.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company measures the fair value of certain assets and liabilities on a recurring basis based upon a fair value
hierarchy in accordance with ASC&nbsp;820, </FONT><FONT SIZE=2><I>Fair Value Measurements and Disclosures</I></FONT><FONT SIZE=2>, as follows: </FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Level&nbsp;1&#151;Observable
inputs such as quoted prices in active markets; </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Level&nbsp;2&#151;Inputs,
other than the quoted prices in active markets, that are observable either directly or indirectly; and </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Level&nbsp;3&#151;Unobservable
inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. </FONT></P>

</UL>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Liabilities
measured at fair value on a recurring basis include interest rate swaps and embedded derivatives. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-79 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=9,SEQ=242,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=264546,FOLIO='F-79',FILE='DISK108:[11ZAS1.11ZAS12701]GY12701A.;64',USER='KSEAMON',CD='29-OCT-2011;20:45' -->
<A NAME="page_gy12701_1_80"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>


<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table presents information about the Company's liabilities measured at fair value on a recurring basis as of July&nbsp;2, 2011 and January&nbsp;1, 2011 (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


</FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="58pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="70pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Fair value measurements<BR>
at reporting date using </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
carrying<BR>
value</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Quoted<BR>
prices in<BR>
active<BR>
markets<BR>
for<BR>
identical<BR>
assets<BR>
(Level&nbsp;1)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Significant<BR>
other<BR>
observable<BR>
inputs<BR>
(Level&nbsp;2)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Significant<BR>
unobservable<BR>
inputs<BR>
(Level&nbsp;3)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>July&nbsp;2, 2011:</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Liabilities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest rate swaps<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative liability</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>54.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>54.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>January&nbsp;1, 2011:</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Liabilities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest rate swaps<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative liability</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>66.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>66.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I>

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  </I></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><I>(1)</I></FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=1><I> Included in other liabilities in the consolidated balance sheet.  </I></FONT></DD></DL>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company's interest rate swaps are determined based on market prices for similar instruments in active markets and are classified as Level&nbsp;2.
Valuations using discounted cash flows are classified within Level&nbsp;3 as these valuations were determined by valuation techniques based upon assumed conversion feature activity and discounting
those cash flows at a rate reflective of current market conditions and factors specific to the Company. The Company's embedded derivative liabilities are measured using Level&nbsp;3 inputs. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table presents the changes in Level&nbsp;3 liabilities measured on a recurring basis for the six months ended July&nbsp;2, 2011 (in millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Embedded<BR>
derivative liability </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>CPCs</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Debt</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=10 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance&#151;January&nbsp;1, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>60.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>66.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net change in fair value included in earnings</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(11.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(5.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(17.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Translation adjustment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>5.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance&#151;July&nbsp;2, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>53.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>54.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="gy12701_10._income_taxes"> </A>
<A NAME="toc_gy12701_16"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  10. INCOME TAXES    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Income tax expense for the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010 is $10.7&nbsp;million and $11.8&nbsp;million,
respectively. The Company's forecasted annualized effective rate for the six months ended July&nbsp;2, 2011 and June&nbsp;26, 2010 is (146.3)% and (60.3)%, respectively. The Company's interim
income tax </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-80 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=10,SEQ=243,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=324974,FOLIO='F-80',FILE='DISK108:[11ZAS1.11ZAS12701]GY12701A.;64',USER='KSEAMON',CD='29-OCT-2011;20:45' -->
<A NAME="page_gy12701_1_81"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>provision
is calculated based on an estimated annual effective tax rate applied to pre-tax net income, adjusted for discrete items that occurred within the period. The expense is primarily
a result of tax in the Company's profitable jurisdictions, establishment of valuation allowances in loss jurisdictions and uncertain tax positions. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
total unrecognized tax benefits for the six months ended July&nbsp;2, 2011 and the fiscal year ended January&nbsp;1, 2011 was $54.0&nbsp;million and $51.3&nbsp;million, respectively, of
which $53.2&nbsp;million and $50.5&nbsp;million, respectively, represent the amount that, if recognized, and prior to a consideration of the need for a valuation allowance, would have a favorable
effect on the Company's effective tax rate in any future periods. The Company's unrecognized tax benefits increased by $2.7&nbsp;million for the six months ended July&nbsp;2, 2011. As a result of
settlements with taxing authorities, it is reasonably possible that the total amounts of unrecognized tax benefits as of July&nbsp;2, 2011 will decrease by up to $11.7&nbsp;million during the next
12&nbsp;months. The amount of the reduction that would have a favorable impact on the Company's provision for income taxes is $10.9&nbsp;million. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company has recorded
tax-related accrued interest at July&nbsp;2, 2011 and January&nbsp;1, 2011 of $2.2&nbsp;million and $2.0&nbsp;million, respectively. The Company has also recorded a gross amount of
accrued penalties at each of July&nbsp;2, 2011 and January&nbsp;1, 2011 of $0.2&nbsp;million. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Company files income tax returns with federal, state, local, and foreign jurisdictions and is subject to reviews and U.S. audits of those returns. Currently, the Internal Revenue Service ("IRS")
is examining the 2008 and 2009 federal income tax returns. The Company is no longer subject to IRS examination for periods prior to 2007, although carryforward attributes that were generated prior to
2007 may still be adjusted upon examination by the IRS if they either have been or will be used in a future period. The Company's German income tax returns are also under examination by taxing
authorities for the years 2004 to 2007. With a few exceptions, the Company is no longer subject to examination for years prior to 2004. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_11._related-party_transactions"> </A>
<A NAME="toc_gy12701_17"> </A>
<BR></FONT><FONT SIZE=2><B>  11. RELATED-PARTY TRANSACTIONS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On September&nbsp;30, 2010, a subsidiary of the Company entered into the Financing Transaction (see Notes&nbsp;4 and 5). The Company received
$376.4&nbsp;million in aggregate proceeds in connection with the Financing Transaction. A syndicate of lenders who obtained an ownership interest in the sole shareholder of the Company as part of
the Financing Transaction provided $369.4&nbsp;million of the aggregate proceeds. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Certain
subsidiaries of the Company are party to a management services agreement with a related party to provide continuing business strategy, management consulting, and financial advisory services.
The Company recorded $1.0&nbsp;million in fees related to this agreement during each of the six-month periods ended July&nbsp;2, 2011 and June&nbsp;26, 2010, which is included in
selling, general, and administrative expense in the condensed consolidated statement of operations. Amounts payable to the related party totaled $1.1&nbsp;million and $1.0&nbsp;million at
July&nbsp;2, 2011 and January&nbsp;1, 2011, respectively. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
conjunction with the purchase of the Company in 2004, an exclusive distributorship right for the United States was granted to a noncontrolling owner of the sole stockholder. Sales to the related
party totaled $15.1&nbsp;million and $16.8&nbsp;million for the six-month periods ended July&nbsp;2, 2011 and June&nbsp;26, 2010, respectively. Receivables from the related party
totaled $4.3&nbsp;million and $4.4&nbsp;million at July&nbsp;2, 2011 and January&nbsp;1, 2011, respectively. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-81 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=11,SEQ=244,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=846058,FOLIO='F-81',FILE='DISK108:[11ZAS1.11ZAS12701]GY12701A.;64',USER='KSEAMON',CD='29-OCT-2011;20:45' -->
<A NAME="page_gy12701_1_82"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_12._business_segments_and_geographic_information"> </A>
<A NAME="toc_gy12701_18"> </A>
<BR></FONT><FONT SIZE=2><B>  12. BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company manages the business through three reportable operating segments, which are defined by the geographic regions in which the Company
operates (U.S., Europe and Asia). Each region has separate management teams and reporting structures and provides similar products to a similar set of customers. Segment information is consistent with
how the chief operating decision maker reviews the business, makes investing and resource allocation decisions and assesses overall operating performance. The Company evaluates performance based upon
several factors, of
which the primary financial measure is segment operating income (loss). Segment operating income (loss) does not include certain corporate operating costs such as administrative, legal, sales and
marketing, and research and development costs. The Company believes that information about segment operating income (loss) assists all users of the Company's condensed consolidated financial
statements by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from non-operational factors that affect net income, thus
providing insight into both operations and the other factors that affect reported results. The accounting policies of the segments are the same as those described in Note&nbsp;1. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table presents certain results of operations and balance sheet information by identified segments (in thousands): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
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<DIV ALIGN="CENTER"><TABLE width="110%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Asia</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Europe</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>U.S.</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Corporate</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Six months ended July&nbsp;2, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>External revenues</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>185,165</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>74,562</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>56,856</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>316,583</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating income / (loss)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>32,569</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6,299</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7,957</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(14,416</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>32,409</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Segment assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>218,177</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>92,005</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>68,775</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>23,409</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>402,366</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Six months ended June&nbsp;26, 2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>External revenues</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>176,480</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>66,730</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>63,747</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>306,957</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating income / (loss)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>33,997</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,775</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>9,696</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(10,043</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>35,425</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Segment assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>242,591</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>80,977</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>88,496</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1,007</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>413,071</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Corporate expenses reflected in operating income (loss) consist primarily of administrative, legal, sales and marketing and research and development costs. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="gy12701_13._earnings_per_share"> </A>
<A NAME="toc_gy12701_19"> </A>
<BR></FONT><FONT SIZE=2><B>  13. EARNINGS PER SHARE    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Basic earnings per share ("EPS") is computed by dividing net loss by the weighted average number of common shares outstanding during the period.
Diluted EPS is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. The shares underlying
the CPCs were not included in the computation of diluted EPS for any periods presented as the shares were considered contingently issuable (see Note&nbsp;5). The Company has no potentially dilutive
common shares. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-82 </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=12,SEQ=245,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=490887,FOLIO='F-82',FILE='DISK108:[11ZAS1.11ZAS12701]GY12701A.;64',USER='KSEAMON',CD='29-OCT-2011;20:45' -->
<A NAME="page_gy12701_1_83"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="100%" ALIGN="LEFT" >


 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table summarizes the computation of basic and diluted EPS for the six-month periods ended July&nbsp;2, 2011 and June&nbsp;26, 2010: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="73pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="73pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>June&nbsp;26,<BR>
2010</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands, except for share and per share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(19,107</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(30,525</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted average common shares outstanding&#151;basic</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted average number of common and potential common shares outstanding&#151;diluted</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic and diluted net loss per common share</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(38.21</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(61.05</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
</TABLE></DIV>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=1><I> <A NAME="gy12701_unaudited_pro_forma_net_loss_per_share"> </A>
<A NAME="toc_gy12701_20"> </A>
<BR>    </I></FONT><FONT SIZE=2><B>  Unaudited Pro Forma Net Loss Per Share    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>In connection with the Reorganization, all of the outstanding securities of Isola Group S.a.r.l, including the common shares and convertible
preferred certificates, will be contributed by TPG to Isola Group&nbsp;Ltd., which will result in Isola Group&nbsp;Ltd. becoming our new holding company and Isola Group S.a.r.l. becoming a
subsidiary of Isola Group&nbsp;Ltd. The unaudited pro forma basic and diluted net income (loss) per share for the year ended July&nbsp;2, 2011 reflects the conversion of all outstanding common
stock and convertible preferred certificates into ordinary shares of Isola Group&nbsp;Ltd. as though the conversion had occurred as of the beginning of the period or the
original date of issuance, if later. In addition, the pro forma amounts give effect to the termination of all outstanding stock-based awards associated with TPG and the replacement of such awards with
awards of Isola Group&nbsp;Ltd., with substantially the same terms, as of the beginning of the period. The unaudited pro forma basic and diluted net income (loss) per share has been presented in
accordance with SEC Staff Accounting Bulletin Topic I.B.3. The numerator in the pro forma basic and diluted net income (loss) per share calculation has been adjusted (i)&nbsp;to remove gains and
losses resulting from the change in fair value of the embedded derivative related to the CPCs, (ii)&nbsp;to remove accreted interest expense related to the CPCs, and (iii)&nbsp;to remove foreign
exchange gains and losses related to the CPCs and the embedded derivative liability. </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-83 </B></FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;text-align:justify"><FONT SIZE=1><B> <A HREF="#bg12701a_main_toc">Table of Contents</A> </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
ISOLA GROUP&nbsp;S.A.R.L. AND SUBSIDIARIES,<BR>
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P. </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>

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 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><BR>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)<BR>
As of July 2, 2011 and for the six months ended July 2, 2011 </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
following table summarizes the computation of pro forma basic and diluted EPS for the six months ended July&nbsp;2, 2011: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="107pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six months<BR>
ended </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>July&nbsp;2,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands, except for share and per share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income / (loss)&#151;basic</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma adjustments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accreted interest on CPCs and amortization of discount</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Embedded derivative (gain) / loss&#151;CPCs</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign exchange (gain) loss</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income / (loss) used to compute pro forma net income / (loss) per share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted average ordinary shares outstanding&#151;basic</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma adjustments&#151;basic</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assumed weighted-average effect of conversion of CPCs</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma weighted average ordinary shares outstanding&#151;basic</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma net income / (loss) per ordinary share&#151;basic</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma weighted average ordinary shares outstanding&#151;basic</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma adjustments&#151;diluted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assumed issuance of stock options and restricted units in Isola Group Ltd.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma weighted average ordinary shares outstanding&#151;diluted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma net income / (loss) per ordinary share&#151;diluted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Pro forma net loss per share excludes stock-based awards underlying&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares of Isola Group Ltd. expected to be
outstanding
subsequent to the Reorganization because their effect would have been anti-dilutive. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>******** </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-84 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="ha12701_isola_group_ltd._a_wholly_owne__iso05074"> </A>
<A NAME="toc_ha12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP LTD.<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.    <BR>

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    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    <BR>        <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>To the Board of Directors of<BR>
Isola Group&nbsp;Ltd.<BR>
Chandler, Arizona </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
have audited the accompanying balance sheet of Isola Group&nbsp;Ltd. (the "Company") as of September&nbsp;20, 2011 (date of incorporation). This financial statement is the responsibility of the
Company's management. Our responsibility is to express an opinion on this financial statement based on our audit. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the balance sheet, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
balance sheet presentation. We believe that our audit provides a reasonable basis for our opinion. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>In
our opinion, such balance sheet presents fairly, in all material respects, the financial position of the Company as of September&nbsp;20, 2011, in conformity with accounting principles generally
accepted in the United States of America. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>/s/
DELOITTE&nbsp;&amp; TOUCHE&nbsp;LLP<BR>
Phoenix, Arizona<BR>
September&nbsp;23, 2011 </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-85 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="Balance_Sheet92"></A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="hc12701_isola_group_ltd._a_wholly_owne__iso03903"> </A>
<A NAME="toc_hc12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP&nbsp;LTD.<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.    <BR>


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    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>BALANCE SHEET    <BR>    <BR>  As of September 20, 2011    <BR>        <BR>    </B></FONT></P>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>September&nbsp;20,<BR>
2011</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=6 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL ASSETS</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL LIABILITIES</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>COMMITMENTS AND CONTINGENCIES</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD COLSPAN=3 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>STOCKHOLDER'S EQUITY:</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Common stock, $.0001 par value&#151;100,000,000 shares authorized, one share issued and outstanding</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Preferred stock, $.0001 par value&#151;25,000,000 shares authorized, zero shares issued and outstanding</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Retained Earnings</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total stockholder's equity</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><BR>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
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<TD style="font-family:times;">&nbsp;</TD>
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 <P style="font-family:times;text-align:justify"><FONT SIZE=2>See notes to consolidated financial statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=1><B>F-86 </B></FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMENTS"></A> </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="he12701_isola_group_ltd.,_a_wholly_own__iso04267"> </A>
<A NAME="toc_he12701_1"> </A></FONT> <FONT SIZE=2><B><BR>  ISOLA GROUP&nbsp;LTD.,<BR>  A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS,&nbsp;L.P.    <BR>


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    <BR>    <BR>  <BR>  </B></FONT><FONT SIZE=2><B>NOTES TO BALANCE SHEET    <BR>    <BR>  As of September 20, 2011    <BR>        <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="he12701_1._organization"> </A>
<A NAME="toc_he12701_2"> </A></FONT> <FONT SIZE=2><B>  1. ORGANIZATION    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Isola Group&nbsp;Ltd. (the "Company") was incorporated in the Cayman Islands on September&nbsp;20, 2011. The Company is a wholly-owned subsidiary
of TPG Hattrick Partners,&nbsp;L.P. ("TPG"). The Company had no operations and has been created for the purpose of effecting a reorganization merger with Isola Group&nbsp;S.a.r.l., a wholly-owned
subsidiary of TPG, further described below. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>There
has been no activity and, therefore, the statement of operations, the statement of stockholder's equity and the statement of cash flow are not presented. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><A
NAME="he12701_2._reorganization_merger"> </A>
<A NAME="toc_he12701_3"> </A>
<BR></FONT><FONT SIZE=2><B>  2. REORGANIZATION MERGER    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On September&nbsp;20, 2011, TPG formed a new company, Isola Group&nbsp;Ltd., in the Cayman Islands. Isola Group Ltd. has been authorized by its
board of directors to file a registration statement with the Securities and Exchange Commission ("SEC") permitting it to sell its ordinary shares in an initial public offering ("IPO"). Prior to the
IPO the Company will undergo a corporate reorganization that will include the following steps: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>all
of the outstanding securities of the Company, including common shares and convertible preferred certificates, will be contributed by TPG to Isola
Group&nbsp;Ltd., which will result in Isola Group&nbsp;Ltd. becoming our new holding company and the Company becoming a subsidiary of Isola Group&nbsp;Ltd.;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>TPG
, and TPG's general partner, TPG Hattrick Holdco,&nbsp;LLC, will be liquidated and the ordinary shares of Isola Group&nbsp;Ltd. will be distributed to their
investors; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#150;&gt;</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>all
outstanding stock-based awards associated with TPG will be terminated and replaced with new awards for ordinary shares of Isola Group&nbsp;Ltd. that have the
same value and substantially the same terms. </FONT></DD></DL>
<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B>F-87 </B></FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ja12701_part_ii_information_not_required_in_prospectus"> </A>
<A NAME="toc_ja12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  PART II<BR>  <BR>    INFORMATION NOT REQUIRED IN PROSPECTUS    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><A
NAME="ja12701_item_13._other_expense__ja101984"> </A>
<A NAME="toc_ja12701_2"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;Other Expenses of Issuance and Distribution.    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows the costs and expenses, other than underwriting discounts and commissions, payable in connection with the
sale and distribution of the securities being registered. Except as otherwise noted, we will pay all of these amounts. All amounts except the SEC registration fee and the FINRA fee are estimated. The
missing amounts will be filed by amendment. </FONT></P>
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<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>SEC Registration Fee</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Nasdaq Listing Fee</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>FINRA Fee</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accounting Fees and Expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Legal Fees and Expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Printing Fees and Expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Blue Sky Fees and Expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Miscellaneous</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;"><FONT SIZE=2><A
NAME="ja12701_item_14._indemnification_of_directors_and_officers."> </A>
<A NAME="toc_ja12701_3"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;Indemnification of Directors and Officers.    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Cayman Islands exempted company is a company incorporated under the laws of the Cayman Islands whose business is conducted mainly
outside the Cayman Islands. As a
Cayman Islands exempted company, the laws of the Cayman Islands will be relevant to the provisions relating to indemnification of our directors and officers. Cayman Islands law does not limit the
extent to which a company's articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be
contrary to public policy, such as to the provision of indemnification against the consequences of committing a crime or against the indemnified person's own fraud or dishonesty. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
articles of association provide that each of our directors and officers shall be indemnified out of our assets against any liability, action, proceeding, claim, demand, costs,
damages or expenses incurred by him as a result of any act or failure to act in carrying out his functions other than such liability, if any, that he may incur by his own fraud or knowing or reckless
breach of duty. No such director or officer shall be liable to us for any loss or damage in carrying out his functions unless that liability arises through the fraud or knowing or reckless breach of
duty of such director or officer. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have also entered into indemnification agreements with our directors and executive officers under which we have agreed to indemnify each such person and hold him harmless against
expenses, judgments, fines and amounts payable under settlement agreements in connection with any threatened, pending or completed action, suit or proceeding to which he has been made a party or in
which he became involved by reason of the fact that he is or was our director or officer. Except with respect to expenses to be reimbursed by us in the event that the indemnified person has been
successful on the merits or otherwise in defense of the action, suit or proceeding, our obligations under the indemnification agreements are subject to certain customary restrictions and exceptions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
underwriting agreement (to be filed as Exhibit&nbsp;1.1 hereto) will provide for indemnification by the underwriters of us and our executive officers and directors, and
indemnification of the underwriters by us, for certain liabilities, including liabilities arising under the Securities Act of 1933, as amended, in connection with matters specifically provided in
writing by the underwriters for inclusion in the registration statement. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-1</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, we maintain standard policies of insurance under which coverage is provided to our directors and officers against loss rising from claims made by reason of breach of duty or
other wrongful act, and to us with respect to payments which may be made by us to such directors and officers pursuant to the above indemnification provision or otherwise as a matter of law. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><A
NAME="ja12701_item_15._recent_sales_of_unregistered_securities."> </A>
<A NAME="toc_ja12701_4"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;Recent Sales of Unregistered Securities.    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Isola Group&nbsp;Ltd.  </I></B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the three years preceding the filing of this registration statement, Isola Group&nbsp;Ltd., the registrant, has not sold any
of its securities without registration under the Securities Act of 1933, as amended, except as described below: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>On September&nbsp;20, 2011, Isola Group&nbsp;Ltd. issued one ordinary share to Reid Services Limited at par value in
connection with its incorporation under the laws of the Cayman Islands. The offer, sale and issuance of this security was deemed to be exempt from registration under the Securities Act under
Section&nbsp;4(2) of the Securities Act as transactions by an issuer not involving any public offering. No underwriters were involved in the foregoing sale of the security. Reid Services Limited
subsequently transferred the one ordinary share held by it to the Sponsor Limited Partnership.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>On&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011, Isola Group&nbsp;Ltd. issued 9,999 ordinary shares to the
Sponsor Limited Partnership at par
value. The offer, sale and issuance of these securities was deemed to be exempt from registration under the Securities Act under Section&nbsp;4(2) of the Securities Act as transactions by an issuer
not involving any public offering. No underwriters were involved in the foregoing sale of securities.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Immediately prior to the completion of this offering and in connection with the corporate reorganization described in
"Summary&#151;Concurrent Transactions&#151;Corporate Reorganization," all of the ordinary shares of Isola Group&nbsp;Ltd. will be contributed (i)&nbsp;first, to the Sponsor Holding
Company in connection with the liquidation of the Sponsor Limited Partnership, and (ii)&nbsp;second, to the Sponsors in connection with the liquidation of the Sponsor Holding Company. The offer,
sale and issuance of these securities will be deemed to be exempt from registration under the Securities Act under Section&nbsp;4(2) of the Securities Act as transactions by an issuer not involving
any public offering or Section&nbsp;3(a)(9) of the Securities Act as securities exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is
paid or given directly or indirectly for soliciting such exchange. No underwriters will be involved in the foregoing sales of securities. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Immediately prior to the completion of this offering and in connection with the corporate reorganization described in
"Summary&#151;Concurrent Transactions&#151;Corporate Reorganization," Isola Group&nbsp;Ltd. will grant options to
purchase&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares to certain shareholders,
directors, employees and former service providers of Isola in exchange for the termination of all outstanding options held by such persons to purchase equity interests in the Sponsor Limited
Partnership and Sponsor Holding Company. The offer, sale and issuance of these securities will be deemed to be exempt from registration under the Securities Act under Section&nbsp;4(2) of the
Securities Act as transactions by an issuer not involving any public offering, Section&nbsp;3(a)(9) of the Securities Act as securities exchanged by the issuer with its existing security holders
exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange or Rule&nbsp;701 promulgated under the Securities Act as offers and sale of
securities pursuant to certain compensatory benefit plans and contracts relating to compensation in compliance with Rule&nbsp;701. No underwriters will be involved in the foregoing sales of
securities. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-2</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_ja12701_1_3"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I> Luxembourg Holding Company  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the three years preceding the filing of this registration statement, the Luxembourg Holding Company, the predecessor of Isola
Group&nbsp;Ltd. and the holding company of Isola immediately prior to the completion of this offering (See "Summary&#151;Concurrent Transactions&#151;Corporate Reorganization") has not
sold its securities without registration under the Securities Act of 1933, as amended, except as described below: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>On September&nbsp;30, 2010 the Luxembourg Holding Company issued 43,500,666 class&nbsp;C convertible preferred
certificates ("Class&nbsp;C CPCs") with a nominal value of EUR 1.- per Class&nbsp;C CPC for a total amount of EUR 43,500,666 to the Sponsor Limited Partnership. The offer, sale and issuance of
these securities were deemed to be exempt from registration under the Securities Act under Section&nbsp;4(2) of the Securities Act as transactions by an issuer not involving any public offering. No
underwriters were involved in the foregoing sales of securities.  </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><A
NAME="ja12701_item_16._exhibits_and_consolid__ite02384"> </A>
<A NAME="toc_ja12701_5"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;Exhibits and Consolidated Financial Statement Schedules.    <BR>    </B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B><I>(a)</I></B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B><I>Exhibits</I></B></FONT></DD></DL>
</UL>
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<p style="font-family:times;"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Exhibit No. </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Exhibit Description </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>**</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Form of Underwriting Agreement among Isola Group&nbsp;Ltd. and the Underwriters.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>3.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>*</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Memorandum and Articles of Association of Isola Group&nbsp;Ltd.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>4.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Shareholders and Registration Rights Agreement dated as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011 by and between Isola Group&nbsp;Ltd. and the
shareholders party thereto.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>4.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Contribution Agreement dated as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011 by and between Isola Group&nbsp;Ltd. and TPG Hattrick Partners,
&nbsp;L.P.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>4.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Specimen of Ordinary Share certificate.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>5.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Opinion of DLA Piper&nbsp;LLP (US).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>5.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Opinion of Appleby (Cayman Islands).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Form of Indemnification Agreement.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Isola Group&nbsp;Ltd. 2011 Equity Incentive Plan.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Form of Share Option Agreement (U.S. Participant).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Form of Share Option Agreement (Non-U.S. Participant).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Form of Restricted Shares Agreement (U.S. Participant).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Form of Restricted Shares Agreement (Non-U.S. Participant).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Amended and Restated Employment Agreement dated as of August&nbsp;11, 2008 by and between Isola USA Corp. and Raymond&nbsp;P. Sharpe.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.8</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Amendment to Amended and Restated Employment Agreement dated as of September&nbsp;30, 2010 by and between Isola USA Corp. and Raymond&nbsp;P. Sharpe.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Employment Agreement dated as of June&nbsp;30, 2009 by and between Isola USA Corp. and F.&nbsp;Gordon Bitter.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.10</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Employment Agreement dated as of April&nbsp;30, 2007 by and between Isola USA Corp. and Mathew&nbsp;R. LaRont.</FONT></TD>
</TR>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-3</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_ja12701_1_4"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Exhibit No. </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Exhibit Description </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.11</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>**</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Restated Employment Agreement dated as of October&nbsp;1, 2004 by and between Isola USA Corp. and Tarun Amla.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.12</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Employment Agreement dated as of July&nbsp;21, 2011 by and between Isola USA Corp. and Robert Chaney.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.13</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Employment Agreement dated as of February&nbsp;17, 2006 by and between Isola&nbsp;GmbH and Karl Stollenwerk.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.14</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Credit and Guaranty Agreement dated as of September&nbsp;30, 2010 by and between Isola USA Corp., Isola Group, Hattrick Lux No.&nbsp;2 S.&aacute;.r.l., Hattrick Lux No.&nbsp;4 S.&aacute;.r.l., Hattrick Holdings U.S.
Inc, the Lenders party thereto from time to time, and Goldman Sachs Lending Partners&nbsp;LLC, as syndication agent, as administrative agent, as collateral agent and as documentation agent.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Waiver and Amendment No.&nbsp;1 dated as of May&nbsp;19, 2011 to the Credit and Guaranty Agreement dated as of September&nbsp;30, 2010 by and between Isola USA Corp., Isola Group, Hattrick Lux No.&nbsp;2
S.&aacute;.r.l., Hattrick Lux No.&nbsp;4 S.&aacute;.r.l., Hattrick Holdings U.S.&nbsp;Inc., the Lenders party thereto, and Goldman Sachs Lending Partners&nbsp;LLC, as administrative agent.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.16</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Waiver and Amendment No.&nbsp;2 dated as of June&nbsp;30, 2011 to the Credit and Guaranty Agreement dated as of September&nbsp;30, 2010 by and between Isola USA Corp., Isola Group, Hattrick Lux No.&nbsp;2
S.&aacute;.r.l., Hattrick Lux No.&nbsp;4 S.&aacute;.r.l., Hattrick Holdings U.S.&nbsp;Inc., the Lenders party thereto, and Goldman Sachs Lending Partners&nbsp;LLC, as administrative agent.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.17</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Mezzanine Credit and Guaranty Agreement dated as of September&nbsp;30, 2010 by and between Isola USA Corp., Isola Group, Hattrick Lux No.&nbsp;2 S.&aacute;.r.l., Hattrick Lux No.&nbsp;4 S.&aacute;.r.l., Hattrick
Holdings U.S.&nbsp;Inc. and the Lenders party thereto.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.18</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Waiver and Amendment No.&nbsp;1 dated as of May&nbsp;19, 2011 to the Mezzanine Credit and Guaranty Agreement dated as of September&nbsp;30, 2010 by and between Isola USA Corp., Isola Group, Hattrick Lux No.&nbsp;2
S.&aacute;.r.l., Hattrick Lux No.&nbsp;4 S.&aacute;.r.l., Hattrick Holdings U.S.&nbsp;Inc. and the Lenders party thereto.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>10.19</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Waiver and Amendment No.&nbsp;2 dated as of June&nbsp;24, 2011 to the Mezzanine Credit and Guaranty Agreement dated as of September&nbsp;30, 2010 by and between Isola USA Corp., Isola Group, Hattrick Lux No.&nbsp;2
S.&aacute;.r.l., Hattrick Lux No.&nbsp;4 S.&aacute;.r.l., Hattrick Holdings U.S.&nbsp;Inc. and the Lenders party thereto.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>21</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Subsidiaries of Isola Group&nbsp;Ltd.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>23.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>**</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Consent of DLA Piper&nbsp;LLP (US) (included in Exhibit&nbsp;5.1).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>23.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>*</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Consent of Deloitte&nbsp;&amp; Touche&nbsp;LLP.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>23.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>*</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Consent of Deloitte&nbsp;&amp; Touche&nbsp;LLP.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>24.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>*</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Powers of Attorney (included on signature pages of Part&nbsp;II to this Registration Statement).</FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Filed
herewith
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>**</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>To
be filed by amendment </FONT></DD></DL>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-4</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=255,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=378449,FOLIO='II-4',FILE='DISK108:[11ZAS1.11ZAS12701]JA12701A.;30',USER='VSTEFAN',CD='30-OCT-2011;03:01' -->
<A NAME="page_ja12701_1_5"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B><I>(b)</I></B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B><I>Financial Statement Schedules</I></B></FONT></DD></DL>
</UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>Schedule&nbsp;1&#151;Financial
Statements of Parent Company as of January&nbsp;1, 2011 and December&nbsp;26, 2009 </FONT></P>

</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ja12701_financial_information_of_paren__fin04142"> </A>
<A NAME="toc_ja12701_6"> </A>
<BR></FONT><FONT SIZE=2><B>  Financial Information of Parent Company<BR>  Isola Group S.a.r.l.<BR>  <BR>    CONDENSED BALANCE SHEETS<BR>  As of January 1, 2011 and December 26, 2009    <BR>    </B></FONT></P>
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<p style="font-family:times;"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands,<BR>
except share amounts)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>ASSETS</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CURRENT ASSETS:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Receivables from subsidiaries</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>24</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total current assets</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>29</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL ASSETS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>29</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>LIABILITIES AND STOCKHOLDER'S DEFICIENCY</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CURRENT LIABILITIES:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accounts payable</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>44</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Payables to subsidiaries</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued taxes payable</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>359</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>274</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>364</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>325</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>OBLIGATION FROM INVESTMENT IN SUBSIDIARY&#151;NET</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>137,634</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>193,952</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CONVERTIBLE PREFERRED CERTIFICATES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>199,136</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>176,595</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>EMBEDDED DERIVATIVE</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>60,459</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27,513</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total liabilities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>397,593</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>398,385</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>STOCKHOLDER'S DEFICIENCY:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Common stock, 25&nbsp;Euro par value ($31)&#151;500 shares authorized, issued, and outstanding</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Additional paid-in capital</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>30,652</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28,160</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated deficit</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(394,602</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(399,684</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated other comprehensive loss</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(33,629</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(26,849</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total stockholder's deficiency</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(397,564</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(398,358</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>29</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>See
notes to condensed financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-5</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=256,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=502299,FOLIO='II-5',FILE='DISK108:[11ZAS1.11ZAS12701]JA12701A.;30',USER='VSTEFAN',CD='30-OCT-2011;03:01' -->
<A NAME="page_ja12701_1_6"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ja12701_financial_information_of_paren__fin05702"> </A>
<A NAME="toc_ja12701_7"> </A>
<BR></FONT><FONT SIZE=2><B>  Financial Information of Parent Company<BR>  Isola Group&nbsp;S.a.r.l.<BR>  <BR>    CONDENSED STATEMENTS OF OPERATIONS<BR>  For the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008    <BR>
</B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>December&nbsp;27,<BR>
2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>OPERATING EXPENSES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Sales, general, and administrative</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>165</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>94</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>165</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>94</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>OPERATING LOSS</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(165</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(177</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(94</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>OTHER INCOME&#151;Net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>212</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>132</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>116</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>INTEREST EXPENSE</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(10,631</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(10,454</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(15,079</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>INTEREST INCOME</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,890</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>11,115</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,116</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>INCOME / (LOSS) ON EQUITY INVESTMENT IN SUBSIDIARIES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,863</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(101,245</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35,939</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>FOREIGN EXCHANGE GAIN / (LOSS)&#151;Net</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(23</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>INCOME / (LOSS) BEFORE TAXES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,167</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(100,628</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35,975</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>PROVISION FOR INCOME TAXES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(85</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(98</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(176</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>NET INCOME / (LOSS)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(100,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35,799</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>See
notes to condensed financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-6</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=257,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=374748,FOLIO='II-6',FILE='DISK108:[11ZAS1.11ZAS12701]JA12701A.;30',USER='VSTEFAN',CD='30-OCT-2011;03:01' -->
<A NAME="page_ja12701_1_7"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ja12701_financial_information_of_paren__fin05675"> </A>
<A NAME="toc_ja12701_8"> </A>
<BR></FONT><FONT SIZE=2><B>  Financial Information of Parent Company<BR>  Isola Group&nbsp;S.a.r.l.<BR>  <BR>    CONDENSED STATEMENTS OF CASH FLOWS<BR>  For the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008    <BR>
</B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>January&nbsp;1,<BR>
2011 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>December&nbsp;26,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>December&nbsp;27,<BR>
2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=5 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(In thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CASH FLOWS FROM OPERATING ACTIVITIES:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net income / (loss)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,082</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(100,726</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35,799</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Adjustments to reconcile net income / (loss) to cash used in operating activities:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Equity in net (income) / loss of subsidiaries</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(4,863</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>101,245</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(35,939</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign currency translation</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>20</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accreted interest expense on convertible preferred certificates and amortization of discount</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,631</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,454</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,079</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accreted interest income on convertible preferred certificates in subsidiary and amortization of discount</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(10,890</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(11,115</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(15,116</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Change in operating assets and liabilities:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Receivables from subsidiaries</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Account payable</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(44</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued taxes payable</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>85</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>98</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>176</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash used in operating activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(52</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>55</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CASH FLOWS FROM INVESTING ACTIVITIES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Investment in subsidiary</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(57,707</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash used in investing activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(57,707</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CASH FLOWS FROM FINANCING ACTIVITIES</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proceeds from financing transactions</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>57,130</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proceeds of capital contributions</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>577</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash provided by / (used in) financing activities</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>57,707</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CASH&#151;Beginning of year</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>55</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=5 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CASH&#151;End of year</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>55</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>See
notes to condensed financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-7</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=258,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=419515,FOLIO='II-7',FILE='DISK108:[11ZAS1.11ZAS12701]JA12701A.;30',USER='VSTEFAN',CD='30-OCT-2011;03:01' -->
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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="jb12701_financial_information_of_paren__fin06953"> </A>
<A NAME="toc_jb12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  Financial Information of Parent Company<BR>  Isola Group&nbsp;S.a.r.l.    <BR>    <BR>    NOTES TO CONDENSED FINANCIAL STATEMENTS<BR>  As of January&nbsp;1, 2011 and December&nbsp;26, 2009, and for the fiscal years
ended<BR>  January&nbsp;1, 2011, December&nbsp;26, 2009, and December&nbsp;27, 2008    <BR>
</B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 1. BASIS OF PRESENTATION  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Isola Group S.a.r.l. (the "Parent Company") is a holding company incorporated in Luxembourg whose subsidiaries manufacture and sell
laminate products across Europe,
Asia, and the United States of America. Substantially all of its business operations are conducted through its subsidiaries. We refer to the Parent Company and its subsidiaries collectively as the
Company. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accompanying condensed financial statements of the Parent Company have been prepared in accordance with Rule&nbsp;12-04, Schedule&nbsp;I of
Regulation&nbsp;S-X, as the restricted net assets of the Parent Company's subsidiaries exceed 25% of the consolidated net assets of the Company. Accordingly, these statements have been
prepared on a "parent-only" basis. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
presentation on a parent-only basis, the Parent Company's investment in its consolidated subsidiaries is presented using the equity method of accounting. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
information and footnote disclosures normally included in financial statements prepared in accordance with U.S.&nbsp;GAAP have been condensed or omitted. As such, these
parent-only statements should be read in conjunction with the notes to the consolidated financial statements of the Company included elsewhere herein. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 2. CONVERTIBLE PREFERRED CERTIFICATES  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible Preferred Certificates ("CPCs") were issued to the sole shareholder of the Parent Company. In conjunction with each
issuance of CPCs to the sole shareholder, the Parent Company was issued CPCs from its subsidiary with the equivalent terms, interest rates, conditions and amounts, with the exception of the original
issuance of Class&nbsp;A and Class&nbsp;B CPCs. A CPC liability and embedded derivative liability with an offsetting CPC asset and embedded derivative asset were recorded with the issuance of the
Class&nbsp;C CPCs. See Note&nbsp;5 to the consolidated financial statements. The following table presents the carrying value of the CPCs at January&nbsp;1, 2011 and December&nbsp;26, 2009: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT SIZE=2>


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<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="93pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Investment in CPCs </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>CPC Liability </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>January&nbsp;1, 2001</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;A&nbsp;&amp; B, combined</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>128,797</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>128,249</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;C</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24,293</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>24,294</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accreted interest</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>47,524</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>46,593</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total, January&nbsp;1, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>200,614</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>199,136</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>December&nbsp;26, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;A&nbsp;&amp; B, combined</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>138,548</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>137,958</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accreted interest</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>39,352</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>38,637</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total, December&nbsp;26, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>177,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>176,595</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
investment in CPCs is included in the Obligation from Investment in Subsidiary&#151;net on the consolidated balance sheet as there is a right of offset. Due to the offsetting
effect of the embedded derivative asset and liability, the change in the fair value of the derivative is zero and not presented on the statement of operations. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-8</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=259,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=141401,FOLIO='II-8',FILE='DISK108:[11ZAS1.11ZAS12701]JB12701A.;20',USER='KSEAMON',CD='29-OCT-2011;18:59' -->
<A NAME="page_jb12701_1_9"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> 3. COMMITMENTS AND CONTINGENCIES  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Obligation from investment in subsidiary</B></FONT><FONT SIZE=2>&#151;The carrying value of an investment in one of the Company's subsidiaries reflects a negative balance as a
result of the recognition of cumulative reported losses. As the Company has the intention to fund current and any future losses, the Company continues to apply the equity method of accounting for the
investment in the subsidiary. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Parent Company's subsidiary, Isola USA&nbsp;Corp., entered into a series of financing transactions on September&nbsp;30, 2010, including a senior secured credit agreement and a
mezzanine credit agreement, with a syndicate of lenders, the majority of which are partial owners in an entity that is the Parent Company's sole stockholder (collectively "the Credit Agreements"). The
Parent Company guarantees the obligations of the borrower, Isola USA&nbsp;Corp., under the Credit Agreements. As of January&nbsp;1, 2011, there was $210.0&nbsp;million of outstanding principal
related to the senior secured credit agreement. As of January&nbsp;1, 2011, there was $178.6&nbsp;million of outstanding principal, which consisted of $175.0&nbsp;million in term loans and
$3.6&nbsp;million of accreted interest related to the mezzanine credit agreement. Additionally, see Note&nbsp;8 of the Company's consolidated financial statements for a discussion of its
commitments and contingencies. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-9</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=260,EFW="2205470",CP="ISOLA GROUP LTD.",DN="1",CHK=831537,FOLIO='II-9',FILE='DISK108:[11ZAS1.11ZAS12701]JB12701A.;20',USER='KSEAMON',CD='29-OCT-2011;18:59' -->
<A NAME="page_jb12701_1_10"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12701a_main_toc">Table of Contents</A></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>Schedule&nbsp;2&#151;Valuation
and Qualifying Accounts </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table provides details of the Company's valuation and qualifying accounts (in&nbsp;millions): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Beginning </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Ending<BR>
balance </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Balance </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Additions </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Deductions </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Other<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Fiscal Year Ended January&nbsp;1, 2011</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Valuation allowance for doubtful accounts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Valuation allowance for deferred income taxes</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>126.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>19.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(43.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>1.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>104.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Fiscal Year Ended December&nbsp;26, 2009</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Valuation allowance for doubtful accounts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>21.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(17.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(1.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>3.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Valuation allowance for deferred income taxes</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>121.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>35.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(26.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(3.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>126.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Fiscal Year Ended December&nbsp;27, 2008</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Valuation allowance for doubtful accounts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>17.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>6.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(2.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>21.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Valuation allowance for deferred income taxes</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>154.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>26.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>(68.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>8.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>121.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1><I>Includes foreign currency translation amounts and other comprehensive loss adjustments  </I></FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT SIZE=1><I> <A NAME="jb12701_item_17._undertakings."> </A>
<A NAME="toc_jb12701_2"> </A> </I></FONT><FONT SIZE=2><B>  Item&nbsp;17.&nbsp;&nbsp;&nbsp;Undertakings.    <BR>    </B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
undersigned Registrant hereby undertakes:
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>That,
for the purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as a part of this
registration statement in reliance upon Rule&nbsp;430A and conformed in a form of prospectus filed by the registrant pursuant to Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as of the time it was declared effective.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>That,
for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the security offered therein and the offering of such securities on such form shall be deemed to be the initial bona fide offering
thereof.
<BR><BR></FONT></DD></DL>
</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>II-10</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg12701a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="jc12701_signatures"> </A>
<A NAME="toc_jc12701_1"> </A>
<BR></FONT><FONT SIZE=2><B>  SIGNATURES    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Chandler, State of Arizona, on October&nbsp;31, 2011. </FONT></P>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>ISOLA GROUP&nbsp;LTD.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>By:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>/s/&nbsp;RAYMOND P. SHARPE<BR>


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</FONT>
 </TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Name:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Raymond P. Sharpe</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Title:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><I> President and Chief Executive Officer<BR>
(Principal Executive Officer)</I></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>By:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>/s/&nbsp;F. GORDON BITTER<BR>


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</FONT>
 </TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Name:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>F. Gordon Bitter</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Title:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><I> Executive Vice President and Chief Financial Officer<BR>
(Principal Financial Officer)</I></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>By:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>/s/&nbsp;NINA HARALAMBIDIS<BR>


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</FONT>
 </TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Name:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Nina Haralambidis</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Title:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><I> Vice President, Corporate Controller and Chief Accounting Officer<BR>
(Principal Accounting Officer)</I></FONT></TD>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="jc12701_powers_of_attorney"> </A>
<A NAME="toc_jc12701_2"> </A>
<BR></FONT><FONT SIZE=2><B>  POWERS OF ATTORNEY    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints F. Gordon Bitter and
Michael&nbsp;S. Rafford, or any one of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name,
place, and stead, in any and all capacities, to sign any and all amendments to this registration statement, including post-effective amendments thereto and any registration statements
filed pursuant to Rule&nbsp;462 under the Securities Act of 1933, and to file the same, with all exhibits hereto, and other documents in connection therewith, with the Securities and Exchange
Commission, and does hereby grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. </FONT></P>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
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<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>/s/&nbsp;RAYMOND P. SHARPE<BR>


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</FONT> <FONT SIZE=2> Raymond P. Sharpe</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Director, President and Chief Executive Officer</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>October&nbsp;31, 2011</FONT></TD>
</TR>
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<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>/s/&nbsp;KEVIN R. BURNS<BR>


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</FONT> <FONT SIZE=2> Kevin R. Burns</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>October&nbsp;31, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>/s/&nbsp;DONALD A. COLVIN<BR>


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</FONT> <FONT SIZE=2> Donald A. Colvin</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>October&nbsp;31, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>/s/&nbsp;H. MCINTYRE GARDNER<BR>


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</FONT> <FONT SIZE=2> H. McIntyre Gardner</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>October&nbsp;31, 2011</FONT></TD>
</TR>
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<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>/s/&nbsp;JORDON L. KRUSE<BR>


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</FONT> <FONT SIZE=2> Jordon L, Kruse</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>October&nbsp;31, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>/s/&nbsp;JEFFREY S. MCCREARY<BR>


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</FONT> <FONT SIZE=2> Jeffrey S. McCreary</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>October&nbsp;31, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>/s/&nbsp;ERIC W. NOETH<BR>


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</FONT> <FONT SIZE=2> Eric W. Noeth</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>October&nbsp;31, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>/s/&nbsp;CASSIDY J. TRAUB<BR>


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</FONT> <FONT SIZE=2> Cassidy J. Traub</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>October&nbsp;31, 2011</FONT></TD>
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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
As filed with the Securities and Exchange Commission on October 31, 2011
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Isola Group Ltd.
(Exact name of registrant as specified in its charter)
Cayman Islands
(State or other jurisdiction of
incorporation or organization)
3672
(Primary Standard Industrial
Classification Code Number)
38-3853493
(I.R.S. Employer
Identification No.)
3100 West Ray Road, Suite 301
Chandler, Arizona 85226
(480) 893-6527
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Raymond P. Sharpe
President and Chief Executive Officer
Isola Group Ltd.
3100 West Ray Road, Suite 301
Chandler, Arizona 85226
(480) 893-6527
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Steven D. Pidgeon, Esq.
DLA Piper LLP (US)
2525 East Camelback Road, Suite 1000
Phoenix, Arizona 85016
(480) 606-5100
Fax: (480) 606-5101
Julia Cowles, Esq.
Davis Polk & Wardwell LLP
1600 El Camino Real
Menlo Park, California 94025
(650) 752-2000
Fax: (650) 752-2111
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effectiveness of this registration statement.
If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box.
o
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.
o
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
o
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
ý
(Do not check if a
smaller reporting company)
Smaller reporting company
o
CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered
Proposed maximum aggregate offering price(1)(2)
Amount of registration fee(3)
Ordinary Shares, $0.0001 par value
$100,000,000
$11,460
(1)
Includes
ordinary shares issuable upon exercise of an option to purchase additional shares from us granted to the underwriters.
(2)
Estimated
solely for the purpose of calculating the registration fee pursuant to Rule 457 of the Securities Act.
(3)
Calculated
pursuant to Rule 457(o) under the Securities Act.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or
until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Table of Contents
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and
we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS                        Subject to completion,
                        Dated October 31, 2011
Shares
Ordinary shares
This is the initial public offering of our ordinary shares. No public market currently exists for our ordinary shares. It is currently estimated that the
initial public offering price will be between $             and $             per share.
We
intend to apply to have our ordinary shares listed on the Nasdaq Global Market under the symbol "ISLA".
Investing in our ordinary shares involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our
ordinary shares in "Risk Factors" beginning on page 11 of this prospectus.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
Per share
Total
Initial public offering price
$
$
Underwriting discount
$
$
Proceeds, before expenses, to us
$
$
The
underwriters have the option, exercisable on or before the thirtieth day after the date of this prospectus, to purchase up to an
additional                           ordinary shares from us
at the public offering price, less the underwriting discounts and commissions, to cover over-allotments, if any.
The
underwriters are offering the ordinary shares as set forth under "Underwriting". Delivery of the shares will be made on or
about                           , 2011.
UBS Investment Bank
Piper Jaffray
Needham & Company, LLC
Oppenheimer & Co.
The
date of this prospectus is                           , 2011
Table of Contents
You should rely only on the information contained in this prospectus. We and the underwriters have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to buy, ordinary shares only in jurisdictions where offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date on the front cover of this prospectus, or such other dates as are stated in this prospectus, regardless of the time of delivery of this prospectus or of any
sale of our ordinary shares.
TABLE OF CONTENTS
Prospectus
Page
Prospectus Summary
1
Risk Factors
11
Forward-looking Statements
28
Use of Proceeds
29
Dilution
30
Dividend Policy
32
Capitalization
33
Selected Historical Consolidated Financial and Other Data
34
Management's Discussion and Analysis of Financial Condition and Results of
Operations
37
Business
80
Management
97
Executive Compensation
103
Principal Shareholders
123
Certain Relationships and Related Party Transactions
126
Shares Eligible for Future Sale
130
Description of Share Capital
132
Description of Indebtedness
146
Taxation
148
Underwriting
152
Validity of Ordinary Shares
158
Experts
158
Additional Information
158
Index to Consolidated Financial Statements
F-1
Through and including                               (25 days after the
commencement of the offering), all dealers effecting transactions in
these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer's obligation to deliver a prospectus when acting as an
underwriter and with respect to unsold allotments or subscriptions.
i
Table of Contents
MARKET RANKING AND INDUSTRY DATA
This prospectus includes estimates of market share and industry data and forecasts that we obtained from industry publications and surveys, including
market research firms and government sources, and internal company sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from
sources believed to be reliable. In addition, certain market and industry data included in this prospectus, and our position and the positions of our competitors within these markets, are based on
estimates of our management, which are primarily based on our management's knowledge and experience in the markets in which we operate. These estimates involve risks and uncertainties and are subject
to change based on various factors, including those discussed under the heading "Risk Factors" in this prospectus.
Throughout
this prospectus, when we refer to our "addressable" market for PCB laminate materials, or segments of our "addressable" market for PCB laminate materials, we exclude paper and composite
laminate segments, and the internal Japanese market, none of which are addressed by Isola.
TRADEMARKS AND TRADE NAMES
This prospectus contains registered and unregistered trademarks and service marks of us and our subsidiaries, as well as trademarks and service marks
of third parties. All brand names, trademarks and service marks appearing in this prospectus are the property of their respective holders.
CONVENTIONS THAT APPLY IN THIS PROSPECTUS
Fiscal Year
In this prospectus, unless the context requires otherwise, references to fiscal 2011 are for the fiscal year ending December 31, 2011,
references to fiscal 2010 are for the fiscal year ended January 1, 2011, references to fiscal 2009 are for the fiscal year ended December 26, 2009, references to fiscal 2008 are for the
fiscal year ended December 27, 2008, references to fiscal 2007 are for the fiscal year ended December 29, 2007, references to fiscal 2006 are for the fiscal year ended
December 30, 2006, references to fiscal 2005 are for the fiscal year ended December 31, 2005, and references to fiscal 2004 are for the fiscal year ended December 31, 2004.
Technical Terms
–>
"Dielectric"
refers to an electrical insulator that can be polarized by an applied electric field. When a dielectric is placed in an electric field, electric charges
do not flow through the material, as in a conductor, but only slightly shift from their average equilibrium positions causing dielectric polarization.
–>
"Dielectric
Constant" refers to a measure of how close a material comes to free space (air) conditions and how constant these conditions hold through the material.
–>
"Glass
Transition Temperature" or "Tg" refers to the temperature in Celsius at which the laminate begins to change between a hard, relatively brittle condition and a
viscous, or rubbery, condition.
–>
"Lead-free"
refers to laminates or prepreg that are suitable for lead-free soldering in the assembly of finished printed circuit boards. No
laminates or prepreg actually contain the element lead. The distinction is important, however, as lead-free solders melt at higher temperatures than solders containing lead, which require
laminates and prepreg capable of withstanding the stresses of a higher temperature environment.
ii
Table of Contents
–>
"Loss",
in the context of a material's characteristics, refers to the ratio of energy dissipated to energy stored.
–>
"Prepreg"
is an industry term derived from the contraction of "
pre
viously
im
preg
nated". Prepreg is a dielectric material that provides electrical insulation properties. It is manufactured, as the
term suggests, by the impregnation of fabric with specially formulated resin systems that confer specific electrical, thermal and physical properties to the prepreg. While modern prepreg is generally
made from fiberglass fabric, some simple consumer electronics still use prepreg made from paper or paper composite. Prepreg is both a final product and an intermediate-stage product in the manufacture
of copper-clad laminate.
iii
Table of Contents
Prospectus Summary
This summary highlights important information about our business and about this prospectus. This summary does
not contain all of the information that may be important to you. You should carefully read this prospectus in its entirety before making an investment decision. In particular, you should read the
section titled "Risk Factors" and the consolidated financial statements and notes related to those statements included elsewhere in this prospectus. Unless the context indicates otherwise, we use the
terms "Isola", "we", "our", the "Company", and "us" in this prospectus to refer to Isola Group Ltd., and, where appropriate, its consolidated subsidiaries. Unless otherwise indicated, the
information contained in this prospectus assumes the completion of the
reorganization as described in this prospectus under "Concurrent Transactions" immediately prior to the consummation of this offering.
ISOLA GROUP LTD.
Overview
Isola is a leading global material sciences company that designs, develops and manufactures copper-clad laminate ("CCL")
and prepreg (collectively, "laminate materials") used to fabricate advanced multilayer printed circuit boards ("PCBs"). PCBs provide the physical platform for the semiconductors, passive components
and connection circuitry that power and control virtually all modern electronics. We focus on the market for high-performance laminate materials, developing proprietary resins that are
critical to the performance of PCBs used in advanced electronic applications. We continually invest in research and development and believe that our industry-leading resin formulations, many of which
are patented, provide us with a competitive advantage. With 11 manufacturing facilities and three research centers worldwide, as well as a global sales force, we are the largest supplier of laminate
materials to PCB fabricators in the United States and Europe, and we are one of the larger suppliers in our addressable Asian market, based on revenue for fiscal year 2010.
Our
high-performance PCB laminate materials are used in a variety of advanced electronics, including network and communications equipment and high-end consumer electronics, as
well as advanced automotive, aerospace, military and medical applications. Demand in these markets is driven by the rapid growth of bandwidth-intensive high-speed data transmission, the expansion of
the internet, the emergence of cloud computing and the evolution of increasingly complex communications technology. This has led to an urgent need for the development of the underlying infrastructure
to support this growth, including faster and more efficient semiconductor technology. In addition, increasingly pervasive environmental regulations are driving a need for lead-free
compatible, high-performance laminate materials.
We
sell our products globally to leading PCB fabricators, including DDi, Ruwel, Sanmina, TTM Technologies, Viasystems and WUS Printed Circuit. These fabricators produce PCBs incorporating our laminate
materials for electronic equipment designed or produced by a broad group of major original equipment manufacturers, or OEMs, including Alcatel-Lucent, Brocade, Cisco, Google, Hewlett-Packard, Huawei,
IBM and Sun Microsystems (now Oracle). We work closely with these
leading PCB fabricators and major OEMs to ensure that our high-performance laminate materials incorporating our proprietary resins meet the thermal, electrical and physical performance
criteria of each new generation of electronic equipment.
We
were acquired in 2004 by a group of investors led by TPG Capital, a global private equity firm, and Redfern Partners, a strategic partner and investor in the laminate materials industry. Under the
direction of TPG Capital and our management, we have undertaken a number of operational changes that have increased manufacturing efficiencies and improved business processes. We believe that these
measures, together with our focus on higher margin high-performance products, provide us with the operating leverage to take advantage of improving economic conditions.
1
Table of Contents
Our
history dates back nearly 100 years to the founding of Isola Werke AG in Germany in 1912. Isola Werke AG manufactured insulators utilizing the then-revolutionary Bakelite
plastic technology, which provided superior insulating and heat resistance properties. We began production of copper-clad epoxy laminates, the direct predecessors of today's PCB laminate
products, in the 1960s. In 2006, we acquired the assets of Polyclad Laminates, Inc., which extended our product portfolio and expanded our business in the growing Asian markets.
For
the six months ended July 2, 2011, our revenue was $316.6 million, Adjusted EBITDA was $49.2 million, and our net loss was $19.1 million, as compared to revenue of
$307.0 million, Adjusted EBITDA of $49.2 million and a net loss of $30.5 million for the six months ended June 26, 2010. For fiscal 2010, our revenue was
$612.0 million, our Adjusted EBITDA was $89.7 million and our net income was $5.1 million, as compared to revenue of $416.1 million, Adjusted EBITDA of $39.0 million
and net loss of $100.7 million in fiscal 2009. For an understanding of our primary non-GAAP metric, Adjusted EBITDA, including reconciliation to net income, see our discussion of
non-GAAP financial measures in "Selected Historical Consolidated Financial and Other Data", included elsewhere in this prospectus.
Industry Overview and Market Opportunity
Current trends and drivers in the PCB laminate materials industry include:
–>
rapidly
expanding infrastructure requirements for high-speed data transmission and increasing demand for high-performance PCB laminate
materials;
–>
increased
performance requirements of advanced electronics requiring high-performance PCB laminate materials;
–>
growing
demand for environmentally friendly, lead-free compatible laminate materials; and
–>
greater
emphasis on collaboration with OEMs and PCB fabricators.
High-performance
PCB laminate materials are defined by their superior performance capabilities achieved primarily through the use of advanced resin formulations. These products compete
primarily on their technological capabilities and are used in circuit boards that combine eight or more layers, with some applications requiring circuit boards with more than 20 layers. Our
high-performance laminate materials have a variety of applications in the markets for servers and storage devices, network communications, advanced automotive electronics,
high-end consumer electronics, military/aerospace equipment, medical equipment and satellite television receivers.
Significant
barriers to entry exist within the high-performance PCB laminate materials industry, including capital intensity, long-term customer relationships characterized by
pre-production collaboration, and lengthy periods (often up to one year) taken by OEMs to qualify laminates for new products. Once a particular PCB laminate material is designed in or
qualified for use in a specific product line and one or more particular laminate suppliers are selected, these suppliers tend to remain suppliers of choice, even as the PCBs for these products change
to address OEM product line improvements, extensions or next generation developments.
Based
on data from Prismark, an independent research firm, we estimate that our addressable market for high-performance PCB laminate materials was $4.6 billion in 2010. According to
BPA, another independent research firm, the market for multilayer PCB laminate materials (predominantly comprised of the high-performance market segment) is expected to make up
approximately 55% of the worldwide PCB laminate materials market in 2011 (measured in square meters) and remains the fastest growing segment with an expected compound annual growth rate, or CAGR, of
12.4% from 2010 to 2014 for PCB production value.
2
Table of Contents
Our Competitive Strengths
We believe that we possess the following competitive strengths, which will enable us to continue to grow our business globally:
Product technology leadership.
Our significant technology expertise enables us to produce market-leading high-performance PCB laminate materials. We
possess an extensive portfolio of patent and other intellectual property rights covering our proprietary resin formulations and we believe we have pioneered the development of several product
categories with "best in class" technology. Our proprietary resin formulations are capable of supporting complex circuit boards used in the most demanding electronic equipment and differentiate our
products from commonly available, lower-performance materials. We continue to devote considerable efforts to research and develop new resin formulations and other PCB laminate materials to meet
evolving market needs.
Recognized market leadership.
We maintain a leading market share, based on revenues, in each of our larger addressable markets for high-performance
laminate materials. We have an established reputation as an industry leader and product innovator with strong brand recognition, which we believe will play a significant role in our future growth.
Blue-chip customer base served by global strategic manufacturing locations.
We have developed strong, long-term relationships with leading
global PCB fabricators and the major OEMs they serve. We believe that these collaborative relationships provide us with a competitive advantage and assist us in bringing new products to market in a
timely manner. We own state-of-the-art equipment in manufacturing facilities that are strategically located around the world in close proximity to these key
industry participants. Our global network of plants facilitates quick-turn manufacturing and delivery of product, which reduces our customers' inventory levels and shipping costs.
Streamlined manufacturing with significant operating leverage.
We seek to achieve continual improvement in our manufacturing and business processes. We use "six
sigma" processes and "lean" best practices, and we recently completed the implementation of a sophisticated SAP-based enterprise resource planning ("ERP") and analytical system across our
global operations. In 2009, we closed three of our manufacturing facilities to improve factory utilization and lowered our fixed costs. Together with other measures, these closures are estimated to
result in permanent fixed cost savings of approximately $30 million annually.
Experienced management team.
We have a highly experienced management team comprised of well-respected industry veterans who possess an average of over
20 years of experience in the electronics industry. Our management team has a proven track record of implementing sound business practices, including focusing our product development on higher
margin products, improving the efficiency of our manufacturing facilities and successfully integrating acquired businesses.
Our Growth Strategies
We intend to extend our market leadership in the higher margin, high-performance laminate materials market through the following growth
strategies:
Leverage collaborative relationships and technology leadership to develop innovative solutions.
We have implemented focused product development teams to further
expand our relationships with leading PCB fabricators and the OEMs they serve. Our product development teams include members of our research and development, technical support and OEM marketing
groups, all working under the direction of our Chief Technology Officer. Our teams actively monitor OEM product developments and engage in regular dialog with OEMs and their PCB fabricators in order
to anticipate and plan for future electrical, thermal and physical product specifications. Through this collaborative effort we seek to develop innovative laminate materials solutions that meet future
OEM product requirements.
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Further penetrate the Asian market.
Many OEMs and PCB fabricators are migrating manufacturing of increasingly complex electronic equipment to Asia. In addition,
several Asian markets are simultaneously undergoing infrastructure build-outs as their economies grow and develop. To supply this market, six of our 11 manufacturing facilities are located
in Asia, and we maintain a sales force dedicated to serving this region. We will seek to capitalize on the opportunities presented by the very large and fast growing Asian markets for
high-performance laminate materials based on the high quality of our products and technology.
Extend high-performance products into new applications.
We believe that other markets will benefit from our laminate materials and proprietary resin
formulations, including the markets for advanced automotive equipment and consumer devices such as next generation smart phones and tablets. In addition, we believe that environmental regulations will
become increasingly global and expand the addressable market for our high-performance, lead-free compatible and halogen-free PCB laminate materials. We intend to
devote sales and technical resources to address these growing potential markets.
Opportunistically pursue strategic acquisitions and alliances.
We have grown through select acquisitions since we were acquired in 2004. While we believe that our
future success will depend primarily on product innovation from collaborative relationships with our major customers and the OEMs they serve, we may pursue strategic acquisitions that provide
complementary products or technologies.
Risk Factors
An investment in our ordinary shares involves risks. For a discussion of factors you should consider before deciding to invest in our ordinary
shares, we refer you to "Risk Factors" and the following summary:
–>
the
markets for our customers' products are volatile, which can cause wide swings in the demand for our products;
–>
we
depend upon a relatively small number of customers for a large portion of our sales, and a decline in sales to major customers could harm our results of
operations;
–>
we
sell on a purchase order basis and are subject to uncertainties and variability in demand by our customers that could decrease revenues and harm our results of
operations;
–>
we
depend on a small number of suppliers for the raw materials and certain components used to manufacture our products. If these suppliers fail to provide an
adequate supply of raw materials or components of sufficient quality, or these suppliers become unavailable to us, we may experience significant delays in the manufacturing and shipping of our
products to customers and our business could suffer;
–>
we
face intense competition in the PCB materials industry, including from diversified manufacturers and suppliers, which could negatively impact our results of
operations and cause our market share to decline;
–>
if
demand for high-performance, higher margin products does not increase, our future gross margins and operating results may be worse than expected; and
–>
our
failure to respond timely or adequately to market changes may render our existing technology less competitive or obsolete, and our operating results may suffer.
The Principal Sponsors
Our current principal sponsors (the "Principal Sponsors") are:
TPG Capital.
TPG Capital, L.P. (together with its affiliates, "TPG Capital") is the global buyout group of TPG, a leading private investment firm founded in
1992 with approximately $48 billion of assets under management as of June 30, 2011 and offices in San Francisco, Beijing, Fort Worth, Hong Kong, London, Luxembourg, Melbourne,
Moscow, Mumbai, New York, Paris, Shanghai, Singapore and Tokyo. TPG
4
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Capital
has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, growth investments, joint ventures and restructurings. TPG
Capital's investments span a variety of industries including financial services, travel and entertainment, technology, industrials, retail, consumer, media and communications, and healthcare.
Oaktree.
Oaktree Capital Management, L.P. (together with its affiliates, "Oaktree") is a premier global alternative and non-traditional
investment manager with approximately $80 billion of assets under management as of June 30, 2011. The firm emphasizes an opportunistic, value-oriented and risk-controlled
approach to investments in distressed debt, high-yield bonds, convertible securities, senior loans, corporate control, real estate, emerging market equities and mezzanine finance. Oaktree
was founded in 1995 by a group of principals who have worked together since the mid-1980s. Headquartered in Los Angeles, the firm has over 600 staff members and offices in 13 cities
worldwide.
Concurrent Transactions
Corporate Reorganization
Currently, we operate through Isola Group S.a.r.l., a holding company incorporated in Luxembourg (the "Luxembourg Holding Company"), a low-tax
jurisdiction. The Luxembourg Holding Company is owned by investors that include TPG Capital, Oaktree, Clearlake Capital and its affiliates, Tennenbaum Capital and its affiliates, The Blackstone
Group LP and its affiliates, Redfern Partners, LLC and its affiliates and certain members of our management (collectively, the "Sponsors"). The Sponsors hold their investment in the
Luxembourg Holding Company through
two parent entities: TPG Hattrick Partners, L.P. (the "Sponsor Limited Partnership") and TPG Hattrick Holdco, LLC (the "Sponsor Holding Company"). The Sponsor Holding Company is the
general partner of the Sponsor Limited Partnership.
The
Sponsor Limited Partnership currently owns all of the issued and outstanding securities of the Luxembourg Holding Company, including 500 common shares and three classes of convertible preferred
certificates (420,455 Class A convertible preferred certificates, 95,788,400 Class B convertible preferred certificates and 43,500,666 Class C convertible preferred certificates)
that are accounted for as debt.
In
preparation for our initial public offering, the Sponsor Limited Partnership recently formed a new company in the Cayman Islands, a tax-exempt jurisdiction, called Isola Group Ltd.
Immediately prior to the completion of our initial public offering, we will undergo a corporate reorganization that includes the following steps:
–>
all
of the outstanding securities of the Luxembourg Holding Company, including the common shares and convertible preferred certificates described above, will be
contributed by the Sponsor Limited Partnership to Isola Group Ltd., which will result in Isola Group Ltd. becoming our new holding company and the Luxembourg Holding Company becoming a
subsidiary of Isola Group Ltd.;
–>
both
the Sponsor Limited Partnership and the Sponsor Holding Company will be liquidated and the ordinary shares of Isola Group Ltd. will be distributed to our
Sponsors; and
–>
all
outstanding management equity awards in the Sponsor Limited Partnership and the Sponsor Holding Company will be terminated and replaced with new equity awards
for ordinary shares of Isola Group Ltd. that have the same value and substantially the same terms.
At
the completion of our initial public offering:
–>
Isola
Group Ltd. will be a public company;
–>
assuming
the underwriters do not exercise their over-allotment option, the Principal Sponsors will together own approximately         % of our
outstanding ordinary shares, investors in our initial public offering will own approximately         % of our outstanding ordinary shares and there will be options outstanding to purchase
approximately         % of our outstanding ordinary shares; and
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–>
the
Sponsors and Isola Group Ltd. will enter into a shareholders agreement that provides for certain board representation rights and registration rights with
respect to their ordinary shares.
Refinancing
In connection with this offering, we intend to enter into a new senior secured credit facility consisting of a $              million senior
secured term loan and a $              million senior secured revolving credit facility. The proceeds of the new term loan will be used to repay the outstanding balances under the
existing
senior secured credit agreement and mezzanine credit agreement that are not repaid from the proceeds of this offering. We expect the new senior secured credit facility to be completed concurrently
with the closing of this offering. Our entry into the new senior secured credit facility is conditioned on the completion of this offering. See "Description of Indebtedness".
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Corporate Information about Isola Group Ltd.
Isola Group Ltd. was incorporated under the laws of the Cayman Islands on September 20, 2011. Our principal executive offices are
located at 3100 W. Ray Road, Suite 301, Chandler, Arizona 85226. The telephone number of our principal executive offices is (480) 893-6527, and we maintain a
website at www.isola-group.com. The information on, or that can be accessed through, our website is not part of this prospectus.
The Offering
Issuer
Isola Group Ltd.
Ordinary Shares Offered by Issuer
shares.
Option to Purchase Additional Shares
We have granted the underwriters a 30-day option to purchase up to an additional                  ordinary
shares at the initial public offering price less the underwriting discount.
Ordinary Shares to Be Outstanding Immediately After this Offering
shares.
Ordinary Shares to be Beneficially Owned by the Sponsors Immediately After this Offering
shares. See "Principal Shareholders".
Use of Proceeds
We intend to use the net proceeds of this offering, together with the proceeds of the term loan under a new senior secured credit facility that we expect to enter into at the completion of this
offering, to prepay all of the term loans outstanding under our existing senior secured credit agreement and mezzanine credit agreement at a redemption price of 100% plus interest to the prepayment date.
As of July 2, 2011, we had $210.0 million aggregate principal amount of senior secured term loans outstanding that currently bear interest at a rate of 10% per annum and mature on
September 30, 2015, and $185.7 million aggregate principal amount of unsecured term loans outstanding that currently bear interest at a rate of 16% per annum and mature on March 24, 2016. See "Use of Proceeds" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources".
Dividend Policy
We do not intend to pay cash dividends on our ordinary shares for the foreseeable future. See "Dividend Policy".
Lock-up
We, our executive officers and directors and certain holders of our outstanding ordinary shares, stock options and other equity awards that together hold at
least         % of our outstanding ordinary shares have agreed with the underwriters, subject to certain exceptions, not to offer, sell, contract to sell or otherwise, directly or indirectly, dispose of or
hedge any of our ordinary shares or securities convertible into or exchangeable or exercisable for our ordinary shares for a period of 180 days after the date of this prospectus. See "Underwriting" for more information.
Proposed Nasdaq Global Market Symbol
ISLA.
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The number of ordinary shares to be outstanding immediately after this offering as set forth above is based on the number of ordinary shares outstanding at
                           , 2011, and excludes an aggregate
of                  additional ordinary shares that will be available for future awards pursuant to our 2011 Equity Incentive Plan.
Unless
otherwise indicated, all information in this prospectus assumes no exercise of the underwriters' option to purchase additional ordinary shares from us.
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Summary Historical Consolidated Financial and Other Data
The following table presents our summary historical consolidated financial and other data. The consolidated statements of operations data and other
financial data for fiscal 2010, 2009 and 2008, and the consolidated balance sheet data as of the end of fiscal 2010, are derived from our audited consolidated financial statements which are included
elsewhere in this prospectus. The consolidated statements of operations and other financial data for the six months ended July 2, 2011 and June 26, 2010, and the consolidated balance
sheet data as of July 2, 2011, are derived from our unaudited interim financial statements for those periods included elsewhere in this prospectus. These unaudited interim financial statements
have been prepared on a basis consistent with the respective audited consolidated financial statements and, in the opinion of management, include all adjustments, consisting of normal, recurring
adjustments, necessary for a fair presentation of that
information for such periods. The financial data presented for the interim periods are not necessarily indicative of the results for the full year.
The
summary historical financial data below should be read in conjunction with "Use of Proceeds", "Capitalization", "Selected Historical Consolidated Financial and Other Data", and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and related notes included elsewhere in this prospectus.
Six months ended
Fiscal year
June 26, 2010
July 2, 2011
2010
2009
2008
(dollars in thousands, except per share amounts)
Consolidated Statement of Operations Data:
Revenues
$
316,583
$
306,957
$
611,987
$
416,140
$
570,333
Cost of goods sold
240,433
231,908
467,751
330,584
487,052
Gross profit
76,150
75,049
144,236
85,556
83,281
Operating expenses:
Sales, general and administrative
38,371
31,343
65,271
59,656
62,763
Research and development
5,193
4,817
9,532
9,244
10,663
Restructuring
177
3,464
4,782
18,129
7,692
Goodwill impairment
—
—
—
—
8,513
Total operating expenses
$
43,741
$
39,624
$
79,585
$
87,029
$
89,631
Operating income / (loss)
32,409
35,425
64,651
(1,473
)
(6,350
)
Other income—net
1,031
3,005
2,020
224
2,768
Embedded derivative gain / (loss)
17,472
(58,162
)
25,030
(27,513
)
115,352
Interest expense
(1)
(39,032
)
(26,997
)
(72,134
)
(54,620
)
(58,478
)
Interest income
94
159
339
453
1,307
Foreign exchange gain / (loss)—net
(20,402
)
27,863
9,596
(2,116
)
(341
)
Income / (loss) from continuing operations before income taxes
(8,428
)
(18,707
)
29,502
(85,045
)
54,258
Provision for income taxes
(10,679
)
(11,818
)
(24,420
)
(6,504
)
(6,804
)
Loss from discontinued operations, net of tax
—
—
—
(9,177
)
(11,655
)
Net income / (loss)
(19,107
)
(30,525
)
5,082
(100,726
)
35,799
Net income / (loss) per common share
Basic
$
(38.21
)
$
(61.05
)
$
10.16
$
(201.45
)
$
71.60
Diluted
$
(38.21
)
$
(61.05
)
$
10.16
$
(201.45
)
$
71.60
Weighted average number of common and common equivalent shares outstanding
Basic
500
500
500
500
500
Diluted
500
500
500
500
500
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Six months ended
Fiscal year
July 2, 2011
2010
(dollars in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents
$
56,010
$
36,733
Current assets
228,537
201,208
Current liabilities
149,242
131,603
Working capital
79,295
69,605
Long-term debt and capital lease obligations
319,784
306,547
Convertible preferred certificates
224,679
199,136
Embedded derivative liability
54,087
66,395
Total liabilities
820,260
774,758
Common stock and additional paid in capital
31,879
30,667
Total stockholders' deficiency
(417,894
)
(397,564
)
Six months ended
Fiscal year
July 2, 2011
June 26, 2010
2010
2009
2008
(dollars in thousands, except per share amounts)
Other Financial Data:
Adjusted EBITDA
(2)
$
49,180
$
49,186
$
89,661
$
38,983
$
37,647
(1)
Interest expense for the six months ended July 2, 2011 was $39.0 million (comprised of cash interest expense of $18.0 million and non-cash interest
expense of $21.0 million). Non-cash interest expense includes the amortization of deferred loan origination costs, the amortization of original issue discount, the accretion of
interest paid-in-kind on our debt under our mezzanine credit agreement and the accretion of interest on our convertible preferred certificates. We intend to use the proceeds of
this offering to reduce our current indebtedness and to refinance the remaining balance of our current indebtedness with $              million borrowed under a new senior secured
credit
facility bearing interest at         % per annum. If such transactions had occurred as of the end of fiscal 2010, our total interest expense for the six months ended July 2, 2011 would
have been $              million.
(2)
Adjusted EBITDA is a supplemental non-GAAP measure used by management and external users of our consolidated financial statements. We define adjusted EBITDA as net
income / (loss) less (A) loss from discontinued operations, net of tax, plus (B) (i) interest expense and interest income, net, (ii) provision for income taxes,
(iii) depreciation and amortization and (iv) certain additional adjustments. These additional adjustments include stock-based compensation, restructuring charges, foreign exchange
gain / (loss)—net, goodwill impairment, management fees paid to TPG Capital, embedded derivatives gain / (loss), gain related to a settlement of a patent infringement matter
and pre-IPO expenses. For more information on Adjusted EBITDA and a reconciliation of net income (loss), the most directly comparable financial measure under U.S. GAAP, to Adjusted
EBITDA for the periods presented, see footnote 4 to "Selected Historical Consolidated Financial and Other Data". Because not all companies use identical calculations, our presentation of
Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.
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Risk Factors
An investment in our ordinary shares involves a high degree of risk. You should carefully consider the
following information, together with other information in this prospectus, before buying our ordinary shares. If any of the following risks or uncertainties occur, our business, results of operations
and financial condition could be materially adversely affected. In that case, the trading price of our ordinary shares could decline, and you may lose all or a part of the money you paid to buy our
ordinary shares.
RISKS RELATED TO OUR INDUSTRY AND BUSINESS
The markets for our customers' products are volatile, which can cause wide swings in the demand for our products.
Our business depends on the electronics industry, which is cyclical and subject to significant downturns characterized by diminished product demand,
rapid declines in average selling prices and over-capacity. This industry has experienced periods characterized by relatively low demand and price depression and is likely to experience
recessionary periods in the future. Economic conditions affecting the electronics industry in general, or specific market segments,
such as computers and communications, have adversely affected our operating results in the past and may do so in the future.
Over
the past three years, the global economy has been greatly impacted by the recessionary conditions linked to rising default levels in the U.S. home mortgage sector, volatile fuel prices, and a
changing political and economic landscape. These factors have contributed to historically low consumer confidence levels, resulting in a significantly intensified downturn in demand for products
incorporating PCBs, which in turn lowered demand for our products and adversely affected our operating results. When we experience excess capacity, variable margins from our revenues may not fully
cover our fixed overhead expenses, and our gross margins may fall. A lasting economic recession, excess manufacturing capacity, or a prolonged decline in the electronics industry could negatively
affect our business, results of operations, and financial condition.
In
order to respond to quick-turn orders and offer short lead times at some of our production facilities, in some cases as little as 12-48 hours, these facilities must
operate at less than full capacity. However, if we do not receive as many quick-turn orders as we expect at these facilities and have foregone other production, we may underutilize our
manufacturing capacity.
We depend upon a relatively small number of customers for a large portion of our sales, and a decline in sales to major customers could harm our results of operations.
A small number of customers, which include PCB manufacturers and distributors, are responsible for a significant portion of our sales. While only one
of our customers accounted for more than 10% of our revenues in each of fiscal 2010, fiscal 2009 and fiscal 2008 and the six months ended July 2, 2011 and June 26, 2010, we believe that
our ten largest customers accounted for the majority of our revenues in each of these periods. Although we cannot assure you that our principal customers will continue to purchase our products at past
levels, we expect to continue to depend upon a relatively small number of customers for a significant portion of our sales. Our customer concentration could fluctuate, depending on future customer
requirements, which will depend in large part on conditions in the end-markets in which our customers operate. The loss of one or more significant customers or a decline in sales to our
significant customers could harm our business, results of operations, and financial condition and lead to declines in the trading price of our ordinary shares.
In
addition, during industry downturns, we may need to reduce prices and we may be unable to collect payments from our customers. There can be no assurance that key customers will not cancel orders,
or that
11
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Risk Factors
they
will continue to place orders with us in the future at the same levels as experienced by us in prior periods, or that they will be able to meet their payment obligations. This concentration of
customers may materially and adversely affect our operating results due to the loss or cancellation of business from any of these key customers, significant changes in scheduled deliveries to any of
these customers, or decreases in the prices of the products sold to any of these customers.
We sell on a purchase order basis and are subject to uncertainties and variability in demand by our customers that could decrease revenues and harm our operating results.
We sell to customers on a purchase order basis and not pursuant to long-term contracts. Customers may cancel their orders, reduce
production quantities or delay production at any time for a number of reasons. Many of our customers have, over the past several years, experienced significant decreases in demand for their products
and services. The uncertain economic conditions in the global economy and in several of the markets in which our customers operate have in the past prompted some of our customers to cancel orders,
delay the delivery of some of the products that we manufacture or order fewer products than we previously anticipated. Consequently, our sales are subject to short-term variability in
demand by our customers. In the past, we have been required to increase staffing and other expenses in order to meet the anticipated demand of our customers. The level and timing of orders placed by
our customers may vary due to:
–>
changes
in our customers' inventory levels;
–>
changes
in customers' manufacturing strategies;
–>
demand
fluctuations for our customers' products; and
–>
changes
in new product introductions.
Future
terminations, reductions, or delays in our customers' orders could harm our business, results of operations, and financial condition. Variability in demand from our customers may contribute to
fluctuations in our quarterly results, which may make our revenues more difficult to accurately forecast.
We depend on a small number of suppliers for the raw materials and certain components used to manufacture our products. If these suppliers fail to provide an adequate supply  of raw materials or components of sufficient
quality, or these suppliers become unavailable to us, we may experience significant delays in the manufacturing and shipping of our products to customers  and our business could suffer.
We depend on a small number of suppliers for the raw materials, including copper, resin and fiberglass, as well as certain components, used in the
manufacture of our products. These suppliers must comply with Isola's stringent specifications and technical requirements. Our reliance on these suppliers involves significant risks and uncertainties,
including whether they will provide an adequate supply of required raw materials or components of sufficient quality, will not increase prices for the raw materials or components and will perform
their obligations on a timely basis. If we are unable to obtain raw materials or components from third-party suppliers in the quantities and of the quality that we require on a timely basis and at
acceptable prices, we may not be able to deliver our products on a timely or cost-effective basis to our customers, which could cause customers to end their business with us, reduce our
gross profit and seriously harm our business, results of operations and financial condition. Moreover, if any of our suppliers becomes financially unstable, we may have to find new suppliers. It may
take several months to locate alternative suppliers, if required. We may experience significant delays in manufacturing and shipping our products to customers and incur additional development,
manufacturing and other costs to establish alternative sources of supply if we lose any of these sources. We cannot predict if we will be able to obtain replacement raw materials and components within
the time frames that we require at an affordable cost, or at all.
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Risk Factors
There may be shortages of, or price fluctuations with respect to, raw materials or components, which would cause us to curtail our manufacturing or incur higher than  expected costs.
We purchase the raw materials and certain components we use in producing our products, and we may be required to bear the risk of price fluctuations
of raw materials or components. Shortages of raw materials and price fluctuations have occurred in the past and may occur in the future. Copper prices have been particularly volatile in the last four
years, declining to less than $3,000 per ton in late 2008 and increasing to more than $10,000 per ton during the six months ended July 2, 2011. Although historically we have been able to pass
through a substantial portion of the raw material cost increases to our customers, we may not continue to be able to do so in the future if we experience significant supply disruptions or excess
levels of industry capacity or due to other factors outside of our control, in which case our profitability could suffer. Our ability to pass through raw material price increases may be limited by the
level of industry excess capacity, competitive practices and other regional-specific factors which are out of our control. In addition, if we experience a shortage of materials or components, we may
not be able to produce products for our customers in a timely fashion.
We are vulnerable to an increase in the cost of energy.
Our production processes require us to use substantial amounts of power. In the past several years, there has been a significant increase in global
energy prices. Changes in the cost or availability of energy resources, including oil, gas and electricity, are beyond our control and could materially increase our cost of operations. We maintain
only limited back-up power generation facilities at some of our manufacturing locations. In the event of a power shortage, we could be required to cease operations at an affected facility
until power is restored. There can be no assurance that our facilities will avoid material utility-based interruptions, which could have a material effect on our results of operations and financial
condition.
We may experience significant fluctuations in results of operations from period to period.
Our quarterly results may vary significantly depending on various factors, many of which are beyond our control. These factors include:
–>
the
volume of customer orders;
–>
changes
in demand for customers' and OEMs' products;
–>
pricing
and other competitive pressures;
–>
our
effectiveness in managing manufacturing processes;
–>
changes
in cost and availability of raw materials and labor;
–>
changes
in our product mix;
–>
changes
in political and economic conditions; and
–>
local
factors and events that may affect our production volume, such as local holidays.
Our
sales may, from time to time, shift from one quarter to the next, affecting anticipated results.
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Risk Factors
If demand for high-performance, higher margin products does not increase, our future gross margins and operating results may be worse than expected.
We typically earn lower gross margins on certain of our base, low-Tg products and higher gross margins on certain of our
high-performance laminate materials. We experience continued pressure from customers to reduce prices, and competition remains intense, particularly in Asia. This pricing pressure has
affected, and could continue to adversely affect, our gross margins. If demand for our high-performance, higher margin products does not increase in the future, our gross margins and
operating results may be worse than expected.
Our failure to respond timely or adequately to market changes may render our existing technology less competitive or obsolete, and our operating results may suffer.
The market for our products is characterized by continuing product development and changing technologies. The success of our business depends in part
upon our ability to maintain and enhance our technological capabilities, develop and market products and services that meet changing customer needs and successfully anticipate or respond to
technological product platform changes on a cost-effective and timely basis. There can be no assurance that we will effectively respond to the technological product requirements of the
changing market, including having sufficient cash flow to make additional capital expenditures that may be required as a result of those changes. To the extent we are unable to respond to such
technological product requirements, our operating results may suffer.
Our customers require our products to undergo a lengthy and expensive qualification process which does not assure follow-on product sales. If we are unsuccessful  or delayed in qualifying any of our products with a
customer, our business and operating results would suffer.
In general, OEMs require that our products undergo an extensive qualification process, which may involve testing of our products for
performance and reliability. This qualification process may continue for several months or even up to one year in certain cases. Moreover, qualification of a product by a customer does not assure any
sales of the product to that customer. After our products are qualified, it can take several months or more before the customer commences volume production of components or systems that incorporate
our products. Despite these uncertainties, we devote substantial resources, including design, engineering, sales, marketing and management efforts, to qualifying our products with customers in
anticipation of sales. If we are unsuccessful or delayed in qualifying any of our products with a customer, sales of those products to the customer may be precluded or delayed, which may impede our
growth and cause our business to suffer.
In
addition, we work closely with OEMs to develop products that are well suited to their changing needs. We will not recover the cost of this product development directly even if we are
actually engaged as a supplier to an OEM's product line, and there can be no guarantee that such collaborations will result in any sales of our products to such OEM.
Our products may contain design or manufacturing defects, which could result in reduced demand for our services and liability claims against us.
We manufacture products that are highly complex and need to meet increasingly demanding technical and quality requirements. These products may
contain design or manufacturing errors or failures, despite our quality control and quality assurance efforts. Defects in the products we manufacture, whether caused by a design, manufacturing, or
materials failure or error, may result in delayed shipments, customer dissatisfaction, a reduction or cancellation of purchase orders, or liability claims against us. If these defects occur frequently
or in large quantities, our reputation may be impaired. Although our invoices and sales
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Risk Factors
arrangements
contain provisions designed to limit our exposure to product liability and related claims, existing or future laws or unfavorable judicial decisions could negate these provisions. Product
liability
litigation against us, even if it were unsuccessful, would be time-consuming and costly to defend. We may not maintain technology errors and omissions insurance at any given time for all
or certain of our operations, and we may not be able to purchase such insurance coverage in the future on terms that are satisfactory to us, if at all. Moreover, such coverage may not be sufficient to
cover actual losses.
We face intense competition in the PCB materials industry, including from diversified manufacturers and suppliers, which could negatively impact our results of operations  and cause our market share to decline.
The PCB materials industry is intensely competitive, and we compete worldwide in the markets for such materials. Our principal competitors are
substantially larger and have greater financial resources than us, and our operating results may be affected by our ability to maintain our competitive positions in these markets. Some of our
competitors and potential competitors may have advantages over us, including:
–>
greater
financial and manufacturing resources that can be devoted to the development, production, and sale of their products;
–>
more
established and broader sales and marketing channels;
–>
manufacturing
facilities that are located in countries with lower production costs;
–>
more
manufacturing facilities worldwide, some of which are closer in proximity to PCB fabricators;
–>
lower
capacity utilization, which in peak market conditions can result in shorter lead times to customers;
–>
ability
to add additional capacity faster or more efficiently;
–>
preferred
vendor status with existing and potential customers;
–>
greater
name recognition; and
–>
larger
customer bases.
In
addition, these competitors may respond more quickly to new or emerging technologies, adapt more quickly to changes in customer requirements or devote greater resources to the development,
promotion, and sale of their products than we do.
Consolidation trends among our customers could adversely affect our business.
In recent years, a number of our customers have consolidated and further consolidation of customers may continue. If an existing customer is not the
controlling entity of the supply chain function following a consolidation, we may not be retained as a preferred or approved supplier. In addition, product duplication could result in the termination
of a product line that we currently support. While there is potential for increasing our position with the combined customer, our revenues may decrease if we are not retained as a supplier. We may
also be subject to increased pricing pressure from the combined customer because of its increased market share.
Our international sales and operations subject us to additional risks that could adversely affect our operating results.
We derive, and expect to continue to derive, a significant portion of our revenue from international sales in various Asian and European markets.
Moreover, we manufacture a significant portion of our products in
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manufacturing
facilities outside of the United States. Our international revenue and operations are subject to a number of material risks, including, but not limited to:
–>
difficulties
in staffing, managing and supporting operations in multiple countries;
–>
rising
costs of labor in certain countries;
–>
difficulties
in enforcing agreements and collecting receivables through foreign legal systems and other relevant legal issues;
–>
fewer
legal protections for intellectual property;
–>
foreign
and U.S. taxation issues and international trade barriers;
–>
difficulties
in obtaining any necessary governmental authorizations for the export of our products to certain foreign jurisdictions;
–>
potential
fluctuations in foreign economies;
–>
government
currency control and restrictions on repatriation of earnings;
–>
fluctuations
in the value of foreign currencies and interest rates;
–>
general
economic and political conditions in the markets in which we operate;
–>
domestic
and international economic or political changes, social unrest, hostilities and other disruptions in regions where we currently operate or may operate in
the future; and
–>
different
and changing legal and regulatory requirements in the jurisdictions in which we currently operate or may operate in the future.
Negative
developments in any of these areas in one or more countries could result in a reduction in demand for our products, the cancellation or delay of orders already placed, threats to our
intellectual property, difficulty in collecting receivables, and a higher cost of doing business, any of which could negatively impact our business, financial condition or results of operations.
Moreover, our sales, including sales to customers outside the United States, are primarily denominated in U.S. dollars, and downward fluctuations in the value of foreign currencies relative to the
U.S. dollar may make our products more expensive than other products, which could harm our business.
We
operate in countries that have experienced political unrest or instability or government controls over the conduct of business, including China and countries in Southeast Asia. Recently, in China,
labor disputes and strikes based partly on wages have slowed or stopped production at certain manufacturers. In some cases, employers have responded by significantly increasing the wages of workers at
such plants. In addition, regulatory authorities and others have increased their scrutiny of labor conditions in countries in which we operate. To the extent such developments result in more
burdensome labor laws and regulations or require us to increase the wages of employees, our ability to adequately staff our plants and the costs associated with the manufacture and shipping of our
products
in those jurisdictions could be adversely affected, which would have a material adverse effect on our business and operating results.
Our leverage and our debt service obligations may adversely affect our cash flow.
As of July 2, 2011, we had total indebtedness of approximately $543.9 million, and a stockholders' deficiency of $417.9 million.
After giving effect to the application of the proceeds from this offering (at an assumed initial public offering price of $             per share, the midpoint of the range set forth on
the cover
of this prospectus) and the proceeds of the new term loan we expect to enter into at the closing of this offering, as set forth in "Use of Proceeds", we expect our total indebtedness to be
$          million.
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Our indebtedness and resulting financial leverage could have significant negative consequences, including:
–>
increasing
our vulnerability to general adverse economic and industry conditions;
–>
requiring
the use of a substantial portion of our cash flow from operations to service our indebtedness, thereby reducing the amount of cash flow available for other
purposes, including capital expenditures;
–>
limiting
our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and
–>
placing
us at a possible competitive disadvantage to less leveraged competitors and competitors that have better access to capital resources.
Our
current credit agreements contain financial and operating covenants that limit our management's discretion with respect to certain business matters. Among other things, these covenants restrict
our ability and our subsidiaries' ability to incur additional debt, create liens or other encumbrances, make investments, change the nature of our business, sell or otherwise dispose of assets and
merge or consolidate with other entities. At the end of fiscal 2010, we were in compliance with these covenants. If we are not able to comply with all of these covenants, for any reason, some or all
of our outstanding debt could become immediately due and payable.
If we fail to protect, or incur significant costs in defending, our intellectual property and other proprietary rights, our business and results of operations could be  materially harmed.
Our success depends in part on our ability to protect our intellectual property and other proprietary rights. We rely primarily on patents,
trademarks, copyrights, trade secrets and unfair competition laws to protect our intellectual property and other proprietary rights. Significant technology used in our products, however, is not the
subject of any patent protection, and we may be unable to obtain patent protection on such technology in the future. Moreover, existing U.S. legal standards relating to the validity, enforceability
and scope of protection of intellectual property rights offer only limited protection, may not provide us with any competitive advantages, and may be challenged by third parties. In addition, the laws
of foreign countries in which we manufacture and market our products may afford little or no effective protection of our intellectual property. Accordingly, despite our efforts, we may be unable to
prevent third parties from infringing upon or misappropriating our intellectual property or otherwise gaining access to our technology. In addition to the legal methods that we use to protect our
intellectual property described above, we may elect to manufacture certain of our products in the United States, where manufacturing costs are higher, in order to better protect our intellectual
property. Unauthorized third parties may try to copy or reverse engineer our products or portions of our products or otherwise obtain and use our intellectual property. This could result in third
parties manufacturing and selling competitive products that employ our technologies. If we fail to protect our intellectual property and other proprietary rights, our business, results of operations
or financial condition could be materially harmed.
In
addition, defending our intellectual property rights may entail significant expense. We have, from time to time, resorted to legal proceedings to protect our intellectual property and may continue
to do so in the future. Any of our intellectual property rights may be challenged by others or invalidated through administrative processes or litigation. If we resort to legal proceedings to enforce
our intellectual property rights or to determine the validity and scope of the intellectual property or other proprietary rights of others, the proceedings could result in significant expense to us
and divert the attention and efforts of our management and technical employees, even if we were to prevail. If unsuccessful, these efforts could also result in the limitation or invalidation of the
intellectual property rights we sought to enforce. Finally, during the course of any patent litigation, there may be public announcements of the results of hearings,
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motions,
and other interim proceedings or developments in the litigation. If securities analysts or investors regard these announcements as negative, the market price of our ordinary shares may
decline. General proclamations or statements by key public figures may also have a negative impact on the perceived value of our intellectual property.
We may be sued by third parties for alleged infringement of their proprietary rights, which could be costly, time-consuming to defend and limit our ability to  use certain technologies in the future.
Because our competitors and others actively seek patent protections, we may in the future be subject to claims that our technologies infringe upon
third parties' intellectual property or other proprietary rights. In addition, the vendors from which we license technology used in our products or our customers could become subject to similar
infringement claims. Any claims, with or without merit, could be time-consuming and expensive to defend, and could divert our management's attention away from the execution of our business
plan. Moreover, any settlement or adverse judgment resulting from the claim could require us to pay substantial amounts or obtain a license to continue to use the technology that is the subject of the
claim, or otherwise restrict or prohibit our use of the technology. There can be no assurance that we would be able to obtain a license from the third party asserting the claim on commercially
reasonable terms, or at all; that we would be able to develop alternative technology on a timely basis, if at all; or that we would be able to obtain a license to use a suitable alternative technology
to permit us to continue offering, and our customers to continue using, our affected product. In addition, we may be required to indemnify our vendors or customers for third-party intellectual
property infringement claims, which would increase the cost to us of an adverse ruling in such a claim. An adverse determination could also prevent us from offering our products to others.
Infringement claims asserted against us or our vendors or customers may have a material adverse effect on our business, results of operations or financial condition.
Our confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.
We rely substantially upon proprietary information, trade secrets and know-how to conduct our manufacturing operations and research and
development activities. We take steps to protect our proprietary rights and information, including the use of confidentiality and other agreements with our employees and consultants and in our
commercial relationships, including with distributors and customers. However, these steps may be inadequate. Confidentiality agreements used in some of our commercial relationships expire after a
stated term. Moreover, our confidentiality agreements may be violated, and there may be no adequate remedy available for any such violation. We cannot assure you that our proprietary information will
be kept confidential or that we can meaningfully protect our trade secrets. Our competitors may independently develop substantially equivalent proprietary information or may otherwise gain access to
our trade secrets, which could adversely affect our ability to compete in the market.
We depend on the experience and expertise of our senior management team and key technical employees, and the loss of any key employee may impair our ability to operate  effectively.
Our success depends upon the continued services of our senior management team and key technical employees, particularly in our research and
development department. Each of our executive officers, key technical personnel and other employees could terminate his or her relationship with us at any time. The loss of any member of our senior
management team might significantly delay or prevent the achievement of our business objectives and could materially harm our business and customer relationships. In addition, because of the highly
technical nature of our business, the loss of any significant number of our existing
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engineering
and project management personnel could have a material adverse effect on our business and operating results.
Furthermore,
our manufacturing process requires a skilled labor force. Although we are not generally dependent on any one employee or a small number of employees involved in our manufacturing process,
we have in the past experienced periods of high employee turnover and may in the future experience significantly high employee turnover at our Asian facilities. If we are not able to replace these
people with new employees with comparable capabilities, our operations could suffer as we may be unable to keep up with innovations in the industry or the demands of our customers. As a result, we may
not be able to continue to compete effectively.
Unfavorable tax law changes, unfavorable government reviews of our tax returns, changes in our geographical earnings mix, or imposition of withholding taxes on repatriated  earnings could adversely affect our effective
tax rate and our operating results.
Our operations are subject to income and transaction taxes in the United States and other jurisdictions. A change in the tax laws in the
jurisdictions in which we do business, including an increase in tax rates or an adverse change in the treatment of an item of income or expense, could result in a material increase in the amount of
taxes we incur. In particular, proposals have been made to change certain U.S. tax laws relating to foreign entities with U.S. connections. Legislation has been proposed that would require treating
certain foreign corporations as U.S. domestic corporations (and therefore taxable on all of their worldwide income) if the management and control
of the foreign corporation occurs, directly or indirectly, primarily within the United States. In addition, the U.S. government has proposed various other changes to the U.S. international tax system,
certain of which could adversely impact foreign-based multinational corporate groups, and increased enforcement of U.S. international tax laws. Although these U.S. tax law changes may not be enacted
in their current forms, it is possible that these or other changes in the U.S. tax laws could significantly increase our U.S. income tax liability in the future.
We
are subject to periodic audits or other reviews by tax authorities in the jurisdictions in which we conduct our activities. Audits can result in increased tax payments, penalties and interest,
which would affect our results of operation and cash position.
Because
we conduct operations in multiple jurisdictions, our effective tax rate is influenced by the amounts of income and expense attributed to each such jurisdiction. If such amounts were to change
so as to increase the amounts of our net income subject to taxation in higher-tax jurisdictions, or if we were to commence operations in jurisdictions assessing relatively higher tax
rates, our effective tax rate could be adversely affected.
In
addition, we may determine that it is advisable from time to time to repatriate earnings from subsidiaries, under circumstances which could give rise to the imposition of potentially significant
withholding taxes by the jurisdictions in which such amounts were earned, without our receiving the benefit of any offsetting tax credits, which also could adversely impact our effective tax rate.
We are subject to risks of currency fluctuations.
A portion of our cash and other current assets is held in currencies other than the U.S. dollar. As of the end of fiscal 2010, we had approximately
$36.7 million of current assets held by subsidiaries with a functional currency other than the U.S. dollar. Changes in exchange rates among other currencies and the U.S. dollar will affect the
value of these assets as translated to U.S. dollars in our balance sheet. To the extent that we ultimately decide to repatriate some portion of these funds to the United States, the actual value
transferred could be impacted by movements in exchange rates. Any such type of movement could negatively impact the
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amount
of cash available to fund operations or to repay debt. Significant inflation or disproportionate changes in foreign exchange rates could occur as a result of general economic conditions, acts
of war or terrorism, changes in governmental monetary or tax policy, or changes in local interest rates. The impact of future exchange rate fluctuations between the U.S. dollar and other currencies
cannot be predicted. To the extent that we may have outstanding indebtedness denominated in other currencies,
the appreciation of other currencies against the U.S. dollar will have an adverse impact on our financial condition and results of operations.
Our failure to comply with the requirements of environmental laws could result in litigation, fines and revocation of permits necessary to our manufacturing processes.
Our operations are regulated under a number of international, federal, state, local, and foreign environmental and safety laws and regulations that
govern, among other things, the discharge of hazardous materials into the air and water, as well as the handling, storage, and disposal of such materials. Because we use hazardous materials and
generate hazardous wastes in our manufacturing processes, we may be subject to potential financial liability for costs associated with the investigation and remediation of our own sites, or sites at
which we have arranged for the disposal of hazardous wastes, if such sites become contaminated. Even if we fully comply with applicable environmental laws and are not directly at fault for the
contamination, we may still be liable.
Any
material violations of environmental laws or failure to maintain required environmental permits could subject us to fines, penalties, and other sanctions, including the revocation of our effluent
discharge permits, which could require us to cease or limit production at one or more of our facilities, and harm our business, results of operations, and financial condition. Even if we ultimately
prevail, environmental lawsuits against us would be time consuming and costly to defend.
Environmental
laws could become more stringent over time, imposing greater compliance costs and increasing risks and penalties associated with violation. We operate in environmentally sensitive
locations, and we are subject to potentially conflicting and changing regulatory agendas of political, business, and environmental groups. We are increasingly required to certify compliance with
various material content restrictions in our products based on laws of various jurisdictions or territories such as the Restriction of Hazardous Substances ("RoHS") and Registration, Evaluation,
Authorization and Restriction of Chemicals ("REACH") directives in the European Union and China's RoHS legislation. In addition, our customers or the OEMs they supply may adopt more stringent
environmental requirements for their products in response to political or social pressure. Changes or restrictions on discharge limits, emissions levels, material storage, handling or disposal or
increasingly stringent certification requirements might require a high level of unplanned capital investment or facility or materials relocation. It is possible that environmental compliance costs and
penalties from new or existing regulations may harm our business, results of operations, and financial condition. See "Management's Discussion and Analysis of Financial Condition and Results of
Operations—Legal Proceedings".
Our business and operations could be adversely impacted by climate change initiatives.
Our manufacturing processes require that we purchase significant quantities of energy from third parties, which results in the generation of
greenhouse gasses, either directly on-site or indirectly at electric utilities. Both domestic and international legislation to address climate change by reducing greenhouse gas emissions
and establishing a price on carbon could create increases in energy costs and price volatility. Considerable international attention is now focused on development of an international policy framework
to guide international action to address climate change. Proposed and existing legislative efforts to control or limit greenhouse gas emissions could affect our energy source and supply choices as
well as increase the cost of energy and raw materials derived from sources that generate greenhouse gas emissions.
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Damage to our manufacturing facilities due to fire, natural disaster, or other events could harm our financial results.
We have manufacturing facilities in the United States in Arizona, California and South Carolina. We also have manufacturing facilities in Germany,
Italy, China, Singapore, Malaysia and Taiwan. The destruction or closure of any of our facilities for a significant period of time as a result of fire, explosion, blizzard, act of war or terrorism,
flood, tornado, earthquake, lightning, or other natural disaster could harm us financially, increasing our costs of doing business and limiting our ability to deliver our products on a timely basis.
We may engage in future acquisitions or dispositions that could disrupt our business, cause dilution to our shareholders or adversely impact our financial condition and  operating results.
In the future we may acquire companies or assets of companies or dispose of portions of our business in order to enhance our market position or
strategic strengths. We are not currently a party to any agreements or commitments, and we have no understandings with respect to any such acquisitions or dispositions. We may not be able to find
suitable acquisition candidates, and we may not be able to complete acquisitions or dispositions on favorable terms, if at all, even after devoting substantial resources to them. If we do complete
acquisitions or dispositions, we cannot be sure that they will ultimately strengthen our competitive position or that they will not be viewed negatively by customers, financial markets, or investors.
In addition, any acquisitions that we make could lead to difficulties in integrating personnel and operations from the acquired businesses and in retaining and motivating key personnel from these
businesses. Acquisitions or dispositions may disrupt our ongoing operations, divert management from day-to-day responsibilities, increase our expenses, and adversely impact our
operating results or financial condition. Future acquisitions may reduce our cash available for operations and other uses and could result in an increase in amortization expense related to
finite-lived intangible assets acquired, potentially dilutive issuances of equity securities, or the incurrence of debt, any of which could adversely affect our financial condition and operating
results.
We will incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance  initiatives.
We have never operated as a public company. As a public company, we will incur significant legal, accounting and other expenses that we did not incur
as a private company. In preparation for our initial public offering, we have increased our personnel devoted to legal, accounting and human resources matters and have implemented additional
procedures to improve compliance and effectiveness in these functional areas. In addition, the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act of 2010, and rules subsequently implemented
and yet to be implemented by the Securities and Exchange Commission and Nasdaq have imposed and will impose various new requirements on public companies, including requiring changes in corporate
governance practices. Our management and other personnel will need to devote a substantial amount of time to these new compliance initiatives. Moreover, these rules and regulations will increase our
legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect these new rules and regulations to make it more difficult and more
expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage.
In
addition, the Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, we must
perform system and process evaluation and testing of our internal control over financial reporting to allow management and our independent registered public accounting firm to report on the
effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. Compliance
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will
require us to increase our general and administrative expense in order to pay added compliance personnel, outside legal counsel and public accountants to assist us in, among other things,
external reporting, instituting and monitoring a more comprehensive compliance function and board governance function, establishing and maintaining internal controls over financial reporting in
accordance with Section 404 of the Sarbanes-Oxley Act, and preparing and distributing periodic public reports in compliance with our obligations under the U.S. federal securities laws. We
currently do not have an internal audit group, and we will evaluate the need to hire additional accounting and financial staff with appropriate public company experience and technical accounting
knowledge. Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner, the market price of our stock could decline and we could be subject to sanctions or
investigations by Nasdaq, the Securities and Exchange Commission or other regulatory authorities, which would require additional financial and management resources.
We have identified a material weakness in our internal control over financial reporting. If we fail to develop or maintain an effective system of internal controls, we may  not be able to accurately report our financial
results or prevent fraud. As a result, current and potential shareholders could lose confidence in our financial reporting, which would harm our business  and the trading price of our stock.
During the preparation of our consolidated financial statements for fiscal 2010, we and our independent registered public accounting firm identified
deficiencies in our internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board. These internal control deficiencies resulted in
material adjustments to our previously issued consolidated financial statements for fiscal 2004 through 2009, as well as to our consolidated financial statements for fiscal 2010 that were subsequently
issued, and affected the periods covered by such statements. Management determined the control deficiencies constitute a material weakness in our internal control over financial reporting. See
"Management's Discussion and Analysis of Financial Condition and Results of Operations—Internal Control Over Financial Reporting".
We
are in the process of remediating the material weakness, but we have not yet been able to complete our remediation efforts. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations—Internal Control Over Financial Reporting". It will take additional time to design, implement and test the controls and procedures required to enable our management
to conclude that our internal control over financial reporting is effective. We cannot at this time estimate how long it will take to complete our remediation efforts or the cost of those efforts. We
cannot assure you that measures we plan to take will be effective in mitigating or preventing significant deficiencies or material weaknesses in our internal control over financial reporting. Any
failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could result in additional material weaknesses or cause us to fail to meet
our periodic reporting obligations. Beginning with our Annual Report on Form 10-K for our 2012 fiscal year ending December 29, 2012 (to be filed in early 2013) when the SEC's
rules under Section 404 of Sarbanes-Oxley become applicable to us, such a failure could also result in a conclusion that our internal controls over financial reporting were not effective. The
existence of a material weakness could result in errors in our financial statements that could result in further restatements of our financial statements, cause us to fail to meet our reporting
obligations and cause investors to lose confidence in our reported financial information, leading to a decline in the trading price of our stock.
We are subject to the Foreign Corrupt Practices Act ("FCPA"). A determination that we violated this act may affect our business and operations adversely.
We are subject to the regulations imposed by the FCPA, which generally prohibits companies that are publicly listed in the U.S. and their
intermediaries from making improper payments to foreign officials for
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the
purpose of obtaining or keeping business. In connection with our initial public offering, we are implementing policies and procedures to train our personnel in FCPA compliance matters. Any
determination that we have violated the FCPA could have a material adverse effect on our financial position, operating results and cash flows.
RISKS RELATED TO THIS OFFERING AND OWNERSHIP OF OUR ORDINARY SHARES
We are controlled by the Sponsors, whose interests may not be aligned with yours.
Prior to the completion of this offering, the Sponsors own, directly or indirectly,         % of our outstanding ordinary shares. After giving
effect to this offering, assuming an offering of                  ordinary shares, the Sponsors will control, directly or indirectly,
approximately         % of our ordinary shares, assuming no
exercise of the underwriters' option to purchase additional shares. In addition, at the completion of this offering, we will enter into a shareholders agreement with our Sponsors that will give each
of TPG Capital and Oaktree the right to nominate representatives to our board of directors, and require all of our Sponsors to vote for the election of these nominees to our board of directors, so
long as TPG Capital and Oaktree own specified percentages of our outstanding voting securities. See "Certain Relationships and Related Party Transactions—Agreements with Our
Sponsors—Shareholders and Registration Rights Agreement". As a result, the Sponsors will continue to be able to control the election of our directors, determine our corporate and
management policies and determine, without the consent of our other shareholders, the outcome of any corporate transaction or other matter submitted to our shareholders for approval, including
potential mergers or acquisitions, asset sales and other significant corporate transactions. The Sponsors will also have sufficient voting power to amend our organizational documents. The interests of
the Sponsors may not coincide with the interests of other holders of our ordinary shares.
Furthermore,
each of the Sponsors is in the business of making investments in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with
us. The Sponsors may also pursue, for their own accounts, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to
us. Our memorandum and articles of association do not prohibit the Sponsors, or any of their respective officers, directors, agents, employees, shareholders, members, partners, affiliates and
subsidiaries, or any of our directors, from acquiring an interest or expectancy in corporate opportunities, and do not impose upon such persons or entities any duty to disclose such potential
corporate opportunities to us or refrain from competing with us, even if such opportunities are ones we or our subsidiaries might reasonably be deemed to have pursued or had the desire to pursue.
Furthermore, such persons or entities may take such corporate opportunities for themselves or offer them to other persons or entities. Our Sponsors may also consider combining our operations with
those of another company. So long as the Sponsors continue to own a significant amount of our outstanding ordinary shares, they will continue to be able to strongly influence or effectively control
our decisions, including potential mergers or acquisitions, asset sales and other significant corporate transactions.
We will be a "controlled company" within the meaning of Nasdaq rules and, as a result, will qualify for and will rely on exemptions from certain corporate governance  requirements.
After completion of this offering, the Sponsors will continue to control a majority of the voting power of our outstanding ordinary shares. As a
result, we will be a "controlled company" within the meaning of the corporate governance standards of Nasdaq. Under Nasdaq rules, a company of which more than 50% of the voting power is held by a
person or group of persons acting together is a "controlled company" and may
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elect
not to comply with certain corporate governance requirements of Nasdaq, including the requirements that:
–>
a
majority of the board of directors consist of independent directors;
–>
the
nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee's purpose and
responsibilities;
–>
the
compensation committee be composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and
–>
there
be an annual performance evaluation of the nominating and corporate governance and compensation committees.
We
have adopted charters for our audit, nominating and corporate governance and compensation committees, intend to conduct annual performance evaluations for these committees, and initially expect all
of our committee members and a majority of our board of directors to be considered independent directors under the independence criteria of Nasdaq. Although we intend to comply with these listing
requirements whether or not we are a controlled company, there is no guarantee that we
will not take advantage of the exemptions available to "controlled companies" in the future. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject
to all of the corporate governance requirements of Nasdaq.
Shareholder rights under Cayman Islands law may differ materially from shareholder rights in the United States, which could adversely affect the ability of us and our  shareholders to protect our and their interests.
We are a company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association,
by the Companies Law (2010 Revision) of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders
and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law in the Cayman Islands is
derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority but are not binding on
a court in the Cayman Islands. In particular, some states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate laws. Moreover, we could be involved in a
corporate combination in which dissenting shareholders would have no rights comparable to appraisal rights which would otherwise ordinarily be available to dissenting shareholders of United States
corporations. Also, our Cayman Islands counsel is not aware of a significant number of reported class actions or derivative actions having been brought in Cayman Islands courts. Such actions are
ordinarily available in respect of United States corporations in U.S. courts. Finally, Cayman Islands companies may not have standing to initiate shareholder derivative action before the federal
courts of the United States. As a result, our public shareholders may face different considerations in protecting their interests in actions against the management, directors or the Sponsors than
would shareholders of a corporation incorporated in a jurisdiction in the United States, and our ability to protect our interests may be limited if we are harmed in a manner that would otherwise
enable us to sue in a United States federal court. See "Description of Share Capital—Differences in Corporate Law".
24
Table of Contents
Risk Factors
Certain provisions of our charter documents could discourage, delay or prevent a merger or acquisition at a premium price.
Our memorandum and articles of association will contain provisions that:
–>
permit
us to issue, without any further vote or action by our shareholders, 25,000,000 preferred shares in one or more series and, with respect to each series, to
fix the number of shares constituting the series and the designation of the series, the voting powers (if any) of the shares of such series, and the preferences and other special rights, if any, and
any qualifications, limitations or restrictions, of the shares of the series; and
–>
at
such time as we are no longer a "controlled company", will allow our board of directors to establish a classified board, and limit the ability of shareholders to
call extraordinary general meetings or act by written consent in lieu of a meeting (we believe that such action by written consent would be impractical after the consummation of this offering, even
while we are a "controlled company," because it requires unanimous shareholder approval under the laws of the Cayman Islands).
The
foregoing provisions may impose various impediments to the ability of a third party to acquire control of us, even if a change in control would be beneficial to our existing shareholders.
As a holder of the ordinary shares, you may have difficulty obtaining or enforcing a judgment against us because we are incorporated under the laws of the Cayman Islands.
Because we are a Cayman Islands company, there is uncertainty as to whether the Grand Court of the Cayman Islands would recognize or enforce
judgments of United States courts obtained against us predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original
actions brought in the Cayman Islands against us predicated upon the securities laws of the United States or any state thereof.
An active trading market for our ordinary shares may not develop, and you may not be able to sell your ordinary shares at or above the initial public offering price.
Prior to this offering, there has been no public market for our ordinary shares. Although we have applied to have our ordinary shares quoted on the
Nasdaq Global Market, an active trading market for our ordinary shares may never develop or be sustained following this offering. If no trading market develops, securities analysts may not initiate or
maintain research coverage of our Company, which could further depress the market for our ordinary shares. As a result, investors may not be able to sell their ordinary shares at or above the initial
public offering price or at the time that they would like to sell.
If equity research analysts do not publish research or reports about our business or if they issue unfavorable commentary or downgrade our ordinary shares, the price of our  ordinary shares could decline.
The trading market for our ordinary shares will rely in part on the research and reports that equity research analysts publish about us and our
business. We do not control these analysts. The price of our stock could decline if one or more equity analysts downgrade our stock or if those analysts issue other unfavorable commentary or cease
publishing reports about us or our business.
25
Table of Contents
Risk Factors
The market price of our ordinary shares may be volatile, which could result in substantial losses for investors purchasing shares in this offering.
The initial public offering price for our ordinary shares will be determined through negotiations with the underwriters. This initial public offering
price may vary from the market price of our ordinary shares after the offering. Some of the factors that may cause the market price of our ordinary shares to fluctuate include:
–>
the
failure of securities analysts to cover our ordinary shares after this offering, or changes in financial estimates or recommendations by analysts;
–>
actual
or anticipated variations in our or our competitors' operating results;
–>
failure
by us or our competitors to meet analysts' projections or guidance that we or our competitors may give the market;
–>
volatility
in our operating performance;
–>
future
sales of our ordinary shares;
–>
investor
perceptions of us and the industry;
–>
the
public's reaction to our press releases, our other public announcements and our filings with the Securities and Exchange Commission;
–>
general
economic conditions; and
–>
the
other factors described elsewhere in these "Risk Factors".
In
addition, if the market for stocks of companies in our industry or the stock market in general experiences a loss of investor confidence, the trading price of our ordinary shares could decline for
reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to class action lawsuits that,
even if unsuccessful, could be costly to defend and a distraction to management.
We may not be able to obtain capital when desired on favorable terms, if at all, or without dilution to our shareholders.
We anticipate that the net proceeds of this offering, together with current cash, cash equivalents, cash provided by operating activities and funds
available from our new senior secured credit facility that we expect to enter into concurrent with this offering, including a $          million senior secured term loan with a
$          million senior secured revolving credit facility, will be sufficient to meet our current and anticipated needs for general corporate purposes. It is possible, however, that we
may not generate sufficient cash flow from operations or otherwise have the capital resources to meet our future capital needs, refinance our indebtedness or take advantage of acquisition
opportunities. If this occurs, we may need additional financing to execute on our current or future business strategies, including to:
–>
hire
additional engineers and other personnel;
–>
develop
new or enhance existing products;
–>
enhance
our operating infrastructure;
–>
acquire
complementary businesses or technologies; or
–>
otherwise
respond to competitive pressures.
If
we raise additional funds through the issuance of convertible debt or equity securities, the percentage ownership of our shareholders could be significantly diluted, and these newly issued
securities may have
26
Table of Contents
Risk Factors
rights,
preferences or privileges senior to those of existing shareholders, including those acquiring shares in this offering. We cannot assure you that additional financing will be available on terms
favorable to us, or at all. If adequate funds are not available or are not available on acceptable terms, if and when needed, our ability to fund our operations, take advantage of unanticipated
opportunities, develop or enhance our products, or otherwise respond to competitive pressures would be significantly limited.
A significant portion of our total outstanding shares may be sold into the public market in the near future, which could cause the market price of our ordinary shares to  drop significantly, even if our business is doing
well.
Sales of a substantial number of our ordinary shares in the public market could occur at any time after the expiration of the lock-up
agreements described in "Underwriters". These sales, or the market perception that the holders of a large number of shares intend to sell shares, could reduce the market price of our ordinary shares.
After this offering, we will have                  ordinary shares outstanding based on the number of shares outstanding as
of                           , 2011. This includes
the                  shares that we
are selling in this offering, which may be resold in the public market immediately. The remaining                  shares,
or         % of our outstanding shares after this offering, will be able
to be sold, subject to any applicable volume limitations under U.S. federal securities laws, in the near future as set forth below.
In
addition, the Sponsors have certain registration rights, which they may exercise in order to sell their shares through a registration statement filed by us on their behalf. For more information,
see "Certain Relationships and Related Party Transactions—Agreements with Our Sponsors—Shareholders and Registration Rights Agreement".
We plan to offer stock awards, which have the potential to dilute shareholder value and cause the price of our ordinary shares to decline.
We expect to offer stock awards to our directors, officers and employees, some of which may be vested at the time of this offering. If the stock
awards are vested and exercised, and those shares are sold into the public market, the market price of our ordinary shares may decline. In addition, the availability of ordinary shares for award under
any equity incentive plan that we adopt, or the grant of stock awards, may adversely affect the market price of our ordinary shares.
If you purchase ordinary shares sold in this offering, you will experience immediate and substantial dilution because our existing holders of ordinary shares paid  substantially less than the initial public offering price
for your shares.
You will experience immediate and substantial dilution of $         in pro forma net tangible book value per share because the price that you
pay will be substantially greater than the net tangible book value per share of the shares you acquire, based on the net tangible book value per share as
of                           , 2011. This dilution is due
in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their shares.
We do not currently intend to pay dividends on our ordinary shares and, consequently, your ability to achieve a return on your investment will depend on appreciation in the  price of our ordinary shares.
Isola Group Ltd. has never declared or paid any cash dividends on its ordinary shares. We currently intend to invest our future earnings, if
any, to fund our growth and do not anticipate paying cash dividends on our ordinary shares in the future. In addition, the instruments currently governing our indebtedness contain covenants that place
limitations on the amount of dividends we may pay. Therefore, you are not likely to receive any dividends on your ordinary shares for the foreseeable future.
27
Table of Contents
Forward-looking Statements
This prospectus contains "forward-looking statements". All statements other than statements of historical fact are "forward-looking"
statements for purposes of the U.S. federal and state securities laws. These statements may be identified by the use of forward-looking terminology such as "anticipate", "believe", "continue",
"could", "estimate", "expect", "intend", "may", "might", "plan", "potential", "predict", "should" or "will" or the negative thereof or other variations thereon or comparable terminology. In
particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance contained in this prospectus under the headings "Prospectus Summary", "Risk
Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" are forward-looking statements.
We
have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are
reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors,
including those discussed in this prospectus under the headings "Prospectus Summary", "Risk Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and
"Business", may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking
statements. Some of the key factors that could cause actual results to differ from our expectations include:
–>
adverse
developments in the global economy;
–>
our
dependence on growth in our customers' businesses;
–>
our
ability to remain competitive in the markets we serve;
–>
our
inability to continue to develop, manufacture and market innovative, customized products and services that meet customers' requirements for performance and
reliability;
–>
any
failure of our suppliers to provide us with raw materials;
–>
termination
of our key contracts, including technology license agreements, or loss of our key customers;
–>
our
inability to protect our intellectual property;
–>
our
failure to realize anticipated benefits from completed acquisitions, divestitures or restructurings, or the possibility that such acquisitions, divestitures or
restructurings could adversely affect us;
–>
the
loss of key employees;
–>
our
exposure to foreign currency exchange rate risks;
–>
terrorist
acts or acts of war; and
–>
other
risks and uncertainties, including those listed under the caption "Risk Factors".
Given
these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this prospectus are made only as of
the date hereof. We undertake no obligation to update or revise any forward-looking statements, either to reflect new developments, or for any other reason, except as required by law.
28
Table of Contents
Use of Proceeds
We estimate that our net proceeds from this offering, after deducting underwriting discounts and estimated offering expenses, will be
approximately $              million, assuming the shares are offered at $             per ordinary share, which is
the midpoint of the estimated offering range set forth on the cover page
of this prospectus.
We
intend to use the net proceeds as follows:
–>
$              million
of the net proceeds will be used to prepay $              million in aggregate principal amount of indebtedness under our
existing senior secured credit agreement, at a redemption price of 100% plus interest to the prepayment date; and
–>
$              million
of the net proceeds will be used to prepay $              million in aggregate principal amount of indebtedness under our
mezzanine credit agreement, at a redemption price of 100% plus interest to the prepayment date.
As
of July 2, 2011, we had $210.0 million aggregate principal amount of secured term loans outstanding under our senior credit agreement which currently bear interest at a rate of 10%
per annum and mature on September 30, 2015, and $185.7 million aggregate principal amount of unsecured loans outstanding under our mezzanine credit agreement which currently bear
interest at a rate of 16% per annum and mature on March 24, 2016.
After
application of the proceeds of this offering, the remaining balances of the loans under the senior and mezzanine credit agreements will be repaid with borrowings under a new senior secured
credit facility, which we intend to enter into concurrently with the completion of this offering.
The
following table summarizes the estimated sources and uses of proceeds in connection with the sale of ordinary shares by us and borrowings under our new senior secured credit facility consisting of
a $              million senior secured term loan and a $          million senior secured revolving credit facility, assuming this
offering and the refinancing had occurred on
July 2, 2011. You should read the following together with the information set forth under "Prospectus Summary—Concurrent Transactions".
Sources
Amount
(dollars in millions)
Ordinary shares offered hereby
$
New senior secured credit facility
Total Sources
$
Uses
Amount
(dollars in millions)
Repay existing secured term loans
$
Repay existing unsecured term loans
Total Uses
$
29
Table of Contents
Dilution
Dilution represents the difference between the amount per share paid by investors in this offering and the as adjusted net tangible
book value per share of our ordinary shares immediately after this offering.
Our
net tangible book value as of                           , 2011 was a surplus of
$              million, or $             per ordinary share. Net tangible book value per share represents the
amount of our total tangible assets less total liabilities, divided by the number of ordinary shares outstanding.
After
giving effect to our receipt of the estimated net proceeds from our sale of ordinary shares in this offering, and after deducting the underwriting discounts and commissions and other estimated
offering expenses payable by us, our net tangible book value, as adjusted, as of                           , 2011
would have been $              million, or $             per ordinary share. This
represents an immediate increase in net tangible book value of $             per common share to our existing shareholders and an immediate dilution of
$             per share to new investors
purchasing our ordinary shares in this offering. The following table illustrates this per share dilution to the later investors:
Initial public offering price per share
$
Pro forma net tangible book value per share as
of                           , 2011
Increase per share attributable to investors purchasing our ordinary shares in this offering
As adjusted net tangible book value per share after this offering
Dilution in net tangible book value per share to new investors purchasing our ordinary shares in this offering
$
The following table summarizes, as of                           , 2011, the number of shares
purchased from us, the total consideration paid or to be paid to us, and the
average price per share paid or to be paid to us by existing shareholders and new investors purchasing our ordinary shares in this offering at an assumed offering price of
$             per share,
which is the midpoint of the price range listed on the cover page of this prospectus, before deducting underwriting discounts and commissions and estimated offering expenses payable by us. As the
table shows, new investors purchasing shares in this offering will pay an average price per share substantially higher than our existing shareholders paid.
Shares purchased
Total consideration
Average price
per share
Number
Percent
Amount
Percent
Existing shareholders
%
%
$
New investors
Total
100
%
100
%
A $1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) the total consideration paid by
new investors by $              million and increase (decrease) the percent of total consideration paid by new investors by         %
assuming that the number of shares offered by us,
as set forth on the cover of this prospectus, remains the same.
The
number of ordinary shares to be outstanding after this offering is based on                           ordinary
shares outstanding as of                           , 2011. Except as otherwise indicated, the discussion
and tables above assume no exercise of the underwriters' option to purchase additional shares, and no exercise of any of our outstanding stock awards. If the underwriters' option to purchase
additional shares is exercised in full, the number of ordinary shares held by existing shareholders will be reduced to         % of the total
30
Table of Contents
Dilution
number
of ordinary shares to be outstanding upon completion of this offering which would be increased
to                           shares, or         %, of the total number
of ordinary shares to be
outstanding upon completion of this offering.
In
addition, effective immediately upon the signing of the underwriting agreement for this offering, an aggregate
of                           of our ordinary shares will be reserved for issuance under our 2011
Equity Incentive Plan. To the extent that any of our outstanding stock awards are exercised, new options are issued under our 2011 Equity Incentive Plan or we issue additional ordinary shares or other
equity securities in the future, there will be further dilution to investors participating in this offering. Furthermore, we may choose to raise additional capital through the sale of equity or
convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
31
Table of Contents
Dividend Policy
Isola Group Ltd. has never declared or paid any cash dividends on its ordinary shares. We currently intend to retain earnings,
if any, to finance the development and growth of our business and do not anticipate paying cash dividends on our ordinary shares in the future. Our payment of any future dividends is restricted by our
current credit agreements. The declaration and payment of dividends also is subject to the discretion of our board of directors and depends on various factors, including our net income, financial
condition, cash requirements, future prospects and other factors deemed relevant by our board of directors.
In
addition, under the Companies Law of the Cayman Islands, our board of directors may declare dividends only out of our accumulated net profits, out of share premium, provided that immediately
following the date on which the dividend is to be paid we can pay our debts as they come due in the ordinary course of business, or (subject to the same solvency test as applies to payments from
premium) out of any distributable capital reserve resulting from contributed surplus paid in to us.
32
Table of Contents
Capitalization
Prior to this offering, a substantial amount of the investment in Isola is represented by convertible preferred certificates issued
by Isola's current Luxembourg Holding Company to the Sponsor Limited Partnership, which is controlled by our Sponsors. Immediately prior to this offering, we will reorganize as Isola
Group Ltd., a Cayman Islands company, and all of the outstanding securities of the Luxembourg Holding Company, including the common shares and these convertible preferred certificates, will be
effectively converted into ordinary shares of Isola Group Ltd., as described in "Concurrent Transactions—Corporate Reorganization" (the "Corporate Reorganization and Conversion").
The
following table sets forth both our cash and cash equivalents and our capitalization as of July 2, 2011:
–>
on
an actual basis;
–>
on
a pro forma basis to give effect to the Corporate Reorganization and Conversion;
–>
on
a pro forma as adjusted basis to give effect to:
–>
the
Corporate Reorganization and Conversion;
–>
the
sale of ordinary shares by us in this offering at an assumed initial public offering price of $             per share, the midpoint of the range set forth on
the front cover page of this prospectus; and
–>
the
application of the net proceeds of this offering and our new senior secured credit facility as described under "Use of Proceeds".
This
table should be read in conjunction with our consolidated financial statements and accompanying notes thereto, "Use of Proceeds" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations—Liquidity and Capital Resources" included elsewhere in this prospectus.
As of July 2, 2011
Actual
Pro forma
Pro forma
as adjusted
(dollars in thousands,
except per share data)
Cash and cash equivalents
$
56,010
Debt and borrowings
Secured term loans issued under existing senior secured credit agreement, net of unamortized discount of $25.3 million
184,656
Unsecured term loans issued under mezzanine credit agreement, net of unamortized discount of $66.2 million
119,512
Secured term loans issued under new senior secured credit facility
—
Loans issued under new revolving credit facility
—
Convertible preferred certificates
224,679
Other indebtedness
15,017
Total debt and borrowings
$
543,864
$
$
Stockholders' equity
Common shares of Isola Group S.a.r.l., €25 par value ($31), 500 shares authorized, issued and outstanding (actual)
15
Ordinary shares of Isola Group Ltd., 100,000,000 shares authorized,
              shares issued and outstanding (pro forma), and              shares issued and outstanding (pro
forma as adjusted)
Additional paid-in capital
31,864
Accumulated deficit
(413,709
)
Accumulated other comprehensive income / (loss)
(36,064
)
Total stockholders' deficiency
(417,894
)
Total capitalization
$
125,970
$
$
33
Table of Contents
Selected Historical Consolidated Financial and Other Data
The following table presents our selected historical consolidated financial and other data. The consolidated statements of operations
data, balance sheet data and other financial data as of and for fiscal 2010, 2009, 2008, 2007 and 2006 are derived from our audited consolidated financial statements which, except for fiscal 2007 and
2006 and balance sheet data as of the end of fiscal 2008, are included elsewhere in this prospectus. The consolidated statements of operations data, balance sheet data and other financial data as of
and for the six months ended July 2, 2011 and June 26, 2010 are derived from our unaudited interim financial statements for those periods included elsewhere in this prospectus and have
been prepared on a basis consistent with the respective audited consolidated financial statements and, in the opinion of management, include all adjustments, consisting of normal, recurring
adjustments, necessary for a fair presentation of that information for such periods. The financial data presented for the interim periods is not necessarily indicative of the results for the full
year. The selected historical consolidated financial and other data below should be read in conjunction with "Use of Proceeds", "Capitalization", "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated financial statements and related notes included elsewhere in this prospectus.
Six months ended
Fiscal year
July 2,
2011
June 26,
2010
2010
2009
2008
2007
2006
(3)
(dollars in thousands, except per share amounts)
(1)
Consolidated Statement of Operations Data:
Revenues
$
316,583
$
306,957
$
611,987
$
416,140
$
570,333
$
631,233
$
642,622
Cost of goods sold
240,433
231,908
467,751
330,584
487,052
523,517
527,018
Gross profit
76,150
75,049
144,236
85,556
83,281
107,716
115,604
Operating expenses:
Sales, general and administrative
38,371
31,343
65,271
59,656
62,763
63,875
75,141
Research and development
5,193
4,817
9,532
9,244
10,663
8,518
7,257
Restructuring
177
3,464
4,782
18,129
7,692
1,736
4,385
Goodwill impairment
8,513
Total operating expenses
$
43,741
$
39,624
$
79,585
$
87,029
$
89,631
$
74,129
$
86,783
Operating income / (loss)
32,409
35,425
64,651
(1,473
)
(6,350
)
33,587
28,821
Other income / (loss)—net
1,031
3,005
2,020
224
2,768
3,211
(1,076
)
Embedded derivative gain / (loss)
17,472
(58,162
)
25,030
(27,513
)
115,352
59,707
(71,582
)
Interest expense
(2)
(39,032
)
(26,997
)
(72,134
)
(54,620
)
(58,478
)
(49,097
)
(26,905
)
Interest income
94
159
339
453
1,307
2,511
1,646
Foreign exchange gain / (loss)–net
(20,402
)
27,863
9,596
(2,116
)
(341
)
(27,000
)
(1,929
)
Income / (loss) from continuing operations before income taxes
(8,428
)
(18,707
)
29,502
(85,045
)
54,258
22,919
(71,025
)
Provision for income taxes
(10,679
)
(11,818
)
(24,420
)
(6,504
)
(6,804
)
(11,136
)
(7,807
)
Loss from discontinued operations, net of tax
(9,177
)
(11,655
)
(7,328
)
(5,630
)
Net income / (loss)
$
(19,107
)
$
(30,525
)
$
5,082
$
(100,726
)
$
35,799
$
4,455
$
(84,462
)
Net income / (loss) per common share
Basic
$
(38.21
)
$
(61.05
)
$
10.16
$
(201.45
)
$
71.60
$
8.91
$
(168.92
)
Diluted
$
(38.21
)
$
(61.05
)
$
10.16
$
(201.45
)
$
71.60
$
8.91
$
(168.92
)
Weighted average number of common and common equivalent shares outstanding
Basic
500
500
500
500
500
500
500
Diluted
500
500
500
500
500
500
500
34
Table of Contents
Selected Historical Consolidated Financial and Other Data
As of
Fiscal year
July 2,
2011
June 26,
2010
2010
2009
2008
2007
2006
(dollars in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents
$
56,010
$
58,182
$
36,733
$
38,932
$
74,084
$
88,564
$
83,380
Current assets
228,537
251,300
201,208
178,362
213,435
277,742
300,160
Total assets
402,366
413,071
377,194
357,852
424,324
528,482
535,188
Current liabilities
149,242
537,389
131,603
480,461
467,488
215,994
222,236
Working capital (deficit)
79,295
(286,089
)
69,605
(302,099
)
(254,053
)
61,748
77,924
Long-term debt and capital lease obligations
319,784
13,968
306,547
16,408
30,254
313,325
310,463
Convertible preferred certificates
224,679
155,860
199,136
176,595
162,567
152,700
126,565
Total liabilities
820,260
841,611
774,758
756,210
726,882
852,935
862,629
Common stock and additional paid in capital
31,879
28,978
30,667
28,175
26,418
25,196
22,846
Total stockholders' deficiency
(417,894
)
(428,542
)
(397,564
)
(398,358
)
(302,558
)
(324,453
)
(327,441
)
Other Financial Data:
Adjusted EBITDA
(4)
$
49,180
$
49,186
$
89,661
$
38,983
$
37,647
$
66,170
$
52,956
(1)
For factors that may affect the comparability of financial information included in this table to future results of operations, see "Management's Discussion and Analysis of Financial
Condition and Results of Operation—Factors Affecting Comparability".
(2)
Interest expense for the six months ended July 2, 2011 was $39.0 million (comprised of cash interest expense of $18.0 million and non-cash interest
expense of $21.0 million). Non-cash interest expense includes the amortization of deferred loan origination costs, the amortization of original issue discount, the accretion of
interest paid-in-kind on our debt under our mezzanine credit agreement and the accretion of interest on our convertible preferred certificates. We intend to use the proceeds of
this offering to reduce our current indebtedness and to refinance the remaining balance of our current indebtedness with $              million borrowed under a new senior secured
credit
facility bearing interest at         % per annum. If such transactions had occurred as of the end of fiscal 2010, our interest expense for the six months ended July 2, 2011 would have
been $          million.
(3)
We acquired the Polyclad Laminates ("Polyclad") business segment from Cookson Electronics on April 21, 2006. The acquisition of Polyclad was accounted for as a
purchase
transaction. Polyclad's operating results have been included since the date of acquisition.
(4)
Adjusted EBITDA is defined as net income / (loss) less (A) loss from discontinued operations, net of tax, plus (B) (i) interest expense and interest income,
 net,
(ii) provision from income taxes, (iii) depreciation and amortization and (iv) certain additional adjustments. These additional adjustments include stock-based compensation,
restructuring charges, foreign exchange gain / (loss)–net, goodwill impairment, management fees paid to TPG Capital, embedded derivatives gain / (loss), gain related to a settlement of a
patent infringement matter and pre-IPO expenses.
Adjusted EBITDA is a measure used by management and external users of our consolidated financial statements to evaluate operating performance, but it is not
a recognized term under U.S. GAAP and is not an alternative to net income as a measure of overall financial performance or to Cash Flows from Operating Activities as a measure of cash generated
from operating activities. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow available for management's discretionary use, as it does not consider certain cash
requirements such as for tax payments and debt service requirements, nor does it consider the need for incremental working capital or capital expenditures.
We believe Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance and compare the results of our operations
from period to period and against our peers without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA
because these amounts can vary substantially from company to company within our industry depending on accounting methods and book values of assets, capital structure and the method by which assets
were acquired. We further believe that Adjusted EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an
EBITDA or Adjusted EBITDA measure when reporting their results. We use non-GAAP financial measures to supplement U.S. GAAP measures to provide a further understanding of the factors
and trends affecting the business that U.S. GAAP measures alone can not provide. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable
to other similarly titled measures of other companies.
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Selected Historical Consolidated Financial and Other Data
The following table presents a reconciliation of net income / (loss), the most directly comparable financial measure under U.S. GAAP, to Adjusted EBITDA
for the periods presented.
Six months ended
Fiscal year
July 2, 2011
June 26, 2010
2010
2009
2008
2007
2006
(dollars in thousands)
Net income / (loss):
$
(19,107
)
$
(30,525
)
$
5,082
$
(100,726
)
$
35,799
$
4,455
$
(84,462
)
Less loss from discontinued operations, net of tax
9,177
11,655
7,328
5,630
Income / (loss) from continuing operations
(19,107
)
(30,525
)
5,082
(91,549
)
47,454
11,783
(78,832
)
Interest expense
39,032
26,997
72,134
54,620
58,478
49,097
26,905
Interest income
(94
)
(159
)
(339
)
(453
)
(1,307
)
(2,511
)
(1,646
)
Provision for income taxes
10,679
11,818
24,420
6,504
6,804
11,136
7,807
Depreciation and amortization
8,683
8,464
16,937
18,296
21,752
23,001
17,044
Stock-based compensation
1,212
803
2,219
1,757
1,222
2,350
1,752
Restructuring charges
177
3,464
4,782
18,129
7,692
1,736
4,385
Foreign exchange translation (gain) / loss
20,402
(27,863
)
(9,596
)
2,116
341
27,000
1,929
Goodwill impairments
8,513
Management fee expense—TPG Capital
1,024
1,025
2,052
2,050
2,050
2,285
2,030
Embedded derivative (gain) / loss
(17,472
)
58,162
(25,030
)
27,513
(115,352
)
(59,707
)
71,582
Gain related to settlement of a patent infringement matter
(3,000
)
(3,000
)
Pre-IPO expenses
4,644
Adjusted EBITDA
$
49,180
$
49,186
$
89,661
$
38,983
$
37,647
$
66,170
$
52,956
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Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and results of our operations should be read
in conjunction with the consolidated financial statements and related footnotes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified
below, and those discussed in the sections titled "Risk Factors" and "Forward-Looking Statements" included elsewhere in this prospectus. You should read the following discussion together with the
sections titled "Risk Factors", "Selected Historical Consolidated Financial and Other Data" and our consolidated financial statements, including the related footnotes, included elsewhere in this
prospectus.
OVERVIEW
Business
Isola is a leading global material sciences company that designs, develops and manufactures copper-clad laminate ("CCL")
and prepreg (collectively, "laminate materials") used to fabricate advanced multilayer printed circuit boards ("PCBs"). PCBs provide the physical platform for the semiconductors, passive components
and connection circuitry that power and
control virtually all modern electronics. We focus on the market for high-performance laminate materials, developing proprietary resins that are critical to the performance of PCBs used in
advanced electronic applications. We continually invest in research and development and believe that our industry-leading resin formulations, many of which are patented, provide us with a competitive
advantage. With 11 manufacturing facilities and three research centers worldwide, as well as a global sales force, we are the largest supplier of laminate materials to PCB fabricators in the United
States and Europe, and we are one of the larger suppliers in our addressable Asian market, based on revenue for fiscal year 2010.
Our
high-performance PCB laminate materials are used in a variety of advanced electronics, including network and communications equipment and high-end consumer electronics, as
well as advanced automotive, aerospace, military and medical applications. Demand in these markets is driven by the rapid growth of bandwidth-intensive, high-speed data transmission, the expansion of
the internet, the emergence of cloud computing and the evolution of increasingly complex communications technology. This has led to an urgent need for the development of the underlying infrastructure
to support this growth, including faster and more efficient semiconductor technology. In addition, increasingly pervasive environmental regulations are driving a need for lead-free
compatible, high-performance laminate materials.
We
sell our laminate materials globally to leading PCB fabricators, including DDi, Ruwel, Sanmina, TTM Technologies, Viasystems and WUS Printed Circuit. These fabricators produce PCBs incorporating
our laminate materials for electronic equipment designed or produced by a broad group of major original equipment manufacturers, or OEMs, including Alcatel-Lucent, Brocade, Cisco, Google,
Hewlett-Packard, Huawei, IBM and Sun Microsystems (now Oracle). We work closely with these leading PCB fabricators and major OEMs to ensure that our high-performance laminate
materials incorporating our proprietary resins meet the thermal, electrical and physical performance criteria of each new generation of electronic equipment.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Recession and Response
Over the past three years, we have improved our manufacturing capacity utilization and business processes, focused on designing and manufacturing
higher margin, high-performance products, and refinanced our indebtedness. Many of these improvements were a result of our response to the global recession.
We
entered into two credit facilities in 2006, referred to as our first- and second-lien facilities. The leverage covenants set forth in these facilities became more restrictive over time,
requiring periodic increases in our EBITDA (as defined under those facilities) relative to our indebtedness outstanding. At the end of the second quarter of 2008, we were unable to comply with the
tightened covenants. In August 2008, we negotiated amendments to these facilities that provided us with more flexible financial covenants, but also resulted in increased interest expense and
additional loan amortization payments.
In
the wake of the global recession that began in 2008, our revenues and EBITDA declined significantly in the last two quarters of 2008, and in January 2009 we notified the lenders under our first-
and second-lien facilities that we had defaulted under the revised leverage covenants and were suspending cash interest payments. With the assistance of an outside advisor, we took
aggressive measures to reduce fixed expenses and cash outflows. The more significant measures were the closure of our manufacturing facilities in Fremont, California, Dalian, China and Bottegone,
Italy, and the transfer of production from these closed facilities to other nearby manufacturing sites. We also suspended matching grants for U.S. employee 401(k) contributions and our annual
company-wide bonus plan and initiated mandatory salary reductions. We estimate that the consolidation of manufacturing and related actions permanently reduced our annual fixed operating
costs by an estimated $30.0 million and significantly improved our manufacturing capacity utilization.
When
global demand for electronic products began to improve in mid-2009, our enhanced operational leverage, in combination with our increased emphasis on higher margin,
high-performance products, led to improved profits and cash flow. In September 2010, based on these improvements, we paid in full the principal and accrued interest on our first- and
second-lien credit facilities from cash on hand and loans under two new credit agreements: a $210.0 million senior credit and guaranty agreement, referred to as our senior secured
credit agreement, and a mezzanine credit and guaranty agreement in an initial principal amount of $175.0 million, referred to as our mezzanine credit agreement.
Immediately
prior to this offering, Isola Group S.a.r.l. (our current Luxembourg holding company) will reorganize as a Cayman Islands company, Isola Group Ltd. The reorganization is expected to
be a tax-free transaction and the Company does not anticipate that there will be any material income tax expense as a result of the restructuring or any material change to the Company's
ongoing tax position.
KEY FINANCIAL MEASURES
Revenue
Revenue consists primarily of sales of our laminate materials: copper-clad laminates and prepreg. We sell these materials to major PCB fabricators
primarily through our direct global sales force, and we sell to smaller fabricators primarily through third-party distribution arrangements. We have no long-term customer agreements and
sell to customers on a purchase order basis. Consequently, we maintain very little backlog, and our revenue is subject to short-term variability in demand. Although we do not maintain
long-term agreements with our customers, we have developed close relationships with them and the major OEMs that they serve. Through these relationships, we seek to ensure that our
PCB laminate materials are qualified for use in an OEM's product line. In some cases, OEMs may specify Isola laminates as the preferred material. Once a particular PCB laminate material is
"designed in" or qualified for use in a specific product line and one or more particular laminate suppliers are selected, these suppliers tend to remain
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Management's Discussion and Analysis of Financial Condition and Results of Operations
suppliers
of choice, even as PCBs for these products change to address OEM product line improvements or extensions or next generation developments.
Revenue
in the laminate materials industry tends to reflect broad economic trends, as well as trends in the semiconductor industry. Historically, revenue has been disproportionally affected (both
positively and negatively) by such trends due to adjustments of inventory levels within the supply chain in response to changing economic conditions. In particular, PCB fabricators tend to discontinue
laminate purchases at the perceived onset of economic downturns and tend to wait to restock supplies until they reach critical levels following recessionary conditions. Revenue was
$570.3 million for fiscal 2008, $416.1 million for fiscal 2009 and $612.0 million for fiscal 2010, and $307.0 million for the six months ended June 26, 2010 as
compared to $316.6 million for the six months ended July 2, 2011, reflecting the decline into, and beginning of a recovery from, the global recession.
Our
sales prices are affected primarily by competitive factors, as well as changing costs of raw materials used in production, especially copper. Copper is a globally traded commodity subject to
ongoing market fluctuations. When feasible, we pass on changes in costs of raw materials to our customers. We believe that the high-performance segment of the PCB materials industry is
more resilient to economic downturns and that customers are generally more willing to absorb, or share, increases in raw materials costs for such products.
A
significant percentage of our revenue has historically been concentrated in a limited number of larger customers. While only one of our customers accounted for more than 10% of our revenues in each
of fiscal 2010, fiscal 2009 and fiscal 2008 and the six months ended July 2, 2011 and June 26, 2010, we
believe that our ten largest customers accounted for the majority of our revenues in each of these periods. Though the composition of our top ten customers varies from year to year, we expect that
sales to a limited number of customers will continue to account for a significant percentage of our total revenue for the foreseeable future.
Cost of Goods Sold
Our cost of goods sold includes raw materials, direct and indirect labor and overhead costs such as rent, supplies, and utilities. Cost of goods sold
was $240.4 million in the six months ended July 2, 2011 (75.9% of total revenue) as compared to $231.9 million in the six months ended June 26, 2010 (75.6% of total
revenue). Cost of goods sold was $467.8 million in fiscal 2010 (76.4% of total revenue), $330.6 million in fiscal 2009 (79.4% of total revenue) and $487.1 million in fiscal 2008
(85.4% of total revenue). The changes in cost of goods sold as compared to revenue are discussed in the "Gross Margin" section below.
Gross Margin
Gross margin, which is gross profit as a percentage of total revenue, has historically been, and is expected in the future to be, affected by a
variety of factors, including the mix of products we sell, competitive pricing pressures, changes in the costs of raw materials (and our ability to pass through these changes to our customers), labor
costs, overhead costs, production volume and manufacturing capacity utilization.
Our
high-performance products, which address technically challenging applications, typically have higher average selling prices and higher gross margins than our standard products. In
addition, when we provide products on a "quick-turn" basis we are often able to command a pricing premium, which results in higher gross margin than products provided on a standard
lead-time basis.
Our
overall gross margin was 24.1% in the six months ended July 2, 2011 as compared to 24.4% in the six months ended June 26, 2010; overall gross margin was 23.6% in fiscal 2010, 20.6%
in fiscal 2009 and 14.6% in fiscal 2008. The first six months of fiscal 2010 were positively impacted by the restocking of our
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Management's Discussion and Analysis of Financial Condition and Results of Operations
materials
by PCB manufacturers as economic conditions improved. The improvement in gross margin from fiscal 2008 to fiscal 2010 reflects the operational improvements we made during fiscal 2008 and
2009 and our ongoing focus on higher margin, high-performance products. We expect overall gross margin to continue to improve over time as demand expands in a strengthening economy and
high-performance products become an increasing percentage of our overall revenue. However, our revenues and gross margin will continue to be subject to general economic conditions and
cyclical factors affecting our industry.
Operating Expenses
Our operating expenses include the following:
Sales, general and administrative expense.
Our sales, general and administrative, or SG&A, expense includes expenses incurred in the selling and marketing of our
products to customers, as well as corporate administrative expenses. Sales expenses consist primarily of compensation, benefits and other expenses for sales and marketing personnel, as well as
expenses related to advertising, marketing and trade shows, plus bad debt expense. General and administrative expenses consist primarily of compensation and associated expenses for executive
management, human resources, finance and administrative personnel. SG&A expense was $38.4 million in the six months ended July 2, 2011 (12.1% of total revenue) as compared to
$31.3 million in the six months ended June 26, 2010 (10.2% of total revenue). The increase in SG&A expense for the six months ended July 2, 2011 was due to higher professional
fees associated with this offering. SG&A expense was $65.3 million in fiscal 2010 (10.7% of total revenue), $59.7 million in fiscal 2009 (14.3% of total revenue) and $62.8 million
in fiscal 2008 (11.0% of total revenue). The percentage reduction in fiscal 2010 compared to fiscal 2009 was primarily attributable to the increase in revenue. We expect SG&A expense to decrease as a
percentage of revenue in the future as the economy continues to strengthen and demand for our products increases.
Research and development expense.
Research and development, or R&D, expense consists of the compensation, benefits and other expenses of R&D personnel, as well as
other product development
costs, such as direct product design, development and process engineering expenses, legal fees related to the defense of intellectual property and the depreciation of the capital equipment and
facilities used by R&D staff. All R&D costs are recorded as expenses when incurred. Our investments in R&D were $5.2 million in the six months ended July 2, 2011 (1.6% of total revenue)
as compared to $4.8 million in the six months ended June 26, 2010 (1.6% of total revenue). R&D expenses were $9.5 million in fiscal 2010 (1.6% of total revenue),
$9.2 million in fiscal 2009 (2.2% of total revenue), and $10.7 million in fiscal 2008 (1.9% of total revenue). We are committed to adding more technical resources to this important
function and expect that R&D expense will increase over time. However, R&D expense as a percentage of our total revenue is expected to decline in the future as demand for our products increases.
Based
on input from OEMs and PCB fabricators, we develop new resin formulations that achieve specific needs for electrical, thermal and physical performance. We undertake very little
exploratory research not directly linked to particular market or customer needs. Our OEM marketing and R&D efforts are tightly integrated, with both functions reporting to our Chief Technology
Officer. However, the expense of these OEM marketing efforts, which we estimate totaled approximately $2.1 million in the six months ended July 2, 2011 as compared to approximately
$2.0 million in the six months ended June 26, 2010, and we estimate totaled approximately $4.4 million in fiscal 2010, approximately $3.6 million in fiscal 2009 and
approximately $3.8 million in fiscal 2008, is included in SG&A expense.
Restructuring expense.
We identify separately the expenses related to restructuring activities, including the cost of site closures and attendant severance
expenses, as well as professional fees incurred in connection with restructuring activities. As described above, in 2008 and 2009 we initiated a number of measures centered on streamlining our
organizational structure, reducing labor costs and improving manufacturing
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Management's Discussion and Analysis of Financial Condition and Results of Operations
capacity
utilization. In this regard, we recorded restructuring expenses of $0.2 million in the six months ended July 2, 2011 as compared to $3.5 million in the six months ended
June 26, 2010. Restructuring expenses were $4.8 million in fiscal 2010, $18.1 million in fiscal 2009 and $7.7 million in fiscal 2008. Our major restructuring initiatives
have been largely completed. We expect to incur minimal restructuring charges in the remainder of 2011, principally in connection with our reorganization as a Cayman Islands company and immaterial
residual costs associated with various prior site closures.
Goodwill impairment charges.
We test our goodwill asset for possible impairment at least annually and recognize any related losses when incurred. If the carrying
value of goodwill exceeds its fair value, a second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. Circumstances that may lead to impairment of
goodwill include, but are not limited to, the loss of a significant customer or customers and unforeseen reductions in customer demand, future operating performance or industry demand. As a result of
recession-induced reductions in industry demand, we
recognized a goodwill impairment charge in 2008 of $8.5 million. This charge eliminated all goodwill from our balance sheet.
Non-operating Expenses
Other income—net.
Other income—net consists of royalty income and other various forms of non-operating income and expenses.
Other income—net was $1.0 million in the six months ended July 2, 2011, as compared to $3.0 million in the six months ended June 26, 2010, which included a
$3.0 million gain on the successful settlement of an intellectual property dispute. Other income–net was $2.0 million in fiscal 2010, $0.2 million in fiscal 2009 and
$2.8 million in fiscal 2008.
Embedded derivative gain / (loss).
The conversion feature of our convertible preferred certificates is considered an embedded derivative. In addition, the
mandatory pre-payment features of our senior secured credit agreement and our mezzanine credit agreement are also considered embedded derivatives. The value of each of these embedded
derivatives is measured quarterly, and any changes in the values are reflected in embedded derivative gain / (loss). Changes in the value of these derivatives have no impact on cash flow.
The
embedded derivative gain / (loss) associated with the convertible preferred certificates and debt in any period reflects changes in the valuation of our company which we determine with the
assistance of a third party consultant using both income and market approaches to arrive at our enterprise value. The income approach estimates our enterprise value by discounting our expected future
cash flows to present value. The market approach estimates our total enterprise value by comparing our business to similar businesses whose securities are actively traded in public markets, or
businesses that are involved in a public or private transaction. Valuation multiples are derived from trading multiples of public companies that participate in our industry. These valuation multiples
are then applied to the equivalent financial metrics of our business, giving consideration to differences between our company and similar companies for such factors as size, financial leverage, and
growth prospects.
When
the estimated enterprise value of our company increases from period to period, the value of the embedded derivatives liability associated with the convertible preferred certificates increases and
we record an embedded derivative loss. Conversely, when the estimated enterprise value of our company decreases from period to period, we record an embedded derivative gain.
The
embedded derivative gain on the convertible preferred certificates was $11.9 million in the six months ended July 2, 2011, as compared to a loss of $58.2 million in the six
months ended June 26, 2010. In fiscal 2010 we recorded an embedded derivative gain of $21.7 million, in fiscal 2009 we recorded a loss of $27.5 million and in fiscal 2008 we
recorded a gain of $115.4 million.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
The
embedded derivative gain on loans under the senior secured credit agreement and mezzanine credit agreement was $5.6 million for the six months ended July 2, 2011, as compared to zero
for the six months ended June 26, 2010, which preceded the date of our senior secured credit agreement and mezzanine credit agreement (these credit agreements were effective on
September 30, 2010, which fell into our fiscal fourth quarter of 2010). The embedded derivative gain related to the mandatory pre-payment features of our senior secured credit
agreement and mezzanine credit agreement was $3.3 million in fiscal 2010.
Interest expense.
Interest expense consists of cash and non-cash interest expense. Non-cash interest expense includes the amortization of
deferred loan origination costs, the amortization of original issue discount ("OID"), the accretion of interest paid-in-kind ("PIK") on our mezzanine debt and the accretion of
interest on our convertible preferred certificates. See "Description of Indebtedness—Our Existing Credit Agreements".
Total
interest expense was $39.0 million in the six months ended July 2, 2011, as compared to $27.0 million in the six months ended June 26, 2010. This $12.0 million
increase was primarily due to higher interest rates as well as higher OID amortization. Non-cash interest expense was $21.0 million in the six months ended July 2, 2011, as
compared to $5.4 million in the six months ended June 26, 2010. In the six months ended July 2, 2011, the non-cash interest included $7.2 million of PIK
interest on our mezzanine debt and $5.0 million of OID amortization expense, (of which $2.1 million was attributable to loans under the senior secured credit agreement and
$2.9 million was attributable to loans under the mezzanine agreement), and $1.0 million amortization of deferred loan origination costs. Non-cash interest also includes
accreted interest on the convertible preferred certificates of $7.8 million in the six months ended July 2, 2011 and $4.7 million in the six months ended June 26, 2010.
Total
interest expense was $72.1 million in fiscal 2010, $54.6 million in fiscal 2009 and $58.5 million in fiscal 2008. Interest expense increased $17.5 million in fiscal
2010 compared to fiscal 2009, which amount included $9.5 million of "interest on unpaid interest" under the previous first- and
second-lien credit facilities. Non-cash interest expense was $21.2 million in fiscal 2010, $11.7 million in fiscal 2009 and $20.5 million in fiscal 2008.
Of the non-cash interest expense in fiscal 2010, $3.6 million was PIK interest on our mezzanine debt and $2.3 million was OID amortization, of which $1.0 million was
attributable to loans under the senior secured credit agreement and $1.3 million was attributable to loans under the mezzanine agreement. $4.6 million of non-cash interest in
2010 was attributable to deferred loan origination costs of which $2.8 million was due to the write-off of deferred loan origination costs related to our prior first- and
second-lien credit facilities which were repaid in the fourth quarter of fiscal 2010. Non-cash interest expense also includes interest on the convertible preferred certificates
of $10.7 million in fiscal 2010, $10.5 million in fiscal 2009 and $15.1 million in fiscal 2008.
We
intend to prepay in full our outstanding senior secured and mezzanine debt with the proceeds of this offering and with the proceeds of borrowings under a new senior secured credit facility, which
will accelerate the amortization of OID and deferred loan origination costs associated with our current credit agreements. See "—Factors Affecting Comparability—Reduction of
Interest Expense Through Debt Repayment" and "Use of Proceeds".
Foreign Exchange Effects
Our functional currency and reporting currency is the U.S. dollar. Gains or losses resulting from foreign currency transactions (transactions
denominated in a currency other than our subsidiaries' functional currencies) are included in foreign exchange gains and losses in the consolidated statement of operations in the period they occur.
Foreign
currency transaction gains and losses, unrealized translation gains and losses associated with certain of our foreign subsidiaries with a U.S. dollar functional currency that maintain their
books of record
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Management's Discussion and Analysis of Financial Condition and Results of Operations
in
a currency other than the U.S. dollar and unrealized translation gains and losses on short-term intercompany and operating receivables and payables denominated in a currency other than
the functional currency are included in foreign exchange gains and losses in the consolidated statement of operations.
For
each foreign subsidiary whose functional currency is the local currency, assets and liabilities are translated into U.S. dollars using exchange rates prevailing at the end of each reporting
period, while revenues and expenses are translated at average rates in effect for the period. The related translation
gains and losses are included in accumulated other comprehensive income / (loss) within equity on the consolidated balance sheet.
Foreign
exchange gain / (loss)—net totaled a loss of $20.4 million in the six months ended July 2, 2011 as compared to a gain of $27.9 million in the six months ended
June 26, 2010, and totaled a gain of $9.6 million in fiscal 2010, a loss of $2.1 million in fiscal 2009, and a loss of $0.3 million in fiscal 2008.
Discontinued Operations
Discontinued operations reflect the operations and the loss on the disposal of our closed Italian laminate facility, Mas Italia. We have completed
the liquidation of this subsidiary pursuant to a formal legal process. In connection with our plan to close the facility in 2009, we reclassified the financial results of Mas Italia as discontinued
operations. Accordingly, we reported a loss from discontinued operations of $5.6 million in 2009 and $11.7 million in 2008, and a loss on disposal of discontinued operations of
$3.6 million in 2009. We do not expect to incur any further significant losses in connection with closure of this facility or liquidation of its related subsidiary.
FACTORS AFFECTING COMPARABILITY
We anticipate that the following factors, which are described in greater detail above, will affect the comparability of our historic and future
financial performance:
–>
our
major restructuring activities have been largely completed, and we expect to incur minimal charges related to these activities in the future;
–>
financial
results attributable to our discontinued operations were minimal in the three months ended July 2, 2011, and are expected to be immaterial for the
remainder of 2011; and
–>
as
a result of the effective conversion of our Sponsors' investment in Isola from convertible preferred certificates to ordinary shares in connection with our
initial public offering, we will not incur financial effects (principally accreted non-cash interest expense) related to these securities subsequent to the effective date of the offering.
The
following sets forth additional factors that may affect the comparability of our historic and future results:
Fiscal Year and 53rd Week Impact
We operate on either a 52- or 53-week fiscal year. References to fiscal 2010 are for the fiscal year ended January 1,
2011; references to fiscal 2009 are for the fiscal year ended December 26, 2009; and references to fiscal 2008 are for the fiscal year ended December 27, 2008.
Each
quarterly period of the fiscal year typically has 13 weeks, except for the occasional 53-week year when the fourth quarter has 14 weeks. This 53-week year
occurs every five to six years to keep the fiscal and calendar quarters in approximate alignment. Our fiscal years 2009 and 2008 each consisted of 52 weeks. Our 2010 fiscal year consisted of
53 weeks, which had a favorable impact on revenue and operating income. Fiscal year 2011 is a 52-week year.
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Reduction of Interest Expense
Immediately prior to the completion of our initial public offering, we will undergo a corporate reorganization that includes the effective conversion
of all of our outstanding convertible preferred certificates to ordinary shares. As a result of this conversion, we will no longer
record accreted interest expense related to the convertible preferred certificates, which was $10.7 million in fiscal 2010. In the fiscal quarter in which the conversion takes place, we will
reclassify the embedded derivative liability which has a balance of $              million
at                           , 2011 to stockholder's equity in the consolidated balance sheet. We will also
reclassify approximately $              million of OID incurred in connection with the Class C convertible preferred certificates to stockholder's equity in the consolidated
balance
sheet.
We
intend to use the proceeds of this offering to reduce our current indebtedness and to refinance the remaining balance of our current indebtedness with $              million
borrowed under
a new senior secured credit facility bearing interest at         % per annum. We expect to reduce our annualized cash interest expense by
$              million and our total interest
expense by $              million. Both annualized interest expense savings are based on our annualized actual cash and non-cash interest expense for the six month period ended
July 2, 2011. Also, in the fiscal quarter in which we pay down our current debt, as a result of refinancing our current indebtedness we will amortize to interest expense approximately
$              million of OID incurred in connection with these financings and write off approximately
$              million of deferred financing costs. We expect that our interest
expense will benefit from the termination of the amortization of OID and deferred loan origination costs described above.
Management Fees and Expense
In connection with the acquisition and investment in the Isola Group by TPG Capital, we entered into a management agreement with TPG Capital, which
remains one of our Principal Sponsors. In each of the six months ended July 2, 2011 and June 26, 2010, we accrued approximately $1.0 million in management fees payable to TPG
Capital under this agreement. Management fees and related expenses were $2.1 million annually in fiscal 2010, 2009 and 2008, and were paid in full by mid-year 2011. Concurrently
with the closing of this offering, the management agreement will be terminated, provided that we will remain obligated to pay TPG Capital an $8.0 million transaction fee plus approximately
$1.0 million in accrued management fees and related expenses through such date. See "Certain Relationships and Related Transactions—Agreements with Our Sponsors".
Public Company Expense
Upon consummation of this public offering, we will become a public company and our ordinary shares will be listed for trading on the Nasdaq Global
Market. As a result, we will need to comply with numerous additional laws, regulations, and requirements. In 2011, we hired a General Counsel, a Director of External Reporting and a Senior Tax
Director, and we plan to hire other tax, finance, accounting and human resources personnel, as needed, to enhance our internal
compliance capabilities. We will also be adding new independent board members, who will be compensated in accordance with market practice, and we have procured more comprehensive director and officer
liability insurance covering our increased exposure as a public company. We estimate that incremental annual public company costs will be approximately $3.0 million.
We
expect that we will incur approximately $9.0 million in expenses in connection with this offering, including our reorganization as a Cayman Islands company. We have incurred
$4.6 million in expenses in connection with this offering as of July 2, 2011, which we have elected to expense rather than defer and apply as a reduction of net proceeds to be received
from this offering.
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Non-cash Stock-based Compensation Charges
Upon consummation of the offering and capitalization of our new Cayman holding company, outstanding management equity awards will be converted to
equivalent awards in the new, publicly traded company. In addition, we adopted our 2011 Equity Incentive Plan under which we may make future equity awards to directors, executives, and other
employees.
Upon
the closing, we anticipate granting restricted stock to our independent directors and various equity awards to officers and key employees. These equity awards will result in a
non-cash compensation charge to the consolidated statement of operations in future fiscal periods as the awards vest.
Tax Contingencies
The Company and its subsidiaries file income tax returns with U.S. federal, state and local and non-U.S. jurisdictions and are subject to audits of
those returns. Currently, the Internal Revenue Service ("IRS") is examining the 2008 and 2009 federal income tax returns. The Company and its subsidiaries are no longer subject to IRS examination for
periods prior to 2007, although carryforward attributes that were generated prior to 2007 may still be adjusted upon examination by the IRS if they either have been or will be used in a future period.
Income tax returns filed by the Company's German subsidiaries are also under examination for the years 2004 through 2007. With a few exceptions, the Company and its subsidiaries are no longer subject
to examination for years prior to 2004.
The
Company has recorded $56.4 million and $53.4 million related to uncertain tax positions in the consolidated balance sheet as of July 2, 2011 and January, 1, 2011,
respectively. In this regard, an uncertain tax position represents the Company's expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return or
claim that has not been reflected in
measuring income tax expense for financial reporting purposes. Until these positions are sustained by the taxing authorities, the Company does not recognize the tax benefits resulting from such
positions and reports the tax effects as a liability for uncertain tax positions in its consolidated balance sheet. Much of the recorded liability for uncertain tax positions is associated with tax
jurisdictions where we have experienced significant net operating losses in the past and accordingly, a significant portion of the recorded liability, if settled unfavorably, would not be settled in
cash.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Overview
As a result of becoming a public company, we will have to comply with the standards adopted by the Public Company Accounting Oversight Board. More
specifically, pursuant to Section 404 of the Sarbanes-Oxley Act, management will be required to report on, among other things, the effectiveness of our internal control over financial
reporting. This reporting requirement will begin with our Annual Report on Form 10-K for our 2012 fiscal year ending December 29, 2012 (to be filed in early 2013).
Management's assessment of the effectiveness of our internal controls will have to include disclosure of any material weaknesses identified in our internal control over financial reporting, as well as
a statement that our independent registered public accounting firm has issued an opinion on the effectiveness of our internal controls over financial reporting. Prior to becoming a public company, we
are not required to be compliant with the requirements of Section 404 of the Sarbanes-Oxley Act.
Material Weakness
In preparation for this offering, we and our independent registered public accounting firm identified a material weakness in our internal controls
over financial reporting. Under standards established by the Public Company Accounting Oversight Board, a material weakness is a deficiency, or combination of
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deficiencies,
in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected and
corrected in a timely manner. Our internal control deficiencies resulted in material adjustments to the Company's previously issued consolidated financial statements for fiscal years 2004 through 2009
and to its consolidated financial statements for fiscal 2010. These material adjustments were not previously identified by us because we had limited resources within the accounting function possessing
a requisite level of technical experience in the selection and application of certain accounting principles.
Our
accounting determinations with respect to our more complex transactions reflected research by our financial and accounting management and the review and vetting of management's preliminary
conclusions with external technical resources. These efforts, however, were not sufficient to ensure that we reached the proper conclusions and accounting determinations regarding the following
accounting topics issued by the Financial Accounting Standards Board's Accounting Standards Codification ("ASC"):
–>
ASC Topic 480: "Distinguishing Liabilities from Equity".
We have convertible preferred
certificates as part of our capital structure. These are hybrid securities, often issued by companies chartered in Luxembourg, which have characteristics of both debt and equity. Previously, we had
accounted for these convertible preferred certificates as equity. In 2011, it was determined that these securities are properly accounted for as debt instruments based upon their legal form under
Luxembourg law. Further, we completed a financing in 2010 that included the issuance of senior secured term loans, unsecured term loans and Class C convertible preferred certificates, with a
syndicate of lenders, the majority of which are partial owners in the Sponsor Limited Partnership. We did not allocate the total arrangement proceeds among the underlying instruments based upon
relative fair value. Our outstanding convertible preferred certificates will be effectively converted into ordinary shares of Isola Group Ltd. upon the completion of this offering as described
in "Concurrent Transaction—Corporate Reorganization."
–>
ASC Topic 815: "Derivatives and Hedging".
We completed a refinancing in September 2010,
but we failed to recognize at that time that the prepayment options of the new credit agreements constituted embedded derivatives for financial reporting purposes. The conversion feature within our
convertible preferred certificates also represents an embedded derivative. It was also determined during 2011 that the fair value associated with the conversion feature had not taken into account the
rights and privileges associated with our capital structure.
–>
ASC Topic 830: "Foreign Currency Matters".
In 2011, it was determined that we had not changed our
corporate functional currency from the euro to the U.S. dollar coincident with a leveraged recapitalization that changed the currency of our primary financing from the euro to the U.S. dollar. Further
analysis uncovered that two operating subsidiaries had used incorrect local functional currencies.
–>
ASC Topic 718: "Compensation—Stock Compensation".
The Sponsor Limited Partnership,
which is the parent entity that owns Isola Group S.a.r.l. (Isola's current Luxembourg holding company) and is not part of the consolidated Isola group, issued stock-based awards to certain members of
executive management. In 2011, it was subsequently determined that we should have recorded an appropriate expense for stock-based compensation related to the awards issued by the Sponsor Limited
Partnership to certain members of our executive management and that the related compensation expense determination should have considered the rights and preferences of our ownership structure as well
as the ownership structure of the Sponsor Limited Partnership.
Management
has determined that these control deficiencies constitute a material weakness in the design and operation of internal controls.
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In
light of the material weakness in our internal control over financial reporting, we performed additional analysis and other post-closing procedures in an effort to ensure that our
consolidated financial statements included in this filing have been prepared in accordance with GAAP.
Our
Chief Financial Officer, under the supervision of our Chief Executive Officer and with the oversight of our board of directors, is responsible for implementing changes and improvements in our
internal control over financial reporting and remediating the control deficiencies that gave rise to the
material weakness. To date, we have hired a Director of External Reporting, who has experience working in the accounting departments of public companies.
In
addition, beginning in the third quarter of 2011, we began to formulate a plan to remediate the underlying causes of our material weakness. The plan includes the following actions:
–>
redefine
the organizational structure, roles and responsibilities of the accounting and finance staff and establish additional layers of oversight and quality
review, especially with respect to the accounting for complex transactions, including derivatives and financing transactions;
–>
continue
to recruit additional accounting and finance personnel with the necessary technical skills to fulfill the more demanding accounting and reporting standards
required of a public company;
–>
engage
outside technical accounting and financial advisors on an ongoing basis to assist our accounting and finance staff to determine proper accounting for more
complex transactions, including derivatives and financing transactions;
–>
enhance
and extend the documentation, policies and procedures, including documentation of internal controls, required for the timely financial closing and reporting
processes that will be required of us as a public company;
–>
require
our accounting and financial staff to attend professional courses or seminars to remain abreast of the ever evolving accounting pronouncements and the
additional complexities and reporting requirements of a public company;
–>
review
and rewrite, as appropriate, our current accounting manual; and
–>
continue
to cross-train accounting and financial staff to ensure coverage and continuity in key positions.
Although
we believe that these actions will improve our internal control over financial reporting, and our disclosure controls and procedures, additional time is required to fully implement these
remediation efforts and to demonstrate they have resulted in the effective operation of our internal controls. Our management will closely monitor and modify, as appropriate, the remediation plan
outlined above to eliminate the identified material weakness.
If
the steps we take do not correct the material weakness in a timely manner, we will be unable to conclude that we maintain effective internal control over financial reporting. Accordingly, there
would continue to be a reasonable possibility that a material misstatement of the Company's financial statements would not be prevented or detected on a timely basis.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The discussion of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance
with U.S. generally accepted accounting principles, or U.S. GAAP. During the preparation of these financial statements, we are required to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions, including those discussed below, that are
used to prepare our financial statements. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The results of our
analysis form
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the
basis for making assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different
assumptions or conditions, and the impact of such differences may be material to our financial statements.
While
our significant accounting policies are described in more detail in the notes to our audited financial statements included later in this prospectus, we believe that the following critical
accounting policies involve our more significant judgments and estimates used in the preparation of our financial statements:
Revenue Recognition
We recognize revenue from sales of our products net of estimated returns and allowances, when persuasive evidence of an arrangement exists, including
where the agreement of a fixed price to our customers has been reached and collectability is reasonably assured. Customer purchase orders are used to determine the existence of an arrangement. Our
sales terms do not include rights of return or subsequent price discounts; therefore, we recognize revenue on products sold at the time of shipment or delivery, based on the terms of the agreement.
Shipping and handling costs charged to customers are included in revenue, and the associated shipping and handling costs incurred by us are recorded as cost of goods sold.
Allowance for Doubtful Accounts
We perform ongoing credit evaluations of our customers and adjust credit limits based on each customer's creditworthiness, as determined by our
review of current credit information. We continuously monitor collections and payments from our customers and maintain an allowance for doubtful accounts based upon our historical experience, our
anticipation of uncollectible accounts receivable and any specific customer collection issues that we have identified. While our credit losses have historically been insignificant (other than a
$6.7 million loss in fiscal 2008 which was a result of the softening of the economic environment), we may experience higher credit loss rates in the future than we have in the past. Our
receivables are concentrated in relatively few customers. Therefore, a significant change in the liquidity or financial position of any one significant customer could make collection of our accounts
receivable more difficult, require us to increase our allowance for doubtful accounts and negatively affect our working capital.
Inventories
Inventories include the cost of materials, direct labor, and related manufacturing overhead and are stated at the lower of cost (computed using the
first-in, first-out method) or market. We continually assess the recoverability of inventory based on assumptions about demand and market conditions. Inventory carrying value
is reduced for estimated excess and obsolescence by the difference between cost and estimated market value. This estimate is based on assumptions regarding future demand and market conditions.
Forecasted demand is determined based on historical sales and expected future sales.
Long-lived Assets, Goodwill and Intangibles
Long-lived assets, including property and equipment, and intangible assets subject to amortization, are assessed for impairment whenever
events and circumstances have occurred that indicate the remaining estimated useful lives may warrant revision, or that the remaining balance of these assets may not be recoverable. In performing the
review for recoverability, we estimate the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If an asset is impaired, the amount of the
impairment loss would be calculated based on the excess of the carrying amount of the asset over its estimated fair value. Factors we consider important that could trigger an impairment review include
continued operating losses, significant negative industry trends, significant underutilization of the assets and significant changes in the way we plan to use the assets. The estimation of future cash
flows involves numerous assumptions, which require our judgment, including, but not limited to, future use of the assets
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for
our operations versus sale or disposal of the assets, future selling prices for our products and future production and sales volumes. We must use our judgment in determining the groups of assets
for which impairment tests are separately performed.
Depreciation
and amortization of intangible assets and other long-lived assets is provided using the straight-line method over the assets' respective estimated useful lives,
reflecting the pattern of economic benefits associated with these assets. Changes in circumstances such as technological advances, or changes to our business model could cause the actual useful lives
of long-lived assets and other intangible assets to differ from our initial estimates. If we determine that the useful life of an asset should be revised, we depreciate the remaining net
book value over the new estimated useful life.
In
2010, we did not record any asset impairments and there were no indications of impairment suggesting a requirement to test the long-lived assets for impairment. In 2009, we recorded
$4.1 million in asset impairments associated with the closure of our manufacturing facilities in Fremont, California and Dalian, China. In 2008, we recorded $3.3 million in asset
impairments in connection with our Fremont facility.
Goodwill,
which represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination and is not subject to
amortization, is evaluated, at a minimum, on an annual basis and whenever events or circumstances have occurred that indicate that the carrying value may not be recoverable. Our testing approach
utilizes a discounted cash flow analysis and comparative market multiples to determine each reporting unit's fair value for
comparison to its carrying value. In fiscal 2008, we recorded $8.5 million in goodwill impairments which reduced our goodwill balance to zero; this impairment was attributable primarily to the
reduction in our revenues and profits due to the general decline of the economy.
Litigation and Loss Contingencies
From time to time, we may be involved in claims, lawsuits and other proceedings. Such matters involve uncertainty as to the eventual outcomes and any
gains or losses we may ultimately realize when one or more future events occur or fail to occur. We record expenses for litigation and loss contingencies when it is probable that a liability has been
incurred and the amount of the loss can be reasonably estimated. We estimate the probability of such losses based on the advice of internal and external counsel, outcomes from similar litigation,
status of the lawsuits (including settlement initiatives), legislative developments and other factors.
Due
to the numerous variables associated with these judgments and assumptions, both the precision and reliability of the resulting estimates of the related loss contingencies are subject to
substantial uncertainties. We regularly monitor our estimated exposure to these contingencies and, as additional information becomes known, may change our estimates accordingly.
Fair Value Measurement
We apply fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on
a recurring or nonrecurring basis. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs
by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data
obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions of what market participants would use in pricing the asset or liability developed based on the best
information available in the circumstances. The hierarchy has three levels based on the reliability of the inputs as follows:
–>
Level 1—Valuation
is based upon unadjusted quoted market prices for identical assets or liabilities in active markets that we have the ability to
access.
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–>
Level 2—Valuation
is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets
or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market.
–>
Level 3—Valuation
is based on models where significant inputs are not observable. The unobservable inputs reflect our own assumptions about the
inputs that market participants would use.
Financial
instruments consist of cash, trade receivables, bank lines of credit, short-term bank debt, trade payables, long-term debt, including convertible preferred
certificates, and derivative instruments. With the exception of our derivative instruments, which are recorded at fair value, and our long-term debt and convertible preferred certificates,
the carrying value of these other financial instruments approximates fair value either because of the short maturities of these instruments or because the interest rates are based upon variable
reference rates.
We
engage a third party consultant to assist in the determination of the estimated fair value of our long-term debt, convertible preferred certificates and embedded derivative liabilities.
The
most significant asset or liability recorded at fair value on a recurring basis is our derivative liability, specifically as related to our convertible preferred certificates. The fair value of
our embedded derivatives related to our convertible preferred certificates and our stock-based compensation awards is most sensitive to our determination of the enterprise value of our Company. The
enterprise value inputs associated with the Company's valuation were derived using the income and market approaches. The inputs that significantly impact the enterprise value determination include,
but are not limited to, the following:
–>
our
projected financial performance and operating results;
–>
the
market performance of comparable companies;
–>
changes
in the probability of various scenarios towards higher valuation outcomes;
–>
discount
and illiquidity rates; and
–>
the
likelihood of achieving a liquidity event, such as an initial public offering or sale of our company, given prevailing market conditions.
A
more detailed description of the valuation methodologies used for our long-term debt, convertible preferred certificates and for our assets and liabilities measured at fair value is included in the
footnotes to the consolidated financial statements pertaining the each asset and liability.
Valuation
methodologies used for stock-based awards are included in the footnotes to the consolidated financial statements and in "—Stock-based Compensation Expense" below.
Income Taxes
We are subject to income taxes in the United States and foreign jurisdictions, and we use estimates in determining our provision for income taxes. We
account for taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax-basis
reporting of assets and liabilities that are measured using the enacted tax rates and laws that are expected to be in effect when differences are expected to reverse. We are required to adjust our
deferred tax assets and liabilities in the period when tax rates or provisions of the income tax laws are enacted.
Our
effective income tax rate for fiscal 2010 was 82.8%, resulting in a provision for income taxes of $24.4 million compared to pretax income of $29.5 million. Our effective tax rate for
fiscal 2010 was higher than our statutory income tax rate for fiscal 2010, which was 28.6%. While changes in our effective tax rates are attributable to the mix of taxable income across the
geographies in which we conduct business, our
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effective
income tax rate for fiscal 2010 was adversely impacted by several items such as the accruals for uncertain tax positions and fluctuations in the level of income or loss earned in
loss-making jurisdictions for which we do not expect to realize tax benefits. The effective tax rate in fiscal year 2010 was greater than the statutory rate due to the accrual for
uncertain tax positions that increased the effective tax rate 115.3%. This was offset by a release of the valuation allowance associated with a reduction in deferred tax assets in certain
loss-making jurisdictions, including the U.S., which reduced the effective tax rate by 60.8%.
Our
effective tax rate in fiscal year 2009 was lower than the statutory rate primarily as a result of net operating losses incurred in certain jurisdictions, including in the U.S., for which we do not
expect to realize an associated tax benefit. The effective tax rate in fiscal year 2008 was lower than the statutory rate because of the accrual for uncertain tax positions, which increased the
effective tax rate by 11.3%. This was offset by the release of the valuation allowance associated with a reduction in deferred tax assets in certain loss-making jurisdictions, including
the U.S., which resulted in a net reduction of the effective tax rate by 37.4%.
We
recorded a valuation allowance of $104.9 million at July 2, 2011 to reduce our deferred tax assets to the amount we believe is more likely than not to be realized. We have recorded
valuation allowances on deferred tax assets in a number of tax jurisdictions, the most significant of which are the U.S., Luxembourg and Italy. The most significant tax jurisdictions with deferred tax
assets and no valuation allowances are China and Taiwan. If our assumptions change and we determine we will more likely than not be able to realize those deferred tax assets, the tax benefits related
to any reversal of the valuation allowance will be accounted for in the period in which we make such determination. Likewise, should we determine that we would be able to realize our deferred tax
assets in the future in excess of our recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made.
A
tax benefit from an uncertain tax position may only be recognized based on the technical merits when it is more likely than not that the position will be sustained upon examination. The recognition
and measurement of tax benefits requires significant judgment that might change as new information becomes available. If our financial results or other relevant facts change, thereby impacting the
likelihood of realizing the tax benefit of an uncertain tax position, significant judgment would be applied in determining the effect of the change on our valuation allowance.
Pension and Other Post-retirement Benefits
We sponsor several pension plans for certain salaried and hourly employees, and bargaining unit pension plans covering retirees and vested former
employees of the Company. Accounting for pensions and other post-retirement benefits involves estimating the cost of future benefits and attributing the cost over the employees' expected
periods of employment with the Company. The determination of our obligation and expense for these costs requires certain assumptions (see Note 7 to the consolidated financial statements). These
assumptions include, among others, the discount rate, expected long-term rate of return on plan assets and health care cost trend rates and are subject to change. While we believe that the
assumptions used are appropriate, significant differences in results or significant changes in our assumptions may materially affect the pension and other post-retirement obligations and
related future expense.
Changes
in key assumptions for our pension and other post-retirement benefits plans would have the following effects for the year ended January 1, 2011:
Discount
Rate—Holding all other assumptions constant, a one percentage point increase or decrease in the discount rate assumption for fiscal 2010 would have decreased or increased net
periodic benefit cost in fiscal 2011 by approximately $0.8 million with no impact on post-retirement benefits. In addition, a one percentage point increase in the discount rate
would decrease the pension and other post-retirement benefits obligation recorded at January 1, 2011 by approximately $13.5 million, of which $0.1 million relates to
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post-retirement
benefits, and a one percentage point decrease would increase the pension and other post-retirement benefits obligations recorded at January 1, 2011 by
approximately $16.4 million, of which $0.1 million relates to post-retirement benefits.
Expected
Long-Term Rate of Return—A one percentage point increase or decrease in the expected long-term rate of return assumption for fiscal 2010, holding all other
assumptions constant, would increase or decrease our net periodic benefit cost for the year ended January 1, 2011 by approximately $0.6 million, with no impact on
post-retirement benefits.
Health
Care Cost Trend Rates—A one percentage point increase or decrease in the initial assumed health care trend rate through ultimate assumed health care trend rates would have an
immaterial effect on the accumulated post-retirement benefit obligation at January 1, 2011.
Stock-based Compensation Expense
Awards granted
Certain of our employees and directors have been granted awards to purchase limited partner common units in the Sponsor Limited Partnership
("partnership units"). These awards include options to purchase partnership units ("options") and restricted partnership units ("restricted units").
The
exercise prices of the options granted were established by the non-executive directors of the Sponsor Holding Company's board of managers who have historically functioned as the
Company's compensation committee.
Award valuation and recognition of compensation expense
The fair values of all option and restricted unit awards, which we refer to as stock-based payment awards, are determined as of their grant date. We
estimate the fair value of each option award using the Black-Scholes option pricing model. This model requires the use of the following assumptions: (i) expected volatility, which is based on a
peer group of publicly traded entities over a period consistent with the expected terms of the options; (ii) expected life of the option award, which is determined based on management's best
estimate of when vested awards are expected to be exercised; (iii) expected dividend yield, which is 0%, as we do not anticipate paying dividends in the foreseeable future; (iv) the
risk-free interest rate, which is based on the U.S. Treasury yield curve in effect at the time of grant consistent with the option's expected life; and (v) the fair value of the
partnership units, which is based on the determination of our enterprise value. If any of the assumptions used in the Black-Scholes model changes significantly, stock-based compensation for future
awards may differ materially from previously granted awards.
The
weighted average assumptions used in the Black-Scholes model for fiscal 2008 and 2010 and for the six months ended July 2, 2011 are as follows:
Fiscal 2008
Fiscal 2010
Six months
ended July 2,
2011
Expected volatility
72
%
65
%
80
%
Risk-free interest rate
3.2
%
1.4
%
2.4
%
Expected term (in years)
6.5
6.0
6.0
Dividend yield
0.0
%
0.0
%
0.0
%
No options were granted during fiscal 2009.
The
grant date fair value of stock-based payment awards is recognized as compensation expense using the straight line method, net of estimated forfeitures, over the vesting period. Option and
restricted unit awards
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vest
ratably over a 2- to 5-year period beginning with the first anniversary of the grant date. We estimate forfeitures based on our historical forfeiture of stock-based
payment awards adjusted to reflect future changes in facts and circumstances, if any. We will revise our estimated forfeiture rate if actual forfeitures differ from our initial estimates.
Exchange event
On October 8, 2010, certain employees and directors holding options (vested or unvested at that date) were given an offer to either retain
their existing options with the originally issued terms or surrender their options for $0.53 in cash for each vested option payable immediately as well as $0.53 in cash for each unvested option
payable upon completion of that unvested option's original service-based vesting condition.
Also
on October 8, 2010, the remaining employees and directors holding options (vested or unvested at that date) were given an offer to surrender all of their existing options (vested or
unvested at that date) in exchange for a combination of new options and new restricted units. As of October 8, 2010, 4,562,000 options were outstanding and the holders thereof elected the
following:
Action taken
Options
Vested options surrendered for cash
565,000
Unvested options surrendered for cash upon vesting
331,000
Options exchanged for new options and restricted units
3,630,000
Original options retained
36,000
As a result, employees received $299,450 in cash for vested options surrendered and were entitled to $175,430 in cash for unvested options to be paid as those
options vest under their original terms. The consideration given for the vested options surrendered was in excess of the surrender date fair value by $175,610, and this amount was recognized as
compensation expense in 2010. As future service is required for payment of the options unvested as of October 8, 2010, we determined that the transaction was a modification under ASC 718
that changes the award classification from equity to liability. Incremental compensation cost for these modified awards, measured as the excess of their fair value over the fair value of the original
awards immediately before the terms were modified, was not material.
A
total of 13,460,500 new options were issued and 3,337,500 new restricted units were issued in connection with the exchanges. We determined the issuance of new options and new restricted units was a
modification under ASC 718 for substantially all of the exchanged options. Accordingly, we measured the incremental fair value of consideration given for these modified awards over that of the
options tendered and determined there to be $6.8 million of additional value. This additional stock-based compensation, as well as $1.6 million of unrecognized stock-based compensation
related to the options tendered in the modification, will be recognized over the vesting period of the new options and new restricted units using the straight-line method.
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Options granted
During fiscal 2010 and 2008 and the six months ended July 2, 2011, we granted options with exercise prices as follows:
Grant date
Options granted
Exercise price
per option
Partnership unit
fair value
Option grant date
fair value
per option
January 29, 2008
1,145,000
$
1.22
$
2.07
$
1.46
April 30, 2008
1,625,000
$
1.22
$
1.45
$
1.08
October 8, 2010
13,460,500
$
0.49
$
0.63
$
0.41
January 22, 2011
96,100
$
0.49
$
0.83
$
0.64
Restricted units granted
During fiscal 2010 and the six months ended July 2, 2011, we granted restricted units as follows:
Grant date
Restricted units
granted
Partnership unit
fair value
Restricted unit
grant date fair
value per unit
October 8, 2010
3,337,500
$
0.63
$
0.63
January 22, 2011
54,700
$
0.83
$
0.83
Stock-based compensation recognized
We recorded stock-based compensation expense of $2.2 million, $1.8 million, $1.2 million, and $1.2 million for fiscal
2010, 2009, 2008 and the six months ended July 2, 2011, respectively.
Based
upon the assumed initial public offering price of $             per share, the aggregate intrinsic value of the 13,496,500 options outstanding as of July 2, 2011 was
$              million, of which $              million related to vested options and
$              million related to unvested options. The aggregate intrinsic value of
the 12,296,500 options outstanding as of July 2, 2011 was $              million, of which
$              million related to vested options and $              million
related to unvested options.
Approach to valuation of partnership units
In conducting the valuation of the partnership units, we used a methodology that is consistent with the methods outlined in the AICPA Practice Aid
Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the "Practice Aid"). These valuations were prepared contemporaneous with the grant of stock-based
payment awards granted by us. In preparing the 2010 consolidated financial statements, we determined the contemporaneous valuations did not appropriately consider the rights and preferences of the
Company's and the Sponsor Limited Partnership's share and partner unit classes, respectively. Accordingly, during 2011, we performed retrospective valuations to estimate the fair value of the
partnership units underlying the stock-based payment awards at each significant historical stock-based payment award date. The revised fair values were utilized to prepare our financial statements for
all periods affected.
The
enterprise value inputs associated with our valuations were derived using the income and market approaches. The income approach estimates our enterprise value by discounting the expected future
cash flows to present value. Under the market approach, our total enterprise value is estimated by comparing our business to similar businesses whose securities are actively traded in public markets,
or businesses that are involved in a public or private transaction. We have selected valuation multiples derived from trading
54
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Management's Discussion and Analysis of Financial Condition and Results of Operations
multiples
of public companies that participate in our industry. These valuation multiples were then applied to the equivalent financial metric of our business, giving consideration to differences
between our Company and similar companies for such factors as company size, financial leverage, and growth prospects.
We
prepared financial forecasts to be used in the computation of the enterprise value for the income approach for each valuation date. The financial forecasts took into account our past experience and
future expectations. There is inherent uncertainty in these estimates. The risks associated with achieving our forecasts were assessed in selecting the appropriate discount rates. If different
discount rates had been used, the valuations would have been different. The fair value of our debt was then subtracted from the calculated enterprise value. The resulting equity value was then
allocated among the instruments that comprise our capital structure based upon rights and preferences of the instruments using the option-pricing method. As all of the allocated value associated with
these instruments would be available to the Sponsor Limited Partnership, the option-pricing method was used to allocate the equity value of the Company among the varying partner interests of the
Sponsor Limited Partnership, including the partnership units underlying our stock-based payment awards. The allocation was based on a series of call options using the Black-Scholes option pricing
model.
The
option-pricing method involves making estimates of the anticipated timing of a potential liquidity event such as a sale of our Company or an initial public offering, and estimates of the
volatility of the partnership units. The anticipated timing is based on the plans of our board and management. Estimating the volatility of the share price of a privately held company is complex
because there is no readily available market for the shares. We estimated the volatility of the partnership units based on available information on volatility of stocks of publicly traded companies in
the industry. Had we used different estimates of volatility, the resulting value of the partnership units would have been different.
A
discussion of significant factors and assumptions in determining the estimated fair value of our stock-based payment awards granted between December 27, 2007 and July 2, 2011 is
provided below:
Valuation of partnership units as of January 29, 2008
We performed a retrospective valuation of the partnership units of the Sponsor Limited Partnership as of January 29, 2008 and estimated the
fair market value to be $2.07 per unit as of that date. To estimate our enterprise value, we used the discounted cash flow ("DCF") methodology for the income approach and a combination of the
guideline public company methodology and the guideline transaction methodology for the market approach, as described above.
For
the DCF methodology, we prepared annual forecasts of our future cash flows through December 2015 and applied a terminal value based on the constant growth dividend model to estimate the total
value of the cash flows beyond the final year. Our forecasts of future cash flows were based on our estimated net debt-free cash flows. These cash flows were then discounted to the
valuation date at an estimated weighted average cost of capital. Our cost of capital was derived by applying the widely-used capital asset pricing model ("CAPM"). We believe that the
procedures employed in the DCF methodology, including estimating the net debt-free cash flows, weighted average cost of capital, discount rate and terminal value, were reasonable and
consistent with the Practice Aid.
For
the guideline public company methodology, we selected, as of the valuation date, a range of trading multiples for a group of comparable public companies manufacturing components of printed circuit
boards such as laminates and related materials that, at the time, we considered to be most comparable to us based on size and business model. We focused primarily on a subset of companies within the
broader company group, as we believe their operations are the most comparable to our own.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
For
the guideline transaction methodology, we observed a range of implied multiples reflecting the ratio of the purchase price paid in the transactions to the target companies' trailing
12 months financial metrics prior to the acquisition date for comparable companies in the laminate and electronics industry that had recently been sold. We selected a multiple consistent with
our relative profitability compared with the transaction companies.
The
valuations resulting from the foregoing methodologies were then combined to determine an estimated overall enterprise value. In estimating our enterprise value, we weighted the income and market
approaches equally. Within the market approach, we gave greater weight to the guideline public company method compared with the guideline transaction methodology based on the relative reliability of
the methods and underlying data.
For
the January 29, 2008 retrospective valuation, we calculated total allocable equity value by subtracting the fair value of our debt from the enterprise value. We then allocated the equity
value using the option-pricing method based upon rights and preferences of the various financial instruments. Accordingly, the value of the partnership units was determined by calculating its
allocation of value based on their rights. In order to determine the allocation break points, we made estimates of the anticipated timing of a potential liquidity event and estimates of the volatility
of our equity securities. The anticipated timing was based on our plans toward the liquidity event and on our board of directors' judgment. Estimating the volatility of the stock price of a privately
held company is complex because there is no readily available market for the shares. We estimated the volatility of our stock based on available information on volatility of stocks of publicly traded
companies in the industry.
After
allocating the value of the Company's equity classes, and applying a marketability discount of 22%, we determined the estimated fair value attributable to the partnership units was $2.07 per
unit as of January 29, 2008. The discount for lack of marketability reflects the lower value placed on securities that are not freely transferable, as compared to those that trade frequently in
an established market. The marketability discount was based on an at-the-money Black-Scholes put option analysis, assuming a dividend yield of zero; a maturity of one year; a
risk-free rate of 2.3%, which was equal to the rate on U.S. Treasury bills matching the expected term; and an annualized volatility of 60%, which was the average volatility of the
comparable public companies adjusted for relative leverage over a period equal to the expected term.
The
methodology and factors used in estimating the partnership unit value on other stock award grant dates were largely consistent with the discussion above. Significant changes in assumptions and
factors impacting partnership unit value for other stock award grant dates are discussed below.
Valuation of partnership units as of April 30, 2008
On April 30, 2008, the fair value of a partnership unit of the Sponsor Limited Partnership was determined to be $1.45 per unit. Volatility of
the selected guideline public companies increased as compared with January 29, 2008 as stock prices recovered somewhat from the prior period declines. The weighted average cost of capital also
increased primarily due to the increased volatility in guideline stock prices.
Our
overall outlook for the Company was also decreasing at this time due to the declining revenue and profitability. As a result, we selected lower multiples for the guideline public company method.
We
calculated total allocable equity value by subtracting the fair value of our debt from the enterprise value. We then allocated the equity value using the option-pricing method based upon rights and
preferences of the various equity classes and applied a marketability discount of 30%, which was higher due to increased volatility. The resulting estimated fair value attributable to the partnership
units was $1.45 per unit, which we determined to be the fair value of our partnership units as of April 30, 2008.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Valuation of partnership units as of October 8, 2010
On October 8, 2010, the fair value of a partnership unit of the Sponsor Limited Partnership was determined to be $0.63 per unit. Compared with
April 2008, our historical financial results and future outlook were improving. Volatility and cost of capital inputs were similar compared with April 2008. Stock prices of reference guideline
companies and their financial performance continued to be relatively low, resulting in lower market price multiples that were offset by our better performance than in the prior periods. As a result,
the market-based methods indicated higher values for the business enterprise value of the Company.
We
calculated total allocable equity value by subtracting the fair value of our debt from the enterprise value. While debt increased, the primary reason for the decline in per unit value compared to
April
2008 was the issuance of additional partnership units in conjunction with the financing transaction that took place in September 2010 (see Note 4 of the annual financial statements). The total
economic interests at the partnership unit level increased over 2.5 times, which diluted the per unit value. After allocating the value of the equity classes, and applying a marketability discount of
28%, the estimated fair value attributable to the partnership units was determined to be $0.63 per unit as of October 8, 2010.
Valuation of partnership units as of January 22, 2011
On January 22, 2011, we granted stock options and restricted units to certain key employees. The fair value of a partnership unit as of that
date was determined to be $0.83 per unit, and was based upon retrospective valuations performed as of January 1, 2011 and April 2, 2011. The financial statement impact of these
stock-based awards is immaterial.
The
judgments made in determining the volatility and risk-free rate assumptions to be used in calculating the estimated grant date fair value of the stock option awards are consistent with
the judgments made in determining such inputs for the partnership units valuations.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
RESULTS OF OPERATIONS
The following table sets forth selected results of operations data for the periods presented and as a percentage of our revenue for those periods:
Six months ended
Fiscal year
July 2, 2011
June 26, 2010
2010
2009
2008
Amount
% of
Revenue
Amount
% of
Revenue
Amount
% of
Revenue
Amount
% of
Revenue
Amount
% of
Revenue
(dollars in thousands)
Revenue
$
316,583
100
%
$
306,957
100
%
$
611,987
100.0
%
$
416,140
100.0
%
$
570,333
100.0
%
Cost of goods sold
240,433
75.9
%
231,908
75.6
%
467,751
76.4
%
330,584
79.4
%
487,052
85.4
%
Gross profit
76,150
24.1
%
75,049
24.4
%
144,236
23.6
%
85,556
20.6
%
83,281
14.6
%
Operating expenses
Sales, general and administrative
38,371
12.1
%
31,343
10.2
%
65,271
10.7
%
59,656
14.3
%
62,763
11.0
%
Research and development
5,193
1.6
%
4,817
1.6
%
9,532
1.6
%
9,244
2.2
%
10,663
1.9
%
Restructuring
177
0.1
%
3,464
1.1
%
4,782
0.8
%
18,129
4.4
%
7,692
1.3
%
Goodwill impairment
—
0.0
%
—
0.0
%
—
0.0
%
—
0.0
%
8,513
1.5
%
Total operating expenses
43,741
13.8
%
39,624
12.9
%
79,585
13.0
%
87,029
20.9
%
89,631
15.7
%
Operating income / (loss)
32,409
10.2
%
35,425
11.5
%
64,651
10.6
%
(1,473
)
(0.4
)%
(6,350
)
(1.1
)%
Other income—net
1,031
0.3
%
3,005
1.0
%
2.020
0.3
%
224
0.1
%
2,768
0.5
%
Embedded derivative gain / (loss)
17,472
5.5
%
(58,162
)
(18.9
)%
25,030
4.1
%
(27,513
)
(6.6
)%
115,352
20.2
%
Interest expense
(39,032
)
(12.3
)%
(26,997
)
(8.8
)%
(72,134
)
(11.8
)%
(54,620
)
(13.1
)%
(58,478
)
(10.3
)%
Interest income
94
0.0
%
159
0.1
%
339
0.1
%
453
0.1
%
1,307
0.2
%
Foreign exchange gain / (loss)—net
(20,402
)
(6.4
)%
27,863
9.1
%
9,596
1.6
%
(2,116
)
(0.5
)%
(341
)
(0.1
)%
Income / (loss) from continuing operations, before income taxes
(8,428
)
(2.7
)%
(18,707
)
(6.1
)%
29,502
4.8
%
(85,045
)
(20.4
)%
54,258
9.5
%
Provision for income taxes
(10,679
)
(3.4
)%
(11,818
)
(3.9
)%
(24,420
)
(4.0
)%
(6,504
)
(1.6
)%
(6,804
)
(1.2
)%
Net income / (loss) from continuing operations
$
(19,107
)
(6.0
)%
$
(30,525
)
(9.9
)%
$
5,082
0.8
%
$
(91,549
)
(22.0
)%
$
47,454
8.3
%
Six Months Ended July 2, 2011 Compared to Six Months Ended June 26, 2010
Overview
—Although unit demand was less robust, overall revenues increased modestly for
the six months ended July 2, 2011 compared to the six months ended June 26, 2010; however, the six months ended July 2, 2011 were unfavorably affected by incremental
$4.6 million operating expenses related to preparation for our initial public offering, and overall operating income was $3.0 million, or 8.5%, lower than in the comparable prior year
period.
Revenue—
Six months ended
Change
June 26, 2010
July 2, 2011
Amount
%
(dollars in thousands)
Asia
$
185,165
$
176,480
$
8,685
4.9
%
Americas
56,856
63,747
(6,891
)
(10.8
)%
Europe
74,562
66,730
7,832
11.7
%
Total revenue
$
316,583
$
306,957
$
9,626
3.1
%
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Total revenue was $316.6 million for the six months ended July 2, 2011 compared to $307.0 million for the six months ended June 26,
2010, an increase of $9.6 million, or 3.1%.
Revenues
in Asia for the six months ended July 2, 2011 increased $8.7 million, or 4.9%, over the comparable prior year period, driven by improved unit volumes of
high-performance products, even though unit volumes of non-high-performance products and overall unit volumes lagged compared to the prior year period. Revenue for
the six months ended July 2, 2011 also benefited from higher pricing to recover increased costs of raw materials.
Revenues
in the Americas were $6.9 million, or 10.8%, lower for the six months ended July 2, 2011 versus last year's comparable period. Lower unit volumes and lower revenues reflect the
weaker economic conditions in the United States in the current year period. In contrast, fundamental demand for electronics in the comparable prior year period was bolstered by inventory restocking of
basic materials within the supply chain.
Revenues
in Europe were $7.8 million, or 11.7%, higher for the six months ended July 2, 2011 versus the comparable period of 2010. Revenues for the current year were bolstered by sales
to customers in the solar energy and industrial sectors. A stronger euro to U.S. dollar exchange rate in the current year period accounted for approximately $4.2 million, or just more than
half, of the increased revenue.
Demand
for our high-performance products continued to outpace demand for standard products. The relatively stronger demand for our high-performance products reflects our
continued marketing focus on these products and success in getting them qualified for new applications. Demand for these high-performance products is also relatively price-inelastic,
providing better opportunities to pass through material cost increases.
Cost of goods sold and gross profit—
Six months ended
July 2, 2011
June 26, 2010
Change
% of
Revenue
% of
Revenue
Amount
Amount
Amount
%
(dollars in thousands)
Cost of goods sold
$
240,433
75.9
%
$
231,908
75.6
%
$
8,525
3.7
%
Gross profit
$
76,150
24.1
%
$
75,049
24.4
%
$
1,101
1.5
%
Cost of goods sold was $240.4 million for the six months ended July 2, 2011, an increase of $8.5 million, or 3.7%, over the comparable
prior period driven mainly by higher costs for raw material
and labor, partially offset by lower unit volumes and lower attendant variable manufacturing costs. Our gross margin was slightly lower for the six months ended July 2, 2011 at 24.1% compared
to 24.4% gross margin achieved in the comparable prior year period due to the higher costs for raw material and labor; however, these increased costs were partially offset by an increased percentage
of sales of higher margin, high-performance products in 2011, as well as from pricing actions to pass through higher raw material costs to our customers.
Operating expenses
—Overall, operating expenses increased by $4.1 million, or 10.4%, for the six months ended July 2, 2011 compared to the six months
ended June 26, 2010. The increase in operating expenses
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Management's Discussion and Analysis of Financial Condition and Results of Operations
was
due to higher sales, general and administrative expenses and research and development expenses, partially offset by lower restructuring expenses, as more fully described below.
Six months ended
July 2, 2011
June 26, 2010
Change
% of
Revenue
% of
Revenue
Amount
Amount
Amount
%
(dollars in thousands)
Sales, general and administrative expense
$
38,371
12.1
%
$
31,343
10.2
%
$
7,028
22.4
%
Research and development expense
5,193
1.6
%
4,817
1.6
%
376
7.8
%
Restructuring expense
177
0.1
%
3,464
1.1
%
(3,287
)
(94.9
)%
Total operating expenses
$
43,741
13.8
%
$
39,624
12.9
%
$
4,117
10.4
%
Sales, general and administrative expense.
SG&A expense increased to $38.4 million (12.1% of revenue) for the six months ended July 2, 2011 from
$31.3 million (10.2% of revenue) in the comparable prior year period. The increase in SG&A expense was primarily due to higher audit fees, which increased $3.1 million, and legal and
consulting fees, which were $1.7 million higher than the prior year period. The increase in these fees is primarily related to this offering.
Research and development expense.
R&D expense increased 7.8% to $5.2 million for the six months ended July 2, 2011 from $4.8 million for the
six months ended June 26, 2010. The increase in R&D expense was primarily due to higher personnel-related expenses.
Restructuring expense.
Restructuring expense was $0.2 million for the six months ended July 2, 2011, versus $3.5 million in the comparable
prior year period. This steep reduction of $3.3 million reflects the substantial completion of our restructuring activities in the prior year. The minimal restructuring expense for the six
months ended July 2, 2011 is primarily for ongoing maintenance expenses related to the previous closures of various facilities.
Operating income / (loss)
Six months ended
July 2, 2011
June 26, 2010
Change
% of
Revenue
% of
Revenue
Amount
Amount
Amount
%
(dollars in thousands)
Asia
$
32,569
10.3
%
$
33,997
11.1
%
$
(1,428
)
(4.2
)%
Americas
7,957
2.5
%
9,696
3.2
%
(1,739
)
(17.9
)%
Europe
6,299
2.0
%
1,775
0.6
%
4,524
254.9
%
Corporate
(14,416
)
(4.6
)%
(10,043
)
(3.3
)%
(4,373
)
43.5
%
Total operating income / (loss)
$
32,409
10.2
%
$
35,425
11.5
%
$
(3,016
)
(8.5
)%
Operating income was $3.0 million, or 8.5%, lower in the first half of 2011 compared to the first half of 2010. Revenue and operating income in the
current period benefited from an improved product mix and more aggressive pricing actions to recover higher costs of raw materials than in the prior year period, all of which more than offset the
impacts of lower unit volume. Operating income was also unfavorably impacted by the increase in audit, legal and consulting fees related to this offering.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
In
Asia, despite higher revenues in the current year period, operating income was $1.4 million lower than in the prior year period as a result of lower gross margins, despite an improved
product mix, due to higher material costs not fully passed through to customers and inflationary pressures on utilities and other factory inputs.
Operating
income in the Americas in the 2011 period was $1.7 million below the comparable prior year period as a result of the unfavorable profit impact of lower revenues. This was moderated by
an improved gross margin, arising from a favorable product mix, and lower operating expenses. However, pricing to pass through material cost increases, without an additional profit component, has the
arithmetic effect of diluting gross margin.
Operating
income in Europe was $4.5 million higher in the first half of 2011 compared to the first half of 2010. Revenue and operating income in the first half of 2011 benefited from more
aggressive pricing actions to recover higher costs of raw materials than in the comparable prior year period, which offset the impact of lower unit volumes.
Corporate
reflects administrative, legal, sales and marketing, and research and development expenses. The increased Corporate operating loss for the first six months of 2011 compared to the first six
months of 2010 was primarily due to higher SG&A expense incurred for outside professional services related to the Company's decision to proceed with an IPO.
Other non-operating income / (expense)
Six months ended
July 2, 2011
June 26, 2010
Change
% of
Revenue
% of
Revenue
Amount
Amount
Amount
%
(dollars in thousands)
Other income—net
$
1,031
0.3
%
$
3,005
1.0
%
$
(1,974
)
(65.7
)%
Embedded derivative gain / (loss)
17,472
5.5
%
(58,162
)
(18.9
)%
75,634
130.0
%
Interest expense
(39,032
)
(12.3
)%
(26,997
)
(8.8
)%
(12,035
)
(44.6
)%
Interest income
94
0.0
%
159
0.1
%
(65
)
(40.9
)%
Foreign exchange gain / (loss)—net
(20,402
)
(6.4
)%
27,863
9.1
%
(48,265
)
(173.2
)%
Total non-operating income / (expense)
$
(40,837
)
(12.9
)%
$
(54,132
)
(17.6
)%
$
13,295
24.6
%
Other income—net.
Other income—net decreased to $1.0 million for the six months ended July 2, 2011 from $3.0 million
for the six months ended June 26, 2010. The comparable prior year period included a gain of $3.0 million from a favorable settlement of a matter related to our intellectual property
rights.
Embedded derivative gain / (loss).
The embedded derivative gain / (loss) reflects any change in the values of the embedded derivatives in some of our financial
instruments. The change in value is determined quarterly. The conversion feature of the convertible preferred certificates and the mandatory pre-payment features of the senior secured
credit agreement and mezzanine credit agreement are considered embedded derivatives. There was an embedded derivative gain of $17.5 million for the six months ending July 2, 2011, of
which $11.9 million related to the convertible preferred certificates and $5.6 million related to the loans under the senior secured credit agreement and mezzanine credit agreement. For
the six months ended June 25, 2010, we recorded an embedded derivative loss of $58.2 million, all of which related to the convertible preferred certificates.
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Our
Sponsors will effectively convert their investments in Isola from convertible preferred certificates to ordinary shares in connection with this offering, and thereafter we will not incur further
financial effects related to the convertible preferred certificates. However, any change in the value of the embedded derivative of the convertible preferred certificates as of the date the offering
is completed will be included in this account in the period in which the offering occurs.
Interest expense and interest income.
Total interest expense increased $12.0 million, or 44.6%, to $39.0 million for the six months ended
July 2, 2011 from $27.0 million for the six months ended June 26, 2010. The increase in interest expense is due to the amortization in the current quarter of OID and deferred loan
origination fees related to our senior secured and mezzanine credit agreements as well as the higher outstanding principal debt balances under these facilities compared to the amounts outstanding
under the credit agreements in place last year. Interest expense for the six months ended July 2, 2011 included $5.0 million of OID amortization ($2.1 million related to our
senior secured debt and $2.9 million related to our mezzanine debt) as well as $1.0 million amortization of loan origination costs.
Foreign exchange gain / (loss)—net.
We recorded a net foreign exchange loss of $20.4 million for the six months ended July 2, 2011
compared to a net foreign exchange gain of $27.9 million for the six months ended June 26, 2010. The change was primarily driven by the weakened euro versus the U.S. dollar in the
current period.
Provision for income taxes
Six months ended
July 2, 2011
June 26, 2010
Change
% of
Revenue
% of
Revenue
Amount
Amount
Amount
%
(dollars in thousands)
Net income / (loss) before tax
$
(8,428
)
(2.7
)%
$
(18,707
)
(6.1
)%
$
10,279
54.9
%
Tax provision
$
(10,679
)
(3.4
)%
$
(11,818
)
(3.9
)%
$
1,139
9.6
%
Effective tax rate
(126.7
)%
(63.2
)%
(63.5
)%
The effective tax rates for each of the six months ended July 2, 2011 and June 26, 2010 was based on our forecasted annualized effective tax rates
and adjusted for discrete items that occurred within the periods. The forecasted annualized effective rates are (146.3%) and (60.3%) for the six months ended July, 2, 2011 and June 26, 2010,
respectively. Our provision for income taxes decreased primarily as a result of the change in the mix of earnings among the tax jurisdictions in which we operate.
Fiscal Year 2010 Compared to Fiscal Year 2009
Overview
—The worldwide demand for our products, which had begun to recover in the third quarter of 2009, continued to improve in 2010. The Company was
well-positioned to benefit from the economic recovery as a result of improved manufacturing capacity utilization and cost reduction measures implemented in the prior year.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Revenue—
Fiscal year
Change
2010
2009
Amount
%
(dollars in thousands)
Asia
$
349,421
$
226,588
$
122,833
54.2
%
Americas
129,109
100,275
28,834
28.8
%
Europe
133,457
89,277
44,180
49.5
%
Total revenue
$
611,987
$
416,140
$
195,847
47.1
%
Total revenue increased by $195.8 million, or 47.1%, from 2009 to 2010, reflecting improvement in the global economy boosted by the restocking of
inventory within the electronics supply chain. Revenue in each geographic segment benefited from higher unit volumes, higher pricing, and a more favorable sales mix, reflecting an increased percentage
of sales of high-performance products in 2010 as compared to 2009. Revenue in Asia increased $122.8 million, or 54.2%; revenue in the Americas increased $28.8 million, or
28.8%; and revenue in Europe increased $44.2 million, or
49.5%. The revenue increase in Europe was moderated by the weaker average euro to U.S. dollar exchange rate during 2010 compared to 2009.
Demand
for our high-performance products outpaced demand for standard products, with gross sales for our high-performance products increasing 52.9%
year-over-year. Gross sales from our high-Tg, lead-free and high-speed digital product lines, as described in "Business—Product
Markets and Product Applications", increased by 63.2% and 98.7%, respectively, in 2010.
Gross
sales for our high-performance and standard products are shown below:
Fiscal year
Change
Gross Sales
(1)
2010
2009
Amount
%
(dollars in thousands)
High-performance
High-Tg, lead-free
$
285,635
$
175,066
$
110,569
63.2
%
High-speed digital
94,662
47,630
47,032
98.7
%
Military, specialty and other
117,615
103,026
14,589
14.2
%
Total high-performance
497,912
325,722
172,190
52.9
%
Standard
131,023
102,444
28,579
27.9
%
Total gross sales
$
628,935
$
428,166
$
200,769
46.9
%
(1)
Gross sales represents total revenue excluding certain adjustments for cash discounts, rebates, and other sales adjustments that cannot be allocated to a specific product segment.
These adjustments totaled $16.9 million in 2010 and $12.1 million in 2009 respectively. Total revenue was $612.0 million for 2010 and $416.1 million in 2009. Management
uses gross sales as a measure of operating performance.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Cost of goods sold and gross profit—
Fiscal year
2010
2009
Change
% of
revenue
% of
revenue
Amount
Amount
Amount
%
(dollars in thousands)
Cost of goods sold
$
467,751
76.4
%
$
330,584
79.4
%
$
137,167
41.5
%
Gross profit
$
144,236
23.6
%
$
85,556
20.6
%
$
58,680
68.6
%
Cost of goods sold increased by $137.2 million, or 41.5%, from 2009 to 2010, primarily as a result of increased manufacturing volumes. Our gross profit
increased to 23.6% in 2010 from 20.6% in 2009, representing a 3.0 percentage point improvement. This improvement in gross profit resulted primarily
from the better manufacturing capacity utilization combined with an increased percentage of sales of our higher margin, high-performance products in 2010.
Operating expenses.
Overall, operating expenses decreased $7.4 million from 2009 to 2010, representing an 8.6% decrease, primarily due to lower
restructuring expense, as described below.
Fiscal year
2010
2009
Change
% of
revenue
% of
revenue
Amount
Amount
Amount
%
(dollars in thousands)
Sales, general and administrative expense
$
65,271
10.7
%
$
59,656
14.3
%
$
5,615
9.4
%
Research and development expense
9,532
1.6
%
9,244
2.2
%
288
3.1
%
Restructuring expense
4,782
0.8
%
18,129
4.4
%
(13,347
)
(73.6
)%
Total operating expenses
$
79,585
13.0
%
$
87,029
20.9
%
$
(7,444
)
(8.6
)%
Sales, general and administrative expense.
SG&A expense increased by $5.6 million from 2009 to 2010, representing a 9.4% increase. The increase in SG&A
expense is attributable to higher personnel costs, due to higher variable incentive compensation (bonus), and professional fees which were offset by a decrease in bad debt expense. In fiscal 2009,
cost reduction measures, including compensation-related measures, were taken as our revenue declined. In fiscal 2010, we saw an increase in sales and were able to reinstitute our bonus program which
allowed us to award $4.1 million in bonuses and increase salaries by $3.6 million worldwide. Other professional fees increased by $0.9 million in fiscal 2010 as we began investing
in new information technology projects. Fiscal 2009 also was adversely impacted by the write-off of $2.8 million of uncollectible accounts receivable.
Restructuring expense.
Restructuring expense decreased by $13.3 million from 2009 to 2010. In 2009, we incurred substantial expenses in connection with the
closure of facilities in Fremont, California, and Dalian, China, and professional fees related to these closures. In 2010, restructuring expense consisted primarily of professional fees related to
financial restructuring activities and some residual expenses related to the previous year's facility closures.
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Operating income / (loss)
Fiscal year
2010
2009
Change
% of
revenue
% of
revenue
Amount
Amount
Amount
%
(dollars in thousands)
Asia
$
58,777
9.6
%
$
21,755
5.2
%
$
37,022
170.2
%
Americas
16,900
2.8
%
2,561
0.6
%
14,339
559.9
%
Europe
3,958
0.6
%
(8,578
)
(2.1
)%
12,536
146.1
%
Corporate
(14,984
)
(2.4
)%
(17,211
)
(4.1
)%
2,227
12.9
%
Total operating income / (loss)
$
64,651
10.6
%
$
(1,473
)
(0.4
)%
$
66,124
4,489.1
%
Consolidated operating income increased to $64.7 million in fiscal 2010, up substantially from a loss of $1.5 million in the prior year. Operating
income improved in each geographic segment due to higher revenue in fiscal 2010 compared to fiscal 2009, as a result of rebounding economic conditions, increasing demand for electronic products and
restocking of depleted PCB material inventories by some of our customers.
Operating
income in each segment also benefitted from higher rates of manufacturing capacity utilization and the increased percentages in overall sales of higher margin, high-performance
products. The Corporate operating loss decreased to a loss of $15.0 million in fiscal 2010 from a loss of $17.2 million in the prior year. This was primarily a result of lower
restructuring expense in 2010, partially offset by greater expense associated with variable incentive compensation awards that were reinstituted in 2010.
Other non-operating income / (expense)
Fiscal year
2010
2009
Change
% of
revenue
% of
revenue
Amount
Amount
Amount
%
(dollars in thousands)
Other income / (expense)—net
$
2,020
0.3
%
$
224
0.1
%
$
1,796
801.8
%
Embedded derivative gain / (loss)
25,030
4.1
%
(27,513
)
(6.6
)%
52,543
191.0
%
Interest expense
(72,134
)
(11.8
)%
(54,620
)
(13.1
)%
(17,514
)
(32.1
)%
Interest income
339
0.1
%
453
0.1
%
(114
)
(25.2
)%
Foreign exchange gain / (loss)—net
9,596
1.6
%
(2,116
)
(0.5
)%
11,712
553.5
%
Total non-operating income (expense)
$
(35,149
)
(5.7
)%
$
(83,572
)
(20.1
)%
$
48,423
57.9
%
Other income—net.
Other income—net increased by $1.8 million from 2009 to 2010, primarily due to a gain of $3.0 million in
the current year from a favorable settlement of a matter related to our intellectual property rights.
Embedded derivative gain / (loss).
There was an embedded derivative gain of $25.0 million in 2010 compared to a loss of $27.5 million in 2009. The
conversion feature of the convertible preferred certificates and the mandatory pre-payment features of the senior secured credit agreement and mezzanine credit agreement are considered
embedded derivatives. In 2010, the embedded derivative gain related to the convertible preferred certificates was $21.7 million and the embedded derivative gain related to the senior
65
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Management's Discussion and Analysis of Financial Condition and Results of Operations
secured
credit agreement and mezzanine credit agreement was $3.3 million. In 2009, there was an embedded derivative loss of $27.5 million, all of which was related to the convertible
preferred certificates. Changes in the valuations of the Company from period to period account for the gains or losses in this account.
Interest expense and interest income.
Total interest expense increased by $17.5 million, or 32.1%, from 2009 to 2010. In fiscal 2010, we recorded
$9.5 million of additional interest on accrued interest on our first- and second-lien credit facilities. In addition, fiscal 2010 interest expense included $3.6 million of
PIK interest on our mezzanine debt, as well as $2.3 million of OID amortization expense, of which $1.0 million was attributable to the senior credit agreement and $1.3 million was
attributable to the mezzanine credit agreement in 2010. We also expensed $2.8 million of loan origination costs in 2010. At the end of fiscal 2010, the cash interest rate on our senior credit
agreement was 10.0%, and the interest rate on our mezzanine credit agreement was 16.0%, half payable in cash and half payable-in-kind ("PIK").
Foreign exchange gain / (loss)—net.
We recorded a net foreign exchange gain of $9.6 million in 2010, compared to a net foreign exchange loss of
$2.1 million in 2009. This change was primarily due to the strengthening of the U.S. dollar against the euro in 2010.
Provision for income taxes
Fiscal year
2010
2009
Change
% of
revenue
% of
revenue
Amount
Amount
Amount
%
(dollars in thousands)
Net income / (loss) before tax
$
29,502
4.8
%
$
(85,045
)
(20.4
)%
$
114,547
134.7
%
Tax provision
$
(24,420
)
(4.0
)%
$
(6,504
)
(1.6
)%
$
(17,916
)
(275.5
)%
Effective tax rate
82.8
%
(7.6
)%
90.4
%
Our provision for income taxes increased by approximately $17.9 million from 2009 to 2010, primarily due to an increase in the reserve recorded for
uncertain tax positions, and an increase of income earned in the taxable jurisdictions. Our effective tax rate was (7.6)% for 2009, as compared to 82.8% in 2010.
Fiscal Year 2009 Compared to Fiscal Year 2008
Overview—
Our operating results for 2009 were significantly impacted by the global
recession that began in 2008 and continued to deepen into the first half of 2009. We continued the implementation of various programs initiated in 2008 to improve manufacturing capacity utilization
and lower costs, and our operating results improved in the second half of 2009 as a result of the combination of these measures and improving economic conditions.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Revenue—
Fiscal year
Change
2009
2008
Amount
%
(dollars in thousands)
Asia
$
226,588
$
310,379
$
(83,791
)
(27.0
)%
Americas
100,275
132,987
(32,712
)
(24.6
)%
Europe
89,277
126,967
(37,690
)
(29.7
)%
Total revenue
$
416,140
$
570,333
$
(154,193
)
(27.0
)%
Total revenue decreased by $154.2 million to $416.1 million in 2009 from $570.3 million in 2008, a decrease of 27.0%. The reduction in
revenue was primarily attributable to the recessionary conditions that prevailed for most of 2009. Revenue in each geographic segment declined. Revenue in Asia decreased $83.8 or 27.0%; revenue in the
Americas decreased $32.7 million or 24.6%; and revenue in Europe decreased $37.7 million or 29.7%.
Demand
for our high-performance products proved more resilient to recessionary conditions than standard products, with gross sales of our high-performance products decreasing
21.0% year-over-year. Gross sales from our high-Tg, lead-free and high-speed digital product lines as described in
"Business—Product Markets and Product Applications" decreased by 14.1% and 2.1%, respectively, in 2009.
Gross
sales for our high-performance and standard products are shown below:
Fiscal year
Change
Gross Sales
(1)
2009
2008
Amount
%
(dollars in thousands)
High-performance
High-Tg, lead-free
$
175,066
$
203,834
$
(28,768
)
(14.1
)%
High-speed digital
47,630
48,635
(1,005
)
(2.1
)%
Military, specialty and other
103,026
159,967
(56,941
)
(35.6
)%
Total high-performance
325,722
412,436
(86,714
)
(21.0
)%
Standard
102,444
170,020
(67,576
)
(39.7
)%
Total gross sales
$
428,166
$
582,456
$
(154,290
)
(26.5
)%
(1)
Gross sales represents total revenue excluding certain adjustments for cash discounts, rebates, and other sales adjustments that cannot be allocated to a specific product segment.
These adjustments totaled $12.1 million in 2009 and $12.2 million in 2008 respectively. Total revenue was $416.1 million for 2009 and $570.3 million in 2008. Management
uses gross sales as a measure of operating performance.
Cost of goods sold and gross profit—
Fiscal year
2009
2008
Change
% of
revenue
% of
revenue
Amount
Amount
Amount
%
(dollars in thousands)
Cost of goods sold
$
330,584
79.4
%
$
487,052
85.4
%
$
(156,468
)
(32.1
)%
Gross profit
$
85,556
20.6
%
$
83,281
14.6
%
$
2,275
2.7
%
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Total cost of goods sold in 2009 decreased by $156.5 million, or 32.1%, compared to 2008, primarily as a result of lower levels of sales and production
in a recessionary environment. Gross margin, however, improved to 20.6% in 2009 from 14.6% in 2008. The improvement in gross margin resulted from the higher levels of manufacturing capacity
utilization in our remaining facilities following the closure of three facilities during 2009. Gross margin in 2009 also benefited from an improved product mix with revenue of higher margin,
high-performance products comprising a greater percentage of overall revenue. Although raw materials costs (especially for copper) increased steadily throughout 2009, we were generally
successful in passing through these increased costs to our customers.
Operating expenses.
Total operating expenses in 2009 decreased by $2.6 million, or 2.9%, from the prior year to $87.0 million. The absence in 2009 of
the goodwill impairment charge incurred in the prior year, lower expenditures for SG&A (arising from lower bad debt expense and a number of cost containment actions), and lower R&D expenses were only
partially offset by higher restructuring costs arising from the closure of two of our manufacturing facilities, as more fully described below.
Fiscal year
2009
2008
Change
% of
revenue
% of
revenue
Amount
Amount
Amount
%
(dollars in thousands)
Sales, general and administrative expense
$
59,656
14.3
%
$
62,763
11.0
%
$
(3,107
)
(5.0
)%
Research & development expense
9,244
2.2
%
10,663
1.9
%
(1,419
)
(13.3
)%
Restructuring expense
18,129
4.4
%
7,692
1.3
%
10,437
135.7
%
Goodwill impairment
—
8,513
1.5
%
(8,513
)
100.0
%
Total operating expenses
$
87,029
20.9
%
$
89,631
15.7
%
$
(2,602
)
(2.9
)%
Sales, general and administrative expense.
SG&A expense decreased by $3.1 million from 2008 to 2009, a 5.0% reduction. This was primarily attributable to
lower bad debt expense in 2009 compared to 2008. Bad debt expense in fiscal 2009 was $2.8 million compared to $8.2 million in fiscal 2008, a reduction of $5.4 million. A number of
our customers became insolvent during 2008 as a result of the recession. SG&A expense in fiscal 2009 also benefited approximately $1.9 million from a number of cost-saving measures,
including the suspension of matching grants for U.S. employees' 401(k) contributions, elimination of a company-wide bonus plan, mandatory salary reductions (where legally possible), staff
reductions and other cost-saving measures. Fiscal 2008 SG&A expense included a gain of $2.8 million related to the sale of land and buildings in the Philippines.
Research and development expense.
R&D expense decreased by $1.4 million, or 13.3%, from 2008 to 2009, primarily due to reduced purchases of materials,
supplies and services and lower personnel-related expense in Asia, all of which was partially offset by increased expense incurred in connection with the successful legal defense of our intellectual
property rights.
Restructuring expense.
Restructuring expense in 2009 increased $10.4 million, or 135.7%, over the
prior year, reflecting the costs of closing manufacturing facilities in Fremont, California and Dalian, China, and related professional fees.
Goodwill impairment.
In fiscal 2008 we recorded a non-cash charge of $8.5 million for the impairment of goodwill. The goodwill impairment was a
result of the reduction in business related to the general decline of the global economy. This charge reduced the goodwill balance to zero.
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Operating income / (loss)
Fiscal year
2009
2008
Change
% of
revenue
% of
revenue
Amount
Amount
Amount
%
(dollars in thousands)
Asia
$
21,755
5.2
%
$
27,684
4.9
%
$
(5,929
)
(21.4
)%
Americas
2,561
0.6
%
(11,884
)
(2.1
)%
14,445
121.5
%
Europe
(8,578
)
(2.1
)%
(6,523
)
(1.1
)%
(2,055
)
(31.5
)%
Corporate
(17,211
)
(4.1
)%
(15,627
)
(2.7
)%
(1,584
)
(10.1
)%
Total operating income / (loss)
$
(1,473
)
(0.4
)%
$
(6,350
)
(1.1
)%
$
4,877
76.8
%
There was an operating loss of $1.5 million in fiscal 2009 compared to an operating loss of $6.4 million in the prior year. The profit impact of
lower revenue in 2009 was partially offset by improved gross margins as a percentage of revenues and lower operating expenses. Gross profits benefited from increased sales of
high-performance products in 2009 and improved manufacturing capacity utilization. Lower operating expenses were primarily due to a decrease in SG&A expense, offset by higher restructuring
expenses associated with the closure of three manufacturing facilities in 2009 and the absence of further impairments of goodwill.
In
Asia, operating income in fiscal 2009 decreased to $21.8 million from $27.7 million in fiscal 2008, a decline of $5.9 million, or 21.4%. This decline in operating income was
primarily due to the profit impact of lower revenue, partially offset by improved gross profit, which arose from higher levels of manufacturing capacity utilization following the closure of the
facility in Dalian, China and an increased percentage of higher margin, high-performance products in the overall revenue mix.
In
the Americas, there was modest operating income in fiscal 2009 of $2.6 million, which compared favorably to the operating loss of $11.9 million in the prior year. Although revenue
decreased nearly
24.6%, lower fixed manufacturing cost and lower operating expenses, both primarily due to the closure of our Fremont facility and other cost reduction measures taken during the year, more than offset
the profit impact of lower revenue.
In
Europe, the operating loss widened in fiscal 2009 to $8.6 million, an increase of $2.1 million from the operating loss of $6.5 million in fiscal 2008. The higher operating loss
in 2009 resulted from the profit impact of lower revenue, only partially offset by a higher gross profit and lower operating expenses following the discontinuance of operations at the Mas Italia
facility and the consolidation of European laminate production in Germany in 2009.
The
operating loss attributable to Corporate was $17.2 million in fiscal 2009, an increase of $1.6 million over the prior year. The increase was primarily due to higher restructuring
charges which increased $10.4 million, offset to a significant extent by lower SG&A expense.
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Other non-operating income / (expense)
Fiscal year
2009
2008
Change
% of
revenue
% of
revenue
Amount
Amount
Amount
%
(dollars in thousands)
Other income (expense), net
$
224
0.1
%
$
2,768
0.5
%
$
(2,544
)
(91.9
)%
Embedded derivative gain / (loss)
(27,513
)
(6.6
)%
115,352
20.2
%
(142,865
)
(123.9
)%
Interest expense
(54,620
)
(13.1
)%
(58,478
)
(10.3
)%
3,858
6.6
%
Interest income
453
0.1
%
1,307
0.2
%
(854
)
(65.3
)%
Foreign exchange gain / (loss)—net
(2,116
)
(0.5
)%
(341
)
0.1
%
(1,775
)
(520.5
)%
Total non-operating income / (expense)
$
(83,572
)
(20.1
)%
$
60,608
10.6
%
$
(144,180
)
(237.9
)%
Other income—net.
Other income—net decreased in 2009 by $2.5 million, or 91.9%, over the prior year. Other income—net in
2009 and 2008 consisted primarily of royalty income. Royalty income decreased in fiscal 2009 on lower industry-wide demand for the technologies on which royalties are based.
Embedded derivative gain / (loss).
There was an embedded derivative loss of $27.5 million in 2009
compared to a gain of $115.4 million in 2008. The embedded derivative gain / (loss) in both years was related to the convertible preferred certificates.
Interest expense.
Interest expense declined in 2009 by $3.9 million, or 6.6%, over the prior year. The decline reflects the absence in 2009 of the partial
write-off of deferred loan origination costs required in 2008 as a result of amendments to the first- and second-lien credit agreements.
Foreign exchange gain / (loss)—net.
We recorded a net foreign exchange loss of $2.1 million in 2009 and $0.3 million in 2008. The
difference was due to strengthening of the euro against the U.S. dollar.
Provision benefit for income taxes
Fiscal year
2009
2008
Change
% of
revenue
% of
revenue
Amount
Amount
Amount
%
(dollars in thousands)
Net income / (loss) before tax
$
(85,045
)
(20.4
)%
$
54,258
9.5
%
$
(139,303
)
(256.7
)%
Tax provision
$
(6,504
)
(1.6
)%
$
(6,804
)
(1.2
)%
$
300
4.4
%
Effective tax rate
(7.6
)%
12.5
%
(20.1
)%
Our provision for income taxes decreased by $0.3 million, or 4.4%, from 2008 to 2009, primarily due to fluctuations in income earned in taxable
jurisdictions.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
We have historically financed our operations, including requirements for our working capital, fixed capital and pension funding, through cash
generated from operations, including operations outside of the U.S., and various lending arrangements. Tax consequences resulting from the transfer of earnings from the Company's various non-U.S.
operating subsidiaries to the Company's U.S. subsidiaries would have an immaterial effect on our financial position, results of operations and cash flows.
At
July 2, 2011 we had working capital (current assets less current liabilities) of $79.3 million. Of this amount, unrestricted cash and cash equivalents was $56.0 million.
Restricted cash at July 2, 2011 was $2.0 million (primarily to support letters of credit and retirement obligations in Germany).
Based
on our current level of operations and anticipated growth, we believe that our cash flow from operations and other sources of liquidity, including cash and cash equivalents and current
borrowings, will provide adequate funds for ongoing operations, planned capital expenditures, debt service and other requirements for at least the next 12 months. Our future capital
requirements will depend on many factors, including our growth rate and related working capital requirements, the timing and extent of our research and development efforts, the level of our sales and
marketing activities and capital expenditures.
We
have budgeted $14.3 million for cash expenditures related to capital expenditures for 2011, primarily for cost reduction projects in the areas of process and quality improvements, of which
we expended $4.8 million for the six months ended July 2, 2011. Our cash expenditures related to capital expenditures totaled $15.7 million in 2010 and $6.2 million in
2009.
Our Credit Agreements Prior to the Offering
Prior to the offering, our primary lending arrangements consist of a senior secured credit agreement and a mezzanine credit agreement entered into
with a syndicate of lenders, including our Sponsors. We intend to fully repay all loans outstanding under both of these agreements with the proceeds of this offering and the proceeds of a new senior
secured term loan that we intend to enter into concurrently with the closing of this offering.
Senior secured credit agreement.
Our senior secured credit agreement provides for a senior secured term loan of $210.0 million, the full amount of which was
drawn at closing on September 30, 2010. Loans under the senior credit agreement were issued at a discount of $28.5 million. The proceeds were used to refinance part of our
then-existing first- and second-lien term loans, as well as to pay other fees and expenses related to our senior secured credit agreement. Loans under the senior secured
agreement bear interest, at our option, at a rate per annum equal either to a base rate (that can be no less than 3%) plus 7%, or an adjusted Eurodollar rate (that can be no less than 2%) plus 8%. As
of July 2, 2011, we had principal of $210.0 million outstanding under the senior secured credit agreement, bearing interest at 10% per annum and $25.3 million of unamortized
original issue discount resulting in a net balance of $184.7 million. Loans under this agreement mature on September 30, 2015. The borrower under this agreement is our wholly-owned
subsidiary, Isola USA Corp., and loans under the agreement are guaranteed by various Isola Group Ltd. subsidiaries.
Mezzanine credit agreement.
On September 30, 2010, we issued an initial principal amount of $175.0 million in unsecured term loans pursuant to our
mezzanine credit agreement. The unsecured term loans were issued at a discount of $70.4 million. The proceeds were used in part to refinance our then-existing first- and
second-lien term debt, as well as to pay other fees and expenses related to the mezzanine credit agreement. The unsecured term loans issued pursuant to the mezzanine credit agreement bear
interest at a rate of 16% per annum, with half (8% per annum) payable in cash and the other half (8%
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Management's Discussion and Analysis of Financial Condition and Results of Operations
per
annum) payable by accreting such amount to the outstanding principal amount of the unsecured term loans. The accretion of interest is referred to as payment-in-kind, or
PIK, interest expense. As of July 2, 2011, we had principal of $185.7 million outstanding under the mezzanine credit agreement, which included $10.7 million of accreted PIK
interest. The unamortized original issue discount was $66.2 million, resulting in a net balance of $119.5 million.
The
Company incurred $19.2 million of loan origination costs pursuant to the senior secured credit agreement and the mezzanine credit agreement. Recognition of these costs has been deferred and
is amortized to interest expense over the terms of the agreements. As of July 2, 2011, we had $17.4 million of unamortized loan origination costs of which $2.9 million was
included in current assets and $14.5 million was included in long-term assets on our consolidated balance sheet.
The
senior secured credit agreement and mezzanine credit agreement require us to maintain certain covenants that restrict our ability to operate our business, including, but not limited to,
restrictions on the ability of the borrower and certain Isola group subsidiaries to (i) dispose of assets or stock; (ii) incur additional indebtedness and guarantee obligations;
(iii) pay certain dividends; (iv) create liens on assets; (v) make investments, loans or advances; (vi) restrict distributions to the borrowers or guarantors from their
subsidiaries; (vii) engage in mergers or consolidations; (viii) engage in certain transactions with affiliates; (ix) incur additional negative pledges; (x) incur capital
expenditures; (xi) change our fiscal year or accounting practices or the lines of business in which we and our subsidiaries are involved; (xii) enter into sale-leaseback
transactions; (xiii) prepay principal of, premium, or interest on, or redeem, purchase, retire, defease, or create a sinking fund or make a similar payment with respect to, any subordinated
indebtedness and certain other debt; (xiv) change the conduct of business; (xv) conduct activities of any parent holding company; (xvi) amend our organizational documents;
(xvii) cease to keep in full force and effect our corporate existence and all rights, franchises, licenses and permits material to our business; (xviii) not pay our taxes or certain
claims when they are due; or (xix) allow insurance to expire.
In
addition, our senior secured credit agreement requires us to maintain certain financial and operating covenants, including compliance with an interest coverage ratio and a leverage ratio. The
interest coverage ratio is the ratio of Consolidated Adjusted EBITDA to consolidated interest expense for a rolling four-fiscal quarter period. At July 2, 2011, the required
interest coverage ratio was at 1.75:1.00, and our actual ratio was 2.81:1.00. The required interest coverage ratio increases
over time, to 2.00:1.00 effective March 31, 2012 and increasing to 2.25:1.00 effective December 28, 2013.
The
leverage ratio is the ratio of consolidated total secured debt to Consolidated Adjusted EBITDA for a rolling four-fiscal quarter period. At July 2, 2011, the maximum allowed
leverage ratio was at 3.35:1.00, and our actual leverage ratio was 2.19:1.00. The maximum leverage ratio decreases over time, to 3.25:1.00 effective December 31, 2012 and decreasing to
2.25:1.00 effective June 28, 2014.
The
definition of Consolidated Adjusted EBITDA under the senior secured credit agreement differs from Adjusted EBITDA used elsewhere in the prospectus. Under our senior secured credit agreement,
Consolidated Adjusted EBITDA includes additional add-backs to net income for certain pension costs, property and other taxes, and certain other expenses.
Our Credit Facilities Following the Offering
In connection with this offering, we intend to enter into a new senior secured credit facility consisting of a $              million senior
secured term loan with a $              million senior secured revolving credit facility. The proceeds of the new term loan will be used to repay the portion of the loans under our
existing
senior secured credit and mezzanine agreements that are not repaid with the proceeds of this offering. We expect the new senior secured credit facility to be completed substantially concurrently with
the closing of this offering. Our entry into the new senior secured credit facility is conditioned on the completion of this offering.
We
anticipate that the new senior secured credit facility will reduce our annual interest expense and subject us to less restrictive financial covenants. For additional information on the principal
terms of this facility, see "Description of Indebtedness—Our New Credit Facilities".
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Cash Flows
The table below sets forth selected cash flow data for the periods presented:
Six months ended
Fiscal year
July 2,
2011
June 26,
2010
2010
2009
2008
(dollars in thousands)
Net cash provided by / (used in) operating activities
$
23,726
$
23,726
$
(55,348
)
$
(15,099
)
$
(16,837
)
Net cash provided by / used in investing activities
1,073
(1,538
)
(9,278
)
(6,974
)
(3,758
)
Net cash provided by / (used in) financing activities
(6,696
)
(486
)
60,642
(13,072
)
5,758
Effect of exchange rates on cash and cash equivalents
1,174
(2,452
)
1,785
(7
)
357
Net increase / (decrease) in cash and cash equivalents
$
19,277
$
19,250
$
(2,199
)
$
(35,152
)
$
(14,480
)
Operating Activities.
Cash provided by or (used in) operating activities is the cash we generate through running the business and reflects change in the balances
of operating assets and liabilities as well as adjustments to net income for non-cash income and expense items.
For
the six months ended July 2, 2011, net cash provided by operating activities was $23.7 million. The operating cash in-flow was provided by earnings from operations as
well as lower investment in inventories which more than offset an increase in accounts receivable.
For
the six months ended June 26, 2010, net cash provided by operating activities was $23.7 million. Increased receivables and inventories in support of increased revenues were partially
financed by higher levels of accounts payable as well as higher accrued interest payable under our then-defaulted loan agreements which was paid in the fourth quarter of fiscal 2010.
In
fiscal 2010, net cash used in operating activities was $55.3 million. The payment on September 30, 2010 of $76.4 million of interest expense which had been accrued since the
start of fiscal 2009 was the primary reason for the negative operating cash flows in 2010. Higher receivables and inventories also led to an increase in the cash used in operations.
Net
cash used in operating activities was $15.1 million in fiscal 2009. Net cash used in operations was affected by increases in receivables and inventory and reduced accounts payable as
several vendors shortened their credit terms to us. Cash outflows were partially offset by an increase of $42.7 million in accrued liabilities, most of which was due to the accrual of interest
expense on the loans related to the then-defaulted first- and second-lien credit facilities that we were unable to pay.
For
fiscal 2008, net cash used in operating activities was $16.8 million. As revenues slowed in the last two quarters of 2008, we were able to reduce our balances in receivables and
inventories; however this was offset by lower accounts payable.
Investing Activities.
Cash used in investing activities relates primarily to payments to, or proceeds from, restricted cash accounts, and payments for capital
expenditures. Most of our capital expenditures are to improve manufacturing productivity, to improve the quality of our products, to address environmental health and safety considerations or to
replace aging equipment.
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For
the six months ended July 2, 2011, cash provided by investing activities was $1.1 million. Purchases of property, plant and equipment were $4.8 million, which was more than
offset by the release of restricted cash of $5.5 million related to the closure of our Dalian, China facility and repayment of an entrustment loan in the second quarter of 2011. We also had a
small amount of proceeds from the disposition of property, plant and equipment.
For
the six months ended June 26, 2010, net cash used in investing activities was $1.5 million. Purchases of property, plant and equipment were $4.2 million, which was partially
offset by the release of restricted cash of $2.4 million.
In
fiscal 2010, net cash used in investing activities was $9.3 million. Purchases of property, plant and equipment were $15.7 million, which was offset in part by proceeds from the sale
of property, plant and equipment of $4.4 million and the release of restricted cash of $2.0 million following the partial repayment of an entrustment loan by the Dalian, China facility.
In
fiscal 2009, net cash used in investing activities was $7.0 million. Net cash used in investing activities in fiscal 2009 was primarily for the acquisitions of property, plant and equipment
in the amount of $6.2 million; cash used was affected by significantly lower than normal annual investment in capital expenditures due to the severity of the worldwide recession and our need to
conserve cash.
In
fiscal 2008, net cash used in investing activities was $3.8 million. Purchases of property, plant and equipment of $11.3 million were mostly offset by proceeds from the sale of
property, plant and equipment of $4.9 million and the release of restricted cash of $3.5 million.
Financing Activities.
Cash provided by (used in) financing activities relates primarily to proceeds and
payments from capital and debt raising transactions and payments under agreements and facilities, including capital lease obligations.
For
the six months ended July 2, 2011, net cash used in financing activities was $6.7 million. Financing activities include $1.7 million of expenses, primarily legal and
accounting, related to this offering. The remaining financing activities occurred in our overseas subsidiaries and reflect the roll-over of various term loans and the payoff of the
entrustment loan by the Dalian, China facility in the amount of $5.5 million.
For
the six months ended June 26, 2010, net cash used in financing activities was $0.5 million and consisted of payments on capital lease obligations.
In
fiscal 2010, net cash provided by financing activities was $60.6 million. We completed a major refinancing in fiscal 2010, entering into new senior secured and mezzanine credit agreements as
well as issuing convertible preferred certificates. We received gross proceeds from these transactions of $376.4 million, which was allocated among the three forms of financing based on their
relative fair values. The funds received from these transactions along with $32.7 million of cash were used to repay the principal and accrued interest of the then-outstanding
first- and second-lien credit facilities. We incurred $19.2 million of debt issuance costs related to the new senior secured and mezzanine credit agreements
In
fiscal 2009, net cash used in financing activities was $13.1 million. We received proceeds of $30.7 million which reflected the renewal of short-term credit facilities at
our overseas subsidiaries. Debt repayments similarly reflected the repayments of these short-term credit facilities. We made a $6.3 million repayment of principal on our
first-lien credit facility in the U.S. as well as a reduction of $2.2 million in the entrustment loan by our Dalian, China entity.
In
fiscal 2008, net cash provided by financing activities was $5.8 million. Proceeds of $77.1 million included a $31.9 million draw-down in the U.S. under the
revolving credit facility of the first-lien credit agreement. Debt payments included $12.8 million of principal repayments under the first-lien credit agreement and a
$3.0 million reduction of the entrustment loan by the Dalian, China facility. The remaining debt proceeds
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Management's Discussion and Analysis of Financial Condition and Results of Operations
and
payments were related to the roll-over of short-term credit facilities at our overseas subsidiaries. Debt issuance costs of $3.3 million were incurred to amend the
first- and second-lien credit agreements in August 2008.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
The following table sets forth, as of January 1, 2011, the aggregate amounts of our significant contractual obligations and commitments with
definitive payment terms due in each of the periods presented:
Payments due by period
Total
Year 1
Years 2-3
Years 4-5
More than
5 years
(dollars in thousands)
Secured term loans under senior secured credit agreement
(1)
$
311,209
$
21,292
$
37,275
$
252,642
$
0
Unsecured term loans under mezzanine credit agreement
(2)
359,461
14,716
28,411
37,409
278,925
Short-term debt
(3)
21,710
21,710
Interest rate swaps
(4)
1,259
365
723
171
0
Capital leases
(5)
19,460
1,337
2,674
2,674
12,775
Operating leases
(5)
5,943
1,404
1,877
857
1,805
Purchase obligations
(6)
21,071
4,905
7,061
3,687
5,418
Convertible preferred certificates
(7)
1,933,597
0
0
0
1,933,597
Total
$
2,673,710
$
65,729
$
78,021
$
297,440
$
2,232,520
(1)
Represents future principal and interest payments on the senior secured credit agreement entered into on September 30, 2010. Includes projected interest of
$101.2 million based on the interest rate as of January 1, 2011. Refer to Note 4 "Debt" in the consolidated financial statements.
(2)
Represents future principal and interest payments on the mezzanine credit agreement entered into on September 30, 2010. Includes projected interest of
$184.5 million
based on the interest rate as of January 1, 2011. Of this amount, $94.0 million represents interest "payable in kind" and $90.5 million represents interest payable in cash. Refer
to Note 4 "Debt" in the consolidated financial statements.
(3)
Represents future principal and interest payments on short-term debt. Includes projected interest of $0.7 million based on interest rates as of January 1,
2011. Refer to Note 4 "Debt" in the consolidated financial statements.
(4)
Represents obligations related to interest rate swaps entered into in February 2007, May 2007 and December 2010. Each interest rate swap is based on variable rates.
The projected
obligation is based on the interest rate as of January 1, 2011. Refer to Note 6 "Interest Rate Swaps" in the consolidated financial statements.
(5)
Represents obligations under capital and operating leases. Includes imputed interest of $4.2 million. Refer to Note 8 "Commitments and Contingencies" in
the consolidated
financial statements.
(6)
Includes amounts associated with agreements to purchase goods or services that are enforceable and legally binding on us and specify all significant terms,
including: fixed or minimum
quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. These amounts are primarily comprised of contracts for electricity, gas and
other utilities.
(7)
Represents future principal and interest payments associated with our convertible preferred certificates, which constitute legal debt instruments in Luxembourg, the
jurisdiction of
issuance. The convertible preferred certificates are denominated in Euro and earn interest based on variable rates. The obligation includes projected interest of $1,747.0 million and is based
on interest rates as of January 1, 2011. Refer to Note 5 "Convertible Preferred Certificates" in the consolidated financial statements. Immediately prior to this offering, all of the
convertible preferred certificates will be effectively converted into ordinary shares of Isola Group Ltd., and the principal and interest on the convertible preferred certificates will no longer be
payable in cash. See the "Pro forma payments due by period" table that follows, which illustrates the pro forma effect of this conversion.
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The above table excludes the following items:
(a)
Amounts
potentially payable to taxing authorities for uncertain tax positions taken on returns. The amount and timing of payments with respect to these
items are subject to a number of uncertainties such that we are unable to make sufficiently reliable estimates of the timing and amount of future payments. As of January 1, 2011, we had accrued
$53.5 million related to uncertain tax positions. While each of our uncertain tax positions could be settled in cash at a future date, a significant portion of the uncertain tax positions
relates to jurisdictions in which we have incurred net operating losses. Refer to Note 12 "Income Taxes" in the consolidated financial statements.
(b)
Amounts
payable to TPG Capital pursuant to an agreement whereby TPG Capital provides financial, advisory and consulting services to us. There are no minimum
levels of service required to be provided pursuant to the agreement and the agreement is in effect until cancelled by either party or the consummation of this offering. The annual amount due under the
agreement is $2.1 million. Refer to Note 13 "Related Party Transactions" in the consolidated financial statements.
(c)
Estimated
minimum funding requirements and expected voluntary contributions for retiree benefit plans as set forth by ERISA in relation to our pension and
post-retirement benefit obligations. Refer to Note 7 "Pension and Other Retirement Benefits" in the consolidated financial statements.
The
following table sets forth, as of July 2, 2011, the aggregate amounts of our significant contractual obligations and commitments with definitive payment terms due in each of the periods
presented on a pro forma basis to give effect to (i) the reorganization and effective conversion of the convertible preferred certificates to ordinary shares and (ii) the application of
$          million of the net proceeds from this offering and borrowings of $          million of indebtedness under a new senior secured credit
facility to prepay the secured
term loans made under our senior secured credit agreement and the unsecured term loans made under our mezzanine credit agreement as described in "Use of Proceeds":
Pro forma payments due by period
Total
Year 1
Years 2-3
Years 4-5
More than
5 years
(dollars in thousands)
Secured term loans under new senior secured credit facility
(1)
$
$
$
$
$
Short-term debt
(2)
Interest rate swaps
(3)
Capital leases
(4)
Operating leases
(4)
Purchase obligations
(5)
Total
$
$
$
$
$
(1)
Represents future principal and interest payments on our new senior secured credit facility. Includes projected interest of
$          million.
(2)
Represents future principal and interest payments on short-term debt. Includes projected interest of
$          million based on interest rates as of
July 2, 2011. Refer to Note 4 "Debt" in the consolidated financial statements.
(3)
Represents obligations related to interest rate swaps entered into in February 2007, May 2007 and December 2010. Each interest rate swap is based on variable rates.
The projected
obligation is based on the interest rate as of July 2, 2011. Refer to Note 6 "Interest Rate Swaps" in the consolidated financial statements.
(4)
Represents obligations under capital and operating leases. Includes imputed interest of $          million. Refer
to Note 8 "Commitments and Contingencies" in the
consolidated financial statements.
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(5)
Purchase obligations include amounts associated with agreements to purchase goods or services that are enforceable and legally binding on us and specify all significant terms,
including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. These amounts are primarily comprised of contracts
for electricity, gas and other utilities.
The above table excludes the following items:
(a)
Amounts
potentially payable to taxing authorities for uncertain tax positions taken on returns. The amount and timing of payments with respect to these
items are subject to a number of uncertainties such that we are unable to make sufficiently reliable estimates of the timing and amount of future payments. As of July 2, 2011, we had accrued
$56.4 million related to uncertain tax positions. While each of our uncertain tax positions could be settled in cash at a future date, a significant portion of the uncertain tax positions
relates to jurisdictions in which we have incurred net operating losses. Refer to Note 12 "Income Taxes" in the consolidated financial statements.
(b)
Amounts
payable to TPG Capital represent a transaction fee of $8.0 million and accrued management fees of $1.0 million associated with
financial, advisory and consulting services provided to the Company. The amounts payable do not have scheduled repayment terms.
(c)
Estimated
minimum funding requirements and expected voluntary contributions for retiree benefit plans as set forth by ERISA in relation to the our pension
and post-retirement benefit obligations. Refer to Note 7 "Pension and Other Retirement Benefits" in the consolidated financial statements.
PENSION PLANS
Pension Plans.
We sponsor several pension plans and provide various medical and life insurance
benefits to certain retirees at a minimal cost to Isola. Although we have terminated or curtailed select benefits or plans, including our U.S. pension plans, several others are expected to continue,
including pension plans required by collective bargaining agreements outside of the United States. Some of these plans are underfunded. Based on various assumptions, in the aggregate our pension plans
were underfunded by $43.0 million at January 1, 2011. We expect to make annual pension contributions of approximately $4.5 million for the foreseeable future. For additional
information on our pension plans and postretirement benefits, see Note 7 to the Consolidated Financial Statements.
QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK
Interest Rate Risk, Derivative Instruments
We are exposed to certain risks relating to our ongoing business operations. The primary risk managed by using derivative instruments is interest
rate risk. We do not use derivative financial instruments for trading or speculation purposes.
We
are subject to interest rate risk in connection with borrowings under our existing senior secured credit agreement. As of July 2, 2011, we had $210.0 million in senior secured term
loans outstanding under our existing senior secured credit agreement, the unhedged portion of which is subject to variable interest rates. We can elect to lock in interest rates on the existing senior
secured debt for one, two, three or six months. The interest rates vary based upon the loan type, which is either a base rate loan or an adjusted Eurodollar rate. As of July 2, 2011, we had
elected to accrue interest for three months using the adjusted Eurodollar rate, which resulted in an interest rate of 10%. Under the existing senior agreement, the adjusted Eurodollar rate would need
to increase above 2% to have an impact on future interest expense.
On
December 30, 2010, we entered into an interest rate swap agreement with a notional amount of $25 million under which we pay a fixed 2.8% and receive the greater of three-month LIBOR
or 2%. The swap is set to expire December 31, 2013. Settlement dates occur quarterly. We did not designate this swap
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agreement
as a hedge and, therefore, the change in its fair value will be recorded in our consolidated statement of operations in interest expense, along with the quarterly settlement amounts. This
derivative instrument addresses a requirement of our senior secured credit agreement to have 50% of all indebtedness for borrowed money subject to interest rate agreements and/or fixed rates. The fair
value of this interest rate swap at the end of the six months ended July 2, 2011 was immaterial.
Foreign Currency Risk
While the Company generates revenues in several currencies, a majority of its operating expenses are in U.S. dollars. Therefore depreciation in these
other currencies against the U.S. dollar would negatively impact revenue upon translation to the U.S. dollars; however, the impact on operating expenses would be less. For example, for fiscal 2010, a
10% decrease in the euro against the U.S. dollar would have resulted in a $13.9 million decrease in revenue and an increase of $0.2 million in the net loss in fiscal 2010.
Inflation Risk
Inflationary factors, such as increases in our cost of goods sold and operating expenses, may adversely affect our results of operations. Although we
do not believe that inflation has had a material impact on our financial position or results of operations to date, an increase in the rate of inflation in the future, particularly in Europe and
China, may have an adverse affect on our levels of gross profit and operating expenses as a percentage of revenue if the sales prices for our products do not proportionately increase with these
increased expenses.
Commodity Risk
We are subject to commodity risks related to the prices of the raw materials used in the manufacture of our advanced PCB laminate materials,
including copper, glass and resin. These raw materials, especially copper, are subject to price fluctuations. We have been able to pass through to our customers a substantial portion of the raw
material cost increases in the past, although our ability to do so to the same degree in the future is not guaranteed. Historically, we have been able to pass through raw material price increases more
readily in connection with our high-performance products.
OFF-BALANCE SHEET ARRANGEMENTS
We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that
would be expected to have a material current or future effect upon our results of operations and financial condition.
SEASONALITY
Historically, our business has not been subject to recurring seasonal patterns. Revenue and earnings from quarter-to-quarter
within a fiscal year are driven primarily by general economic factors and the demand for electronic products.
RECENT ACCOUNTING PRONOUNCEMENTS
Changes to accounting principles generally accepted in the United States of America ("U.S. GAAP") are established by the FASB in the form of
accounting standards updates ("ASUs") to the FASB's Accounting Standards Codification.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
The
Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and were either determined to be not applicable or are expected to have minimal impact on our
consolidated financial position and results of operations.
In
January 2010, FASB issued ASU No. 2010-06, "Fair Value Measurements and Disclosures (Topic 820)—Improving Disclosures about Fair Value Measurements"
("ASU 2010-06"). ASU 2010-06 requires new disclosures regarding significant transfers in and out of Levels 1 and 2, as well as information about activity
in Level 3 fair value measurements, including presenting information about purchases, sales, issuances and settlements on a gross versus a net basis in the Level 3 activity roll forward.
In addition, ASU 2010-06 clarifies existing disclosures regarding input and valuation techniques, as well as the level of disaggregation for each class of assets and liabilities.
ASU No. 2009-06 is effective for interim and annual periods beginning after December 15, 2009, except for the disclosures pertaining to purchases, sales, issuances and
settlements in the roll forward of Level 3 activity; those disclosures are effective for interim and annual periods beginning after December 15, 2010. The adoption of
ASU 2010-06 in fiscal 2010 did not have a material impact on our consolidated financial position, results of operations or cash flows.
In
June 2011, the FASB issued an amendment to the existing guidance on the presentation of comprehensive income. Under the amended guidance, entities have the option to present the components of net
income and other comprehensive income in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Entities no longer have the option of presenting
the components of other comprehensive income within the statement of changes in stockholders' equity. This amendment is effective on a retrospective basis for interim and annual periods beginning
after December 15, 2011, which for the Company begins with the first quarter of 2012. The adoption of this amendment will result in a change to the Company's current presentation of
comprehensive income, but will not have any impact on the Company's consolidated financial position or results of operations.
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Business
OUR COMPANY
Isola is a leading global material sciences company that designs, develops and manufactures copper-clad laminate ("CCL")
and prepreg (collectively, "laminate materials") used to fabricate advanced multilayer printed circuit boards ("PCBs"). PCBs provide the physical platform for the semiconductors, passive components
and connection circuitry that power and control virtually all modern electronics. We focus on the market for high-performance laminate materials, developing proprietary resins that are
critical to the performance of PCBs used in advanced electronic applications. We continually invest in research and development and believe that our industry-leading resin formulations, many of which
are patented, provide us with a competitive advantage. With 11 manufacturing facilities and three research centers worldwide, as well as a global sales force, we are the largest supplier of laminate
materials to PCB fabricators in the United States and Europe, and we are one of the larger suppliers in our addressable Asian market, based on revenue for fiscal year 2010.
Our
high-performance PCB laminate materials are used in a variety of advanced electronics, including network and communications equipment and high-end consumer electronics, as
well as advanced automotive, aerospace, military and medical applications. Demand in these markets is driven by the rapid growth of bandwidth-intensive high-speed data transmission, the expansion of
the internet, the emergence of cloud computing and the evolution of increasingly complex communications technology. This has led to an urgent need for the development of the underlying infrastructure
to support this growth, including faster and more efficient semiconductor technology. In
addition, increasingly pervasive environmental regulations are driving a need for lead-free compatible, high-performance laminate materials.
We
sell our products globally to leading PCB fabricators, including DDi, Ruwel, Sanmina, TTM Technologies, Viasystems and WUS Printed Circuit. These fabricators produce PCBs incorporating our laminate
materials for electronic equipment designed or produced by a broad group of major original equipment manufacturers, or OEMs, including Alcatel-Lucent, Brocade, Cisco, Google, Hewlett-Packard, Huawei,
IBM and Sun Microsystems (now Oracle). We work closely with these leading PCB fabricators and major OEMs to ensure that our high-performance laminate materials, which incorporate our
proprietary resins, meet the thermal, electrical and physical performance criteria of each new generation of electronic equipment.
We
were acquired in 2004 by a group of investors led by TPG Capital, formerly known as Texas Pacific Group, a global private equity firm, and Redfern Partners, a strategic partner and an investor in
the laminate materials industry. Under the direction of TPG Capital and our management, we have undertaken a number of operational changes designed to increase manufacturing efficiencies and improve
business processes. We believe that these measures, together with our focus on higher margin high-performance products, provide us with the operating leverage to take advantage of
improving economic conditions.
Our
history dates back nearly 100 years to the founding of Isola Werke AG in Germany in 1912. Isola Werke AG manufactured insulators utilizing the then-revolutionary Bakelite
plastic technology, which provided superior insulating and heat resistance properties. We began production of copper-clad epoxy laminates, the direct predecessors of today's
high-performance PCB laminate products, in the 1960s. In 2006, we acquired the assets of Polyclad Laminates, Inc., which extended our product portfolio and expanded our business in
the growing Asian markets.
For
the six months ended July 2, 2011, our revenue was $316.6 million, Adjusted EBITDA was $49.2 million and our net loss was $19.1 million, as compared to revenue of
$307.0 million, Adjusted EBITDA of $49.2 million and a net loss of $30.5 million for the six months ended June 26, 2010. For fiscal 2010, our revenue was
$612.0 million, our Adjusted EBITDA was $89.7 million and our net income was
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Business
$5.1 million,
as compared to revenue of $416.1 million, Adjusted EBITDA of $39.0 million and a net loss of $100.7 million in fiscal 2009. For a discussion of our primary
non-GAAP metric, Adjusted EBITDA, including reconciliation to net income, see our discussion of non-GAAP financial measures in "Selected Historical Consolidated Financial and
Other Data", included elsewhere in this prospectus.
INDUSTRY OVERVIEW AND MARKET OPPORTUNITY
High-performance laminate materials are used in a variety of advanced electronics, including network and communications equipment,
high-end consumer electronics, as well as advanced automotive, aerospace, military and medical applications. The increasingly complex performance and environmental requirements of advanced
electronics are driving greater demand for higher performance PCBs, which require laminate materials with resins specifically formulated to satisfy demanding performance criteria.
Based
on data from Prismark, an independent research firm, we estimate that our addressable market for high-performance PCB laminate materials was $4.6 billion in 2010. According to
BPA, another independent research firm, the market for multilayer PCB laminate materials (predominately comprised of the high-performance market segment) is expected to make up
approximately 55% of the worldwide PCB laminate materials market in 2011 (measured in square meters) and remains the fastest growing segment with an expected CAGR of 12.4% from 2010 to 2014 for PCB
production value.
PCB Laminate Materials and Fabrication
Prepreg and CCL are the primary laminate materials used in the construction of multilayer PCBs, and we estimate that these materials represent
greater than 40% of the material cost required to fabricate a PCB.
Prepreg
is an industry term derived from the contraction of "
pre
viously
im
preg
nated". Prepreg is a dielectric material that provides electrical insulation and other properties. Prepreg is
manufactured by the impregnation of fiberglass fabric with specially formulated resins. The resin confers specific electrical, thermal and physical properties to the prepreg and is critical to the
proper functioning of a PCB. Prepreg may be incorporated into a CCL or sold as a separate product.
CCL
consists of an inner layer of prepreg laminated on both sides with a thin layer of copper foil. The lamination is achieved by pressing together one or more plies of copper and prepreg under
intense heat, pressure and vacuum conditions.
PCB
fabricators use prepreg and CCL to construct multilayered PCBs in a complex process comprised of multiple operations that are often repeated. In general, the copper surfaces of the laminate are
etched to create an electronic circuit. These etched laminates are assembled into a multilayer configuration by inserting one or more plies of insulating prepreg between each etched laminate. Holes
are then drilled and plated in the PCB to establish electrical connections among the layers. The resulting multilayer PCB is an intricate interconnection device on which semiconductors and other
components are mounted, which is then incorporated into an end-market product.
Although
end products and PCB designs often evolve rapidly as a result of product line improvements or extensions, the lifespan of the underlying PCB laminate materials is relatively long. The same
laminate materials can be used in successive generations of PCBs within a product line or be adapted to new products having similar performance specifications.
PCB Laminate Materials Segments and Properties
PCB laminate materials can be categorized as either high-performance, standard or paper-based.
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High-performance
PCB laminate materials are defined by their superior performance capabilities achieved primarily through the use of
advanced resin formulations and materials. These products compete primarily on their technological capabilities and secondarily on the price of PCB laminate materials with similar performance
characteristics. High-performance products are used in circuit boards that combine eight or more layers, with some applications requiring circuit boards with more than 20 layers. In the
high-performance market, the following properties are critical:
–>
Electrical
:  This
property refers to the speed with which an electric current moves through the circuit and the signal loss,
or dissipation. Signal speed of a material is expressed by its dielectric constant; signal loss is expressed by its dissipation factor.
–>
Thermal
:  This
property refers to the stability of the material at various temperatures. This is important for dimensional
stability over the expected range of temperatures that a PCB will be exposed to during its final assembly (i.e., soldering process), as well as the operating temperature of the particular
electronic device. Thermal stability of a material is measured by its glass transition temperature (expressed as "Tg").
–>
Physical
:  This
property refers to a number of factors, including peel strength (i.e., susceptibility to
de-lamination), flammability, moisture absorption, ease of processing, drilling and reliability.
Standard
PCB laminate materials are based on proven, though relatively less sophisticated, resin chemistry. These products compete primarily on price
and are produced in high volumes and at a low cost. Standard PCB laminate materials involve minimal proprietary technology and are used in applications requiring lower layer counts and less
complexity.
Paper-based
PCB laminate materials are used in very simple consumer electronics, are very low-cost and typically rely upon somewhat
rudimentary chemical formulations. Isola does not participate in this market segment.
End-market Overview
The market for high-performance PCB laminate materials is influenced by a number of factors, including developments in the markets for
servers and storage, network communications and advanced automotive electronics as discussed below.
Servers and storage.
The need for additional server and data storage capacity has significantly increased due to the proliferation of digital data and the
widespread adoption of cloud computing applications. Cloud computing entails the use of virtual servers which are accessed through the internet and deliver hosted services that have traditionally been
deployed in-house, including software as a service, platform as a service and infrastructure as a service. According to IDC, a leading independent research organization, as reported in its
Digital Universe Study of June 2011 (sponsored by EMC), the amount of digital data created, replicated and stored by 2015 will reach 7.9 trillion gigabytes, which is 6.4 times the
amount of data in 2010, representing a CAGR of 45%. Storing and utilizing vast amounts of data will require significant increases in server and storage capacity and capability, as well
as more robust cloud computing technology. As servers and storage equipment become more sophisticated and technically demanding, manufacturers will need more effective PCB laminate materials comprised
of high-performance resin formulations to achieve the required performance in PCBs.
Network communications.
Enterprise routers and wireless infrastructure form the network foundation required for high-speed data transmission and
internet access over wired and wireless servers, including the 4G wireless services that are now being rolled out globally. Currently deployed network infrastructure will require significant
investment in more sophisticated equipment with greater speed, processing power and performance characteristics in order to provide the increased capacity needed to address increased volumes
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of
traffic and data driven by social networking, increased mobile internet access and increased transmission of high-bandwidth content such as high-definition videos. The Cisco
Visual Networking Index estimates that global IP traffic will grow at a CAGR of approximately 32% from 2010 to 2015, largely driven by the increase in mobile internet demand.
Advanced automotive electronics.
While traditional automotive electronics utilize standard PCB laminate materials, the emergence of more sophisticated features,
such as vehicle information systems, engine and power train electronics and vehicle control systems, are driving demand for more advanced automotive electronics. These electronics require
higher-performing PCBs that incorporate high-performance laminate materials. Prismark estimates that automotive electronic applications represented 5.5% of the global PCB market in 2011,
and that the high-performance PCB market for automotive electronics is expected to grow at a 6.9% CAGR from 2010 to 2015.
Other markets.
Other markets include military/aerospace equipment, advanced mobile devices and satellite television receivers. High-performance PCBs
are used in military/aerospace applications, including radar, guidance control, communications and navigation, warfare and electro-optical equipment. Advanced mobile devices such as smart phones and
tablets incorporate PCBs made with high-performance halogen-free laminate materials. Satellite receivers require advanced high frequency PCB laminate materials that efficiently
transform signals to high quality, low frequency signals suitable for transmission over indoor cables.
Trends and Drivers in the Global PCB Laminate Industry
Current trends and drivers in the global industry for PCB laminate materials include the following:
Rapidly expanding data infrastructure and increasing demand for high-performance PCB laminate materials.
Higher volumes of high-performance
PCB laminate materials will be required as OEMs sell more enterprise-level servers, storage solutions, routers, switches and other high-performance electronics. Growth in these products
continues due to fast-growing applications such as cloud computing, social networking and online video streaming combined with ubiquitous internet access. This trend is expected to
continue as developed nations continually improve upon existing technologies and developing nations further adopt and rely on high-performance electronics.
Increasing performance requirements of advanced electronics require high-performance PCB laminate materials.
To meet continually increasing performance
requirements of advanced electronics, semiconductor and component manufacturers regularly introduce successive generations of higher performance microprocessors, memory and logic devices and
electronic components. High-performance multi-layer PCBs and laminate materials are required to facilitate fast interconnect speeds and deliver superior electrical properties, enabling
semiconductors and components to optimally function as a system. As a result, the PCB laminate materials industry must continually develop better performing, more cost effective laminate and resin
formulations to meet the growing requirements of new semiconductor and component technologies.
Growing demand for environmentally friendly lead-free compatible PCB laminate materials.
Increased regulation applicable to electronic equipment
requires manufacturers to consider use of lead-free materials in products and manufacturing processes. While these regulatory measures do not have a direct impact on PCB laminate
materials, which do not contain lead or other prohibited chemicals, they do change the thermal requirements of the laminates used in the lead-free soldering of PCBs. Lead-free
applications have been gaining momentum globally with many companies introducing products to meet the new regulations, and some converting exclusively to lead-free compatible assemblies in
order to avoid having separate bills of material and dedicated product lines.
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Greater emphasis on closer collaboration with OEMs and materials suppliers.
Time-to-market for new products has become increasingly
important as the rate of technology advancement accelerates and competition increases. OEMs are more frequently working directly with laminate materials suppliers early in the product lifecycle to
qualify specific laminates to be used in the PCBs incorporated into the end product. This collaboration allows OEMs to accelerate the product development process and bring products to market faster.
In addition, just-in-time inventory stocking by PCB fabricators results in a need for quick-turn availability of laminate materials. Laminate materials producers
benefit from these trends, partnering closely with customers to accommodate their demands, while obtaining higher margins on quick-turn orders.
OUR COMPETITIVE STRENGTHS
We believe that we possess the following competitive strengths, which will enable us to continue to grow our business globally.
Product technology leadership.
Our significant technology expertise enables us to produce market-leading high-performance PCB laminate materials. We
possess an extensive portfolio of patent and other intellectual property rights covering our proprietary resin formulations, and have pioneered the development of several product categories with "best
in class" technology. Our proprietary resin formulations are capable of supporting complex circuit boards used in the most demanding electronic equipment. We believe that our technology provides a
competitive advantage, and differentiates our products from commonly available, lower performance materials. We continue to devote considerable efforts to research and develop new resin formulations
and other PCB laminate materials to meet evolving market needs.
Recognized market leadership.
We maintain a leading market share, based on revenues, in each of our larger addressable markets for high-performance
laminate materials. We have an established reputation as an industry leader and product innovator with strong brand recognition. We
believe that our products are known for their performance, quality and long product life cycles. We believe that our reputation and brand awareness provide meaningful advantages when developing and
marketing new and existing products and will play a significant role in our future growth.
Blue-chip customer base served by global strategic manufacturing locations.
We have developed strong, long-term relationships with leading
global PCB fabricators and the major OEMs they serve. We believe that the collaborative relationships provide us with a competitive advantage and assist us in bringing new products to market in a
timely manner. We own state-of-the-art equipment in manufacturing facilities that are strategically located around the world in close proximity to these key
industry participants. Our global network of plants facilitates quick-turn manufacturing and delivery of product, which reduces our customers' inventory levels and shipping costs.
Streamlined manufacturing with significant operating leverage.
We seek to achieve continual improvement in our manufacturing and business processes. We use "six
sigma" processes and "lean" best practices, and recently completed the implementation of a sophisticated SAP-based ERP and analytical system across our global operations. In 2009, we
closed three of our manufacturing facilities to improve factory utilization and lowered our fixed costs. Together with other measures, these closures are estimated to result in permanent fixed cost
savings of approximately $30 million annually.
Experienced management team.
We have a highly experienced management team comprised of well-respected industry veterans who possess an average of over
20 years of experience in the electronics industry. Our management team has a proven track record of implementing sound business practices, which include focusing our product development on
higher margin products, improving the efficiency of our manufacturing facilities and successfully integrating acquired businesses.
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OUR GROWTH STRATEGIES
We intend to extend our market leadership in the higher margin, high-performance laminate materials market through the following growth
strategies:
Leverage collaborative relationships and technology leadership to develop innovative solutions.
We have implemented focused product development teams to further
expand our relationships with leading PCB fabricators and the OEMs they serve. Our product development teams include members of our research and development, technical support and OEM marketing
groups, all working under the direction of our Chief Technology Officer. Our teams actively monitor product developments for OEMs and engage in regular dialog with them and their PCB fabricators, in
order to anticipate and plan for required technical product specifications. Through this collaborative effort we seek to develop innovative laminate materials solutions that meet future OEM product
requirements.
Further penetrate the Asian market.
Many OEMs and PCB fabricators are increasingly migrating the manufacturing of complex electronic equipment to Asia. In
addition, several Asian markets are simultaneously undergoing infrastructure build-outs as their economies grow and develop. To supply this market, six of our 11 manufacturing facilities
are located in Asia, and we maintain a sales force dedicated to serving this region. We will seek to capitalize on the opportunities presented by the very large and fast growing Asian markets for
high-performance PCB laminate materials based on the high quality of our products and our technology.
Extend high-performance products into new applications.
We believe that other markets could benefit from our PCB laminate materials and proprietary
resin formulations, including the markets for next generation automotive equipment and consumer devices such as smart phones and tablets. In addition, we believe that environmental regulations will
become increasingly global and expand the addressable market for our high-performance, lead-free compatible and halogen-free PCB laminate materials. We intend to
devote marketing and technical resources to address these growing potential markets.
Opportunistically pursue strategic acquisitions and alliances.
We have grown through select acquisitions since we were acquired in 2004. While we believe that our
future success will depend primarily on
product innovation from collaborative relationships with our major customers and the OEMs they serve, we may pursue strategic acquisitions that provide products or technology complementary to our
current operations.
PRODUCT MARKETS AND PRODUCT APPLICATIONS
Product Markets.
Isola focuses on the high-performance segments of the market for PCB laminate materials, which are expected to provide the greatest
growth opportunities. Currently the largest of the markets we serve include:
–>
High-Tg.
High-Tg products exhibit superior thermal, electrical and physical
performance characteristics, including the ability to withstand fabrication processes involving temperatures of 170°C or more. They are used in the communications, industrial, medical,
automotive, military, aerospace and computing industries.
–>
High-Tg, lead-free.
High-Tg, lead-free compatible
products incorporate resins specially formulated to withstand thermal stresses arising in higher temperature lead-free PCB fabrication. Demand for lead-free products is driven
by growing environmental concerns, including lead-free initiatives in major geographies. We maintain an extensive portfolio of proprietary technology and we believe we have significant
market share in this product segment.
–>
High-speed digital.
High-speed digital, or high-frequency, products
provide superior electrical properties, specifically low dissipation factors and low dielectric constants. Demand for these products
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is
driven by a need for increased circuit speeds for servers, storage application networks, network infrastructure and military electronics. We have a leading market position and an extensive
portfolio of proprietary technology addressing this market.
We
also participate in the following high-performance markets:
–>
Halogen-free.
Halogen-free products satisfy consumer demand for "green" products
because they do not contain halogen-derived flame retardants. This market is currently growing primarily in the consumer electronics sector with specific applications ranging from smart phones to
tablets and LCD displays. Although the current market for these products is extremely price competitive, newer and more demanding applications are emerging. We are currently developing more advanced
halogen-free materials utilizing resin formulations with improved thermal and electrical properties to address the emerging needs of this market, and we expect that these next generation
halogen-free products are likely to command higher prices and provide improved margins.
–>
Military/specialty.
These laminate materials find specialized uses within the military and aerospace
industries. Typically they have high glass-transition temperatures, very high decomposition temperatures and low expansion rates—all attributes required for demanding military and
aerospace applications. We work through licensed government contractors to address existing and emerging applications.
We
also provide the following standard products to our customers:
–>
Low- and mid-Tg.
These laminate materials are used in less demanding
applications within the consumer, automotive and industrial industries. Our revenues in the low- and mid-Tg markets are expected to decline as we continue to focus on the more
attractive, high-performance markets.
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Product Applications.
The below chart shows the characteristics and some major applications of various high-performance products and standard products
that we offer.
Market
Segment
Major Isola products
Characteristics
Major applications
High-performance
High-Tg
-FR406
-
High thermal limits (170
o
C or higher)
-
Advanced automotive applications
-
Communications and computing
-
Medical, military and aerospace
High-Tg, lead-free
-370HR
-410HR
-
High thermal limits (170
o
C or higher)
-
Lead-free variant compatible with automated lead-free soldering
-
Enterprise class servers
-
Entry-level routers and storage solutions
-
Mid-range computers
-
Advanced automotive electronics
High-speed digital
-FR408
-FR408HR
-IS415
-
High thermal limits (170
o
C or higher)
-
Better electrical properties
-
Greater transmission efficiency
-
More robust materials
-
Enterprise class servers and storage applications
-
High-speed routers and communication equipment
Halogen-free
-DE156
-
Do not use halogen compounds to impart fire
retardants
-
"Green" alternative
-
Smart phones
-
Tablets
-
Other high-end consumer products
Military / specialty
-P95
-P96
-406N
-
High thermal limits
-
Very low expansion
-
Aerospace equipment
-
Military and other specialty applications
Standard
Mid-Tg
-IS400
-
Moderate thermal limits (under 170
o
C)
-
Automotive electronics
Base low-Tg
-DE104
-FR402
-
Low thermal limits (125
o
C or less)
-
Basic automotive electronics
-
Entry-level consumer devices
We are able to customize our PCB laminate materials to meet particular customer requirements and maintain over 25,000 SKUs, or Stock Keeping Units.
CUSTOMERS AND SALES STRATEGY
Sales and Distribution
Isola's products are primarily sold through our direct sales forces located in Asia, Europe and the United States. As of August 1, 2011, we
employed approximately 62 direct sales and technical service representatives. In addition, we use third party distribution channels in the United States, Canada and Europe, as well as in select Asian
countries, primarily to address smaller PCB fabricators.
Strategic Customer and OEM Relationships
As a global leader in the high-performance segments of the PCB laminate materials industry, we have developed long-term
customer relationships with leading PCB fabricators such as AT&S, DDi, Gold Circuit
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Electronics,
Hitachi, Ibiden, Multek, Ruwel, Sanmina, TTM Technologies, Unimicron, Viasystems and WUS Printed Circuit. While only one of our customers accounted for more than 10% of our revenues in
each of fiscal 2010, fiscal 2009 and fiscal 2008 and the six months ended July 2, 2011 and June 26, 2010, we believe that our ten largest customers accounted for the majority of our
revenues in each of these periods.
We
also maintain strategic relationships with the OEMs our customers serve, such as Alcatel-Lucent, Bosch, Brocade, Cisco, Ericsson, Google, Hewlett-Packard, Huawei, IBM, Motorola, Nokia,
Siemens and Sun Microsystems (now Oracle). We work with OEMs to deliver highly customized products that meet their specific performance requirements on a cost-effective basis.
We
have established industry-specific marketing teams dedicated to collaborating with key players in particular end-markets on new product introductions. These teams collaborate with major
OEMs and their PCB fabricators, as well as with our research and development personnel, to specify proprietary resins that meet the specific performance criteria of next generation products.
While OEMs do not purchase laminate materials directly from Isola, they are an important part of the design process, significantly influencing the specific performance requirements of the
laminates and prepreg to be used in new products and in some cases pre-qualifying a limited number of approved suppliers whose materials may be incorporated into the product. In cases
where materials are pre-qualified, PCB fabricators or OEMs will select a particular laminate material among the pre-qualified materials, typically based on price,
service and performance. Once a particular PCB laminate material is designed in or qualified for use in a specific product line and one or more particular laminate suppliers are selected, these
suppliers tend to remain suppliers of choice, even as the PCBs for these products change to address OEM product line improvements or extensions or next generation developments.
We
generally sell our products directly to our customers. We do limited advertising in select trade publications, and we actively participate in major trade shows as our principal form of sales
promotion.
RESEARCH AND DEVELOPMENT
Isola's business strategy depends on the continued improvement of our PCB laminate technologies. As of August 1, 2011, we had approximately 64
employees engaged in research and development, with an additional 24 employees engaged in technical support and additional 19 employees engaged in OEM marketing activities. We maintain a major
research and development facility near our corporate headquarters in Chandler, Arizona, as well as facilities in Germany and Singapore to serve Europe and Asia, respectively. In addition, global teams
of technical and support personnel maintain collaborative partnerships with our customers and leading OEMs in order to help us maintain technological and product leadership. Our OEM marketing
function and research and development function are tightly integrated, and both report to our Chief Technology Officer.
Our
research and development activities are primarily focused on the following areas:
High-Speed / High-Frequency Applications
—We are developing laminate materials and related resin formulations that
can support increasingly critical high-speed/high-frequency applications. Specifically, we seek to continually develop improved dielectric platforms which deliver lower
dissipation factors and lower, controlled dielectric constants, and improved performance. We are also developing PCB laminate materials that will support faster data transfer rates in order to enhance
our portfolio of materials for radio frequency ("RF") applications. As a result of these development efforts, we plan to introduce two new products addressing these applications by the end of 2011:
I-Speed, addressing the emerging high-speed applications that go beyond 10 Gigabit Ethernet; and I-Tera, a next generation product for lead-free,
low-loss RF applications.
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–>
High-Tg, Lead-Free Compatible and High Reliability Products
—We are developing
resins, PCB laminate materials and process enhancements that can support lead-free compatible, high-performance applications that are designed to address increasingly pervasive
environmental regulations and lead-free initiatives. We are focusing on improving dielectric properties and reliability.
–>
Halogen-Free Platforms
—We are currently developing more advanced halogen-free
materials utilizing resin formulations with improved thermal and electrical properties to address the emerging needs of this market, and expect that these next generation halogen-free
products are likely to command higher prices and provide improved margins.
In
the six months ended July 2, 2011, we spent $5.2 on research and development activities and $0.5 million on capital expenditures related to these activities. In fiscal 2010 we spent
$9.5 million on research and development activities and $0.7 million on capital expenditures related to these activities, in fiscal 2009 we spent $9.2 million on research and
development activities and $0.4 million on capital expenditures related to these activities, and in fiscal 2008 we spent $10.7 on research and development activities and $0.1 million on
capital expenditures related to these activities.
NOTABLE RESEARCH AND DEVELOPMENT ACCOMPLISHMENTS
We continually invest in research and development, as well as in our relationships with key customers and OEMs, in order to develop products that
address the particular needs of the OEMs served by our customers. Many of our R&D efforts result in innovative new products that enable us to gain a "first mover" advantage over our competition
and leading market share. Because many OEM products have life cycles of six to 10 years, our research and development efforts can result in long-term, sustainable benefits.
Set
forth below are two examples of our R&D efforts.
370HR (High-Tg, Lead-Free)
Over the past several years, contract manufacturers and PCB fabricators have been compelled to use lead-free soldering alloys due to
increasing consumer and regulatory pressure. These alloys require soldering temperatures significantly higher than lead-containing alloys, and thus the laminate materials industry had
developed a cured laminate capable of withstanding the process. While the cured laminate chemistry solved the higher assembly temperature problem, it also introduced new problems such as thermal
expansion and proved harder for PCB fabricators to drill and process. It was clear that a new laminate product was needed to address these issues.
Through
a unique combination of our intellectual property and technical know-how, we developed a new, patented filler technology that significantly lowered the instance of thermal
expansion and improved the processing attributes of the laminate. This technology was introduced as our 370HR product, which we believe was the first high-Tg, lead-free product
of its kind to offer superior reliability and provide a compelling value proposition to OEMs.
Today,
we believe that the 370HR is acknowledged as the "best in class" product for high reliability applications across the telecommunications, high-end computing and high-end
automotive markets. We have a leading position in the high-Tg market segment, and enjoy numerous OEM design approvals for our products in this segment. By anticipating customer needs, we
were able to gain a "first mover" advantage over our competition, and our continuing development efforts have allowed us to maintain our leadership.
FR408HR (High-Speed Digital)
The rapid growth of smart phones, the increased use of social media and the expansion of cloud computing have pressured OEMs to develop
servers, routers and other infrastructure hardware that can operate at
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ever-higher
speeds. Due to increasing consumer and regulatory pressure, the components of these devices have also needed to be lead-free.
To
meet the requirements for increased speed and frequency, as well as environmental concerns, PCB fabricators needed a high-performance but cost-effective laminate that would
be compatible with existing manufacturing processes, handle the transition to lead-free soldering, and allow for low-loss signal transmission, all at a reasonable price.
In
early 2009, our research department began to address this industry-wide issue, initially using modeling and simulation programs to determine the efficacy of various potential chemical
combinations. Within three months, we had developed a potential materials solution, which was field-tested in collaboration with several PCB fabricators, presenting the successful results to
OEMs just weeks later. In total, it took us less than six months to go from concept to market introduction of our FR408HR laminate material, which we believe is the PCB industry's first and
leading lead-free compatible, high-speed and low-loss laminate.
Today,
the FR408HR is used by major high-end PCB fabricators globally and has been designed into several key OEM product lines. The FR408HR forms an important component of our
high-speed digital product portfolio, which we have been able to grow significantly over the last five years by understanding the needs of our customers and developing innovative products.
LAMINATE MANUFACTURING PROCESS
Isola maintains 11 manufacturing facilities, strategically located in the United States, Europe and Asia, including nine fully integrated laminate
facilities, one "pressing and finishing-only" facility to serve a customer in a relatively remote location in Asia and one fiberglass manufacturing facility in Italy. Our global network of
plants facilitates quick-turn manufacturing and delivery of product, and minimizes customers' shipping costs and inventory levels. We employ "six sigma" business processes to improve working capital
management and enhance factory productivity. We also employ manufacturing "best practices" throughout our 11 facilities and maintain a dedicated, internet-based private computer network for
manufacturing personnel to share information.
The
process for manufacturing our prepreg and laminates is capital intensive and requires sophisticated equipment as well as clean-room environments. The diagram below depicts the key
steps in our manufacturing process.
1.
The
preparation and formulation of specially designed resin systems.
2.
The
impregnation of specially designed fiberglass fabric with the resin system and partial curing of the resulting prepreg.
3.
The
assembly of single or multiple plies of prepreg and copper foil in a clean-room environment, which is referred to as "lay-up".
4.
The
lamination of the copper-clad assemblies under simultaneous exposure to intense heat, pressure and vacuum conditions, which is referred to as
"pressing".
5.
The
sizing and packaging of the laminates to customer specifications.
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Prepreg
is manufactured in a treater at the impregnation stage of the manufacturing process. A treater is a continually operating roll-to-roll machine that impregnates the
fiberglass or other reinforcement fabric with a resin formulation and then sequences the resin-impregnated fabric through a series of ovens which partially cure the resin-fiberglass.
We
manufacture CCL by assembling in a clean room one or more plies of prepreg stacked between sheets of specially manufactured copper foil purchased from outside vendors. Similar such assemblies are
then inserted into a large, multiple-opening vacuum lamination press, which subjects the assemblies to intense heat, pressure and vacuum conditions. After the press cycle is completed, the laminates
are removed from the press and sheeted, paneled and finished to customers' specifications. The CCL is then inspected and packaged for shipment to customers.
ENTERPRISE SOFTWARE
In 2010, Isola completed a long-term project to consolidate its laminate manufacturing facilities on a single ERP platform. Utilizing SAP
ERP software, this system established a common template across all of our laminate operations for the finance/accounting, manufacturing and sales and service functions.
The
global ERP template enables centralized financial planning and reporting and facilitates a fast and efficient financial closing process at the end of each fiscal period. This template provides a
flexible and standardized methodology to support our anticipated growth. By eliminating older legacy systems and adopting this new system, we believe we have reduced business risk and achieved a high
level of system and data integrity.
Our
SAP ERP platform is tightly integrated with our global business intelligence system. This analytical environment provides our management with rapid insight into changing operational conditions.
The business intelligence system offers a single source of information from multiple disciplines, including sales and marketing, supply-chain logistics, and financial planning and analysis. It also
provides specific, periodic operational scorecards to guide the management team's ongoing business improvement efforts.
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SOURCES OF RAW MATERIALS
Materials costs comprised approximately 70.6% of Isola's total cost of goods sold in the six months ended July 2, 2011, and 69.5% in fiscal
2010. Copper, resin and fiberglass are the principal raw materials used in the manufacture of our advanced PCB laminate materials.
We
have developed close working relationships with multiple suppliers for each of our three key raw materials. Our suppliers are required to comply with our stringent specifications and technical
requirements. In addition to copper, resin and fiberglass, Isola uses certain specialty materials for which it relies on a limited number of suppliers or a sole supplier. To date, we have not
experienced any major supply disruptions.
Prices
of raw materials, especially copper, are subject to price fluctuations. Historically, we have been able to pass through raw material price increases more readily in the
high-performance segment of the market than for our mid- or low-Tg materials.
INTELLECTUAL PROPERTY
We hold a position of technology leadership within the laminate industry, providing our customers with innovative solutions to meet their application
needs. This is a result of our significant investment in research and development, particularly with respect to innovative proprietary resin formulations and our comprehensive patent portfolio. As of
August 4, 2011, we held a total of 172 patents (including foreign counterparts) in the United States, Europe and Asia. While these patents are primarily directed to our resin formulations, we
also hold patents related to our thin-glass style and copper foil manufacturing processes. We continue to file new patent applications, for which terms extend up to 20 years from
the filing date in the United States. Our key patents include:
–>
Drum
Side Treated Foil, or DSTF, which enables the use of reverse treat copper technology widely used by the copper foil manufacturers;
–>
Styrene
Maleic Anhydride, or SMA, which we have used to formulate many products providing us with a leading edge in high-speed and
high-frequency markets; and
–>
two
patents related to our proprietary Talc mineral-based fillers used in our lead-free compatible PCB laminate materials.
Our
key U.S. patents described above have expiration dates ranging from 2015 to 2017.
In
order to protect our intellectual property rights, we rely on a combination of patent, trade secret, copyright and trademark laws, as well as employee and third-party nondisclosure agreements.
Because of the differences in foreign trademark, patent and other laws concerning proprietary rights, our intellectual property rights may not receive the same degree of protection in foreign
countries as they would in the United States. We believe that while the protection afforded by patent, trademark and trade secret laws may provide some advantages, the competitive position of
participants in our industry is principally determined by such factors as the technical and creative skills of their personnel, the frequency of their new product developments and their ability to
anticipate and rapidly respond to evolving market requirements. Therefore, we have focused our efforts on developing substantial expertise and know-how in our industry, and protecting that
know-how with confidentiality agreements and trade secrets.
In
addition to confidentiality agreements, we rely on a variety of methods to protect unpatented proprietary technology and trade secrets. To protect our proprietary materials formulae, only a select
few of our senior research and development employees have access to key resin formulations. In addition, we ship the ingredients for some of our resins to our offshore facilities in containers which
do not identify by name the components of the resin.
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We
rely on our trademarks, trade names and brand names to distinguish our products and services from the products and services of our competitors, and have registered or applied to register many of
these trademarks.
We
also license certain of our manufacturing processes to PCB fabricators and copper foil suppliers, from which we derive limited income.
We
periodically evaluate our competitors' product offerings in order to identify potential infringements of our intellectual property rights. When deemed appropriate, we have aggressively defended our
intellectual property rights through legal action.
COMPETITION
Isola has many competitors, ranging in size from large, international corporations, some of which are vertically integrated, to small regional
producers. Some of our competitors are well-established and have a larger market share, as well as greater manufacturing, financial, research and development and marketing resources than
we do. We compete for business in the PCB materials industry primarily on the basis of technology, product performance, innovative new product development, product qualification, price and customer
responsiveness and service. Our primary global competitors in the high-performance market, which we consider to be our core competency, include Guangdong Shengyi Sci. Tech. Co.,
ITEQ, Panasonic, Park Electrochemical, Rogers Corp. and Taiwan Union Technology Corporation. Unlike many of our competitors, we are focused solely on the design, development and manufacturing of PCB
laminate materials.
For
a more complete description of the risks we face related to competition, see "Risk Factors—Risks Related to Our Industry and Business". We face intense competition within the PCB
materials industry, including from diversified manufacturers and suppliers, which could negatively impact our results of operations and cause or market share to decline".
LEGAL PROCEEDINGS
From time to time, Isola is subject to various legal proceedings that arise in the normal course of our business activities. In addition, from time
to time, third parties may assert
intellectual property infringement claims against us. As of the date of this prospectus, we are not a party to any litigation the outcome of which, if determined adversely to us, would individually or
in the aggregate be reasonably expected to have a material adverse effect on our results of operations or financial position.
REGULATION
Isola's operations are subject to various environmental laws and regulations that limit discharges into the environment, establish standards for the
handling, generation, use, emission, release, discharge, treatment, storage and disposal of, or exposure to, hazardous materials, substances and waste, and require cleanup of contaminated soil and
groundwater. These laws and regulations are complex, change frequently and have tended to become more stringent over time. Failure to comply with these laws and regulations could have a material
adverse effect on our operations, including the temporary or permanent shut down of our facilities. Many of these laws and regulations provide for substantial fines and penalties and, in some cases,
criminal sanctions for violations. Some of these laws and regulations may also impose liability for property damage and personal injury stemming from the presence of, or exposure to, hazardous
substances. For example, under the Superfund Act and similar state laws in the United States, or under comparable laws in foreign jurisdictions, if one of our manufacturing facilities were to be
identified by the applicable governmental authority as a hazardous waste disposal site or contaminated area, all parties who may have contributed to
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any
waste, including us, could be jointly and severally liable for the cost of cleanup. Generally, these sites are locations at which numerous persons disposed of hazardous waste.
We
are required to certify compliance with various material content restrictions in our products based on laws of various jurisdictions or territories, such as the Restriction of Hazardous Substances
("RoHS") directives in the European Union, and comparable directives in China, which restrict the use of various hazardous materials, including lead, in the manufacture of certain types of electronic
and electrical equipment. The European Union's Registration, Evaluation, Authorization and Restriction of Chemicals regulations ("REACH"), requires companies manufacturing or importing certain
chemical substances into the European Union to register those substances. Disclosure by manufacturers that they use such materials could result in pressure from customers and other constituencies. We
do not believe that these laws or regulations currently apply to our operations, although we continually monitor changes in interpretations of these laws, and regulations adopted under them, for
potential application to our operations. These laws and regulations provide for substantial fines and penalties for violations and, if applicable, could require the change or discontinuation of
certain operations, any of which could have a material adverse effect on us.
Our
operations are also governed by laws and regulations relating to workplace safety and worker health. We believe we are in material compliance with these laws and regulations. We also believe that
we are in material compliance with applicable labor and employment laws and regulations.
EMPLOYEES
As of August 1, 2011, Isola had approximately 2,088 employees worldwide. Of these employees, 1,703 were engaged in manufacturing operations
and 385 were employed in engineering, sales or administrative positions. We consider our employee relations to be good.
As
of August 1, 2011, approximately 135 of our employees (or 6.5% overall) were members of one of the following unions: in Singapore, the United Workers of Electronic and Electrical Industries;
in Germany, IG Metall; and in Italy, FEMCA CISL and FILTEA CGIL. Our relationship with these unions generally has been satisfactory. Within the last five years, we have not experienced any work
stoppages at any of our facilities.
PROPERTIES AND FACILITIES
Isola's corporate headquarters are in leased office space located in Chandler, Arizona. We maintain manufacturing facilities and research and
development laboratories globally. We believe that our facilities are adequate for our current and projected needs.
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The
following table sets forth information concerning our principal facilities owned or leased by us.
Location
Owned /
leased / land
use rights
Approximate
square
footage
Expiration of
lease or land
use rights
Type of facility
Elk Grove, California
Owned
44,000
N/A
Manufacturing
Chandler, Arizona
(3100 W. Ray Road)
Leased
18,500
May 31, 2013
Corporate and regional offices
Chandler, Arizona
(165 S. Price Road)
Owned
97,000
N/A
Manufacturing; research and development
Franklin, New Hampshire
(1)
Owned
99,700
N/A
Manufacturing
Fremont, California
(1)
Owned
76,800
N/A
Manufacturing
Ridgeway, South Carolina
Owned
110,000
N/A
Manufacturing
Total in North America
446,000
Hong Kong
Leased
11,400
May 31, 2012
Regional offices
Taoyuan, Taiwan
Owned
138,600
N/A
Manufacturing
Yangmei, Taiwan
Owned
90,700
N/A
Manufacturing
Huizhou, China
(2)
Land Use Right
220,500
January 1, 2048
Manufacturing
Suzhou, China
(2)
Land Use Right
146,500
December 31, 2046
Manufacturing
Kuching, Malaysia
Leased
39,200
April 30, 2012
Manufacturing
Singapore
Leased
134,200
December 31, 2019
Manufacturing; research and development
Total in Asia
781,100
Duren, Germany
Owned
826,300
N/A
Manufacturing; regional offices; research and development
Brugherio, Italy (glass fabric)
Leased
252,000
March 9, 2023
Manufacturing
Total in Europe
1,078,300
TOTAL WORLDWIDE
2,305,400
(1)
These facilities have been closed and are currently being marketed for sale.
(2)
There is no private land ownership in China. Land in China is owned by the government and cannot be sold to any individual or entity. Instead, the government grants
or allocates
landholders a "land use right", which is sometimes referred to informally as land ownership. Land use rights are granted for specific purposes and for limited periods. Each period may be renewed at
the expiration of the initial and any subsequent terms. Granted land use rights are transferable and may be used as security for borrowings and other obligations. We have been issued land use right
certificates for our property located in Huizhou, China until 2048 by the municipal government of Boluo and for our property located in Suzhou, China until 2046 by the municipal government of Suzhou
Industrial Park. Such certificates may be renewed upon our application and the municipal governments' approval.
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FINANCIAL INFORMATION FOR SEGMENTS AND GEOGRAPHICAL AREAS
For information regarding revenues from external customers by segment and geographic area, measures of profit or loss and total assets by segment and
long-lived assets by geographic area, see Note 14 to our consolidated financial statements and Note 12 to our unaudited interim financial statements, included elsewhere in
this prospectus.
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Management
Prior to this offering, we were a private company controlled by our Sponsors. The following table sets forth certain information
regarding our executive officers, other key employees and directors.
Name
Age
Position
Raymond Sharpe
62
President, Chief Executive Officer and Director
F. Gordon Bitter
68
Executive Vice President and Chief Financial Officer
Tarun Amla
47
Executive Vice President and Chief Technology Officer
Mathew LaRont
47
President, Asia and Global Supply Chain Officer
Robert Chaney
51
President, Americas
Karl Stollenwerk
53
President, Europe
Kevin Burns
47
Director
Donald Colvin
58
Director
H. McIntyre Gardner
50
Director
Jordon Kruse
40
Director
Jeffrey McCreary
54
Director
Eric Noeth
26
Director
Cassidy Traub
30
Director
EXECUTIVE OFFICERS AND KEY EMPLOYEES
Raymond Sharpe
is the President and Chief Executive Officer of Isola, a position that he has held
since he joined us in June 2004. Mr. Sharpe has also served as a member of our board of directors since September 2011, and served as a member of the board of directors of the Sponsor Holding
Company since June 2004. Prior to joining Isola, Mr. Sharpe was the Chief Executive Officer of Cookson Electronics and a member of the board of directors of Cookson Group Plc, a position
he held for over ten years. Mr. Sharpe helped build Cookson Electronics into a leading global supplier of materials and equipment servicing the PCB, PCB assembly and semiconductor packaging
markets. In addition, Mr. Sharpe served for ten years as a director for SPS Technologies, Inc., a NYSE-listed manufacturer of specialty materials for the aerospace industry.
He also currently serves as a director of Cytec Industries Inc., a NYSE-listed specialty chemicals company. Mr. Sharpe received a bachelor of arts degree from East Carolina
University and has over thirty years of experience in the electronics industry. In April 2011, Mr. Sharpe was elected to serve on the board of IPC, the industry association for printed circuit
board and electronics manufacturing service companies. Mr. Sharpe was selected to serve as a member of our board of directors because of his extensive leadership experience in the electronics
industry, his intimate knowledge of Isola's business and operations, and his deep understanding of both our markets and our competitors.
F. Gordon Bitter
is the Executive Vice President and Chief Financial Officer of Isola, a position that he has held since he joined us in 2008. Prior to
joining Isola, Mr. Bitter was the Senior Vice President and Chief Financial Officer of Plexus, a Nasdaq-listed contract manufacturer of high-end technology products servicing the
wireless infrastructure, networking, medical and aerospace markets. Prior to his five year tenure at Plexus, Mr. Bitter was the Senior Vice President and Chief Financial Officer of Hadco
Corporation, a NYSE-listed PCB manufacturer. Mr. Bitter received a
bachelor of science degree in mathematics from Bucknell University and an M.B.A. from the Wharton School of the University of Pennsylvania.
Tarun Amla
is the Executive Vice President and Chief Technology Officer of Isola, and is responsible for our global research and technology and global
OEM marketing programs with a focus on new product development. Prior to his current role, Mr. Amla served in various leadership capacities, including as Vice
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President
of Operations and Technology and Vice President of Marketing and Technology. Prior to joining Isola, Mr. Amla was the Director of Operations for AlliedSignal Laminate Systems in
Singapore. During his more than twenty years in the electronics industry, Mr. Amla has gained extensive experience in general management, manufacturing operations, engineering, product
technology, marketing and sales. Mr. Amla received a bachelor of science degree in mechanical engineering from the National Institute of Technology Calicut in India, a master of science degree
in engineering from Arizona State University with an emphasis on modeling and simulation, a master of science degree in mechanical engineering with a concentration in computational mechanics from
Purdue University, and an M.B.A. from the Kellogg School of Management at Northwestern University.
Mathew LaRont
is the President, Asia, a position he has held since June 2011. In July 2009, Mr. LaRont assumed additional responsibility as
Isola's Global Supply Chain Officer, a position that he still holds. In his current roles, Mr. LaRont is responsible for all aspects of our Asian operations and oversees our strategic global
supply chain, managing supply contracts and supplier licensing. Prior to his current position, Mr. LaRont served as the President, Americas and prior to that, Vice President, Sales and
Marketing—Asia. Mr. LaRont joined Isola in 2004. Prior to joining Isola, Mr. LaRont held various positions with Solectron Corporation, a global electronics manufacturing
company, including Director of Global Materials and General Manager in Taiwan. Prior to his tenure at Solectron Corporation, Mr. LaRont served as the Director of Sales and Operations for
Sanmina-SCI Corporation, a Nasdaq-listed integrated electronics manufacturing service provider, and held various managerial positions with Praegitzer Industries, Inc., including
Financial Controller and Regional Sales Manager for the West Coast. With over twenty years of electronics industry experience, Mr. LaRont brings a broad range of expertise to Isola.
Robert Chaney
is the President, Americas, a position he has held since joining us in August 2011. In his current role, Mr. Chaney is responsible
for all sales, customer service and manufacturing operations in the Americas. Prior to joining Isola, Mr. Chaney was President of the PCB Interconnect Technologies division at
Sanmina-SCI Corporation, a position he held from June 2010 to December 2010. Prior to Sanmina-SCI, Mr. Chaney was President of First Mile Technologies, a provider of
Internet, security monitoring, fiber connectivity, phone, and cable television services, a position he held from January 2004 to June 2010. Mr. Chaney has held senior-level positions with a
number of other high-technology companies, including ATMI, Nanovation Technologies, AT&T and IBM. Mr. Chaney is a graduate of Purdue University and has more than twenty years of
experience in the electronics industry.
Karl Stollenwerk
is the President, Europe, a position he has held since May 2009. In his current role, Mr. Stollenwerk is responsible for
managing all operations for the Isola and Isola Fabrics business in Europe. Before assuming his current position, Mr. Stollenwerk was Director of Sales, General Manager and Managing Director of
our Isola Dueren operation. Mr. Stollenwerk joined Isola in October 1987 and, during his more than twenty years with Isola, he has acquired extensive experience in marketing and sales in the
electronics industry. He has a broad knowledge of all customer-related aspects of the European PCB industry.
NONEMPLOYEE DIRECTORS
Kevin Burns
has served as a member of our board of directors since September 2011, and served as a
member of the board of directors of the Sponsor Holding Company since June 2004. Mr. Burns has been a Partner in the Operations Group of TPG Capital, a private equity investment firm, since
2003. In March 2008 he became the Partner in Charge of TPG Capital's Manufacturing/Industry Sector. Prior to joining TPG Capital, he served as Executive Vice President and Chief Materials Officer of
Solectron Corporation, an electronics manufacturing services provider. Prior to joining Solectron, Mr. Burns served as Vice President of Worldwide Operations of the Power Generation Business
Unit of Westinghouse Corporation, and President of Westinghouse Security Systems. Prior to Westinghouse, he was a consultant at
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McKinsey & Company, Inc.
and spent three years at the General Electric Corporation in various operating roles. Mr. Burns received a bachelor of science degree in mechanical
and metallurgical engineering (cum laude) from the University of Connecticut and received an M.B.A. from the Wharton School of the University of Pennsylvania. He currently serves on the boards of
directors of Armstrong World Industries, Graphic Packaging Holding Co. and American Tire Distributors. From 2008 to 2011, Mr. Burns also served on the board of directors of Freescale
Semiconductor Holdings I, Ltd. Mr. Burns was selected to serve as a member of our board of directors because of his extensive management expertise and his knowledge of both our Company
and industry.
Donald Colvin
has served as a member of our board of directors since September 2011. Mr. Colvin joined ON Semiconductor and SCI LLC as
Senior Financial Director in March 2003 and currently serves as Executive Vice President and Chief Financial Officer. Before joining ON Semiconductor, beginning in 1998, Mr. Colvin served as
Vice President of Finance and Chief Financial Officer at Atmel Corporation, a manufacturer of advanced semiconductors. Mr. Colvin served as Chief Financial Officer of a subsidiary of Atmel from
1995 to 1998. From 1985 to 1995, he held various positions with European Silicon Structures, most recently as Chief Financial Officer. Mr. Colvin also held various financial positions with
Motorola Semiconductors Europe from 1977 to 1985. Mr. Colvin holds a bachelor of arts degree in economics and an M.B.A. from the University of Strathclyde, Scotland. From May 2007 to August
2011, Mr. Colvin served as a member of the board of directors of Applied Micro Circuits Corporation, a Nasdaq-listed provider of integrated circuits for processing, transporting and
storing information. Mr. Colvin was selected to serve as a member of our board of directors because of his finance and accounting expertise, managerial experience and knowledge of our industry.
H. McIntyre Gardner
has served as a member of our board of directors since September 2011. Mr. Gardner retired in 2008 from Merrill
Lynch & Co., Inc. as the Head of Americas Region and Global Bank Group, Global Private Client. Prior to joining Merrill Lynch in July 2000, Mr. Gardner was the President
and Chief Operating Officer of Helen of Troy Limited, a Nasdaq-listed personal care products manufacturer. Mr. Gardner has also been a member of the board of directors of Spirit Airlines, a
Nasdaq-listed provider of passenger airline services, since 2010. Mr. Gardner received a bachelor of arts degree from Dartmouth College. Mr. Gardner was selected to serve as a member of
our board of directors because of his financial management expertise, qualifications as a business executive and his prior experience as a director of both public and private companies.
Jordon Kruse
has served as a member of our board of directors since September 2011, and served as a member of the board of directors of the Sponsor
Holding Company since October 2010. Mr. Kruse is a Managing Director at Oaktree Capital Management, LP, a Los Angeles based institutional money manager. He is a member of Oaktree's
Principal Fund, which focuses on investments in private equity and distressed debt for control and is responsible for the aviation, packaging, chemicals, building products and consumer apparel
sectors. Prior to joining Oaktree in 2001, Mr. Kruse was an attorney at the law firm of Kirkland & Ellis LLP, which he joined in 1997. Mr. Kruse serves on the board of
directors of Spirit Airlines, Inc., a Nasdaq-listed provider of passenger airline services, Dayton Superior Corporation, a manufacturer and distributor of products used in concrete
construction, Chesapeake UK Holding Ltd, a supplier of specialty paperboard packaging products in Europe, Nordenia International AG, a manufacturer of plastic films and flexible packaging, BP
Clothing LLC, an apparel company, Cyanco Corporation, a manufacturer of sodium cyanide used in the gold mining industry, and CF Group Inc., a commercial furniture company.
Mr. Kruse received a bachelor of arts degree from the University of Virginia and a J.D. from Northwestern University. Mr. Kruse was selected to serve as a member of our board of
directors because of his financial expertise, knowledge of our Company and his general business experience.
Jeffrey McCreary
has served as a member of our board of directors since September 2011, and served as a member of the board of directors of the Sponsor
Holding Company since January 2006. Mr. McCreary is an
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independent
management consultant who retired in 2005 as a Senior Vice President for Texas Instruments. In this capacity he was responsible for Texas Instruments' sales and account management, field
technical support and channel marketing strategies around the globe. Prior to joining Texas Instruments, Mr. McCreary held engineering and strategic marketing positions within the Bell System.
Mr. McCreary received a bachelor of science degree in electrical engineering and an honorary doctorate of engineering from the Rose-Hulman Institute of Technology.
Mr. McCreary currently serves on the board of Gennum Corporation, a Toronto Stock Exchange-listed provider of semiconductor products and intellectual property cores for consumer connectivity,
enterprise, video broadcast and data communications applications. Mr. McCreary was selected to serve as a member of
our board of directors because of his international experience in business, his background in engineering, and his extensive experience in the technology industry.
Eric Noeth
has served as a member of our board of directors since September 2011, and served as a member of the board of directors of the Sponsor
Holding Company since October 2010. Mr. Noeth has been a member of the technology-focused investment practice of TPG Capital, a private equity investment firm, since August 2009. Prior to
joining TPG Capital, Mr. Noeth worked in Morgan Stanley's Investment Banking Division, where he focused on advising companies in the technology and telecom industries. Mr. Noeth joined
Morgan Stanley in 2007 after receiving a bachelor's degree in business administration from Indiana University, where he graduated with honors. Mr. Noeth was selected to serve as a member of our
board of directors because of his finance and banking background and experience in the technology industry.
Cassidy Traub
has served as a member of our board of directors since September 2011. Mr. Traub is a Vice President at Oaktree Capital
Management, LP, a Los Angeles based institutional money manager. He is a member of Oaktree's Principal Fund, which focuses on investments in private equity and distressed debt for control, and
is responsible for the packaging, chemicals, technology and business services sectors. Prior to joining Oaktree in 2005, Mr. Traub was an investment banker at UBS Investment Bank, which he
joined in 2003. Mr. Traub serves on the board of directors of Crimson Exploration Inc., a Nasdaq-listed energy company, Chesapeake UK Holding Ltd, a supplier of specialty
paperboard packaging, and Cyanco Corporation, a manufacturer of sodium cyanide used in the gold mining industry. Mr. Traub received a bachelor of arts degree in economics from Princeton
University. Mr. Traub was selected to serve as a member of our board of directors because of his financial expertise, knowledge of our Company and his general business experience.
COMPOSITION OF THE BOARD OF DIRECTORS
Controlled Company Exemption.
After the completion of this offering, the Sponsors and their affiliates will control a majority of the voting power of our
outstanding ordinary shares (approximately         % if the underwriters do not exercise their option to purchase additional shares). In addition, at the completion of this offering, we will
enter into a shareholders agreement with our Sponsors that will give each of TPG Capital and Oaktree the right to nominate representatives to our board of directors, and require all of our Sponsors to
vote for the election of these nominees to our board of directors, so long as TPG Capital and Oaktree own specified percentages of our outstanding voting securities. See "Certain Relationships and
Related Party Transactions—Agreements with Our Sponsors—Shareholders and Registration Rights Agreement". As a result, we are a "controlled company" within the meaning of the
Nasdaq corporate governance standards. Under the Nasdaq rules, if more than 50% of the voting power of a listed company is held by an individual,
group or another company, the listed company is a "controlled company" and may elect not to comply with certain Nasdaq corporate governance standards, including:
–>
the
requirement that a majority of our board of directors consist of independent directors;
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–>
the
requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the
committee's purpose and responsibilities;
–>
the
requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose
and responsibilities; and
–>
the
requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees.
We
have adopted charters for our audit, nominating and corporate governance and compensation committees, intend to conduct annual performance evaluations for these committees, and initially expect all
of our committee members and a majority of our board of directors to be considered independent directors under the independence criteria of Nasdaq. All of our directors, except Mr. Sharpe, are
considered independent directors. Although we intend to comply with these listing requirements whether or not we are a controlled company, there is no guarantee that we will not take advantage of the
controlled company exemptions in the future. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements
of Nasdaq.
Any
director may be removed from office by our shareholders. Our Principal Sponsors are together the beneficial owners of a majority of our ordinary shares and will be able to unilaterally remove
directors.
BOARD COMMITTEES
Prior to the consummation of this offering, we anticipate that our board of directors will establish an audit committee, a compensation committee and
a corporate governance and nominating committee, as discussed below.
Audit Committee.
Our audit committee will be responsible for, among other things, making recommendations concerning the engagement of our independent public
accountants, reviewing with the independent public accountants the plans and results of the audit engagement, approving professional services provided by the independent public accountants, reviewing
the independence of the independent public accountants, considering the range of audit and non-audit fees and reviewing the adequacy of our internal accounting controls. Our audit
committee will be comprised of Messrs. Colvin (chairman), Gardner and McCreary, each of whom is a financial expert for purposes of the Nasdaq rules.
Compensation Committee.
The compensation committee will be primarily concerned with administering programs and policies regarding the compensation of executive
officers and employee benefit plans. The committee is responsible for determining compensation of our executive officers and other employees and overseeing the administration of all employee benefit
plans and programs. Our compensation committee will be comprised of Messrs. Gardner (chairman), Burns and Kruse.
Corporate Governance and Nominating Committee.
The corporate governance and nominating committee will be primarily concerned with identifying individuals qualified
to become members of our board of directors, selecting the director nominees for the next annual meeting of the shareholders and reviewing our corporate governance policies. The committee will be
responsible for reviewing director compensation and benefits, overseeing the annual self-evaluations of our board of directors and making recommendations to the board concerning the
structure and membership of the other board committees. Our corporate governance and nominating committee will be comprised of Messrs. McCreary (chairman), Noeth and Traub.
For
so long as we are a controlled company within the meaning of the Nasdaq listing standards, each of TPG Capital and Oaktree have the right to designate one member to our compensation committee, and
one
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member
to our corporate governance and nominating committee. See "Certain Relationships and Related Party Transactions—Agreements with Our Sponsors-Shareholders and Registration Rights
Agreement".
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no compensation committee interlocks; no executive officer of ours serves as a member of the board of directors or the compensation
committee of another entity that has an executive officer serving on our board of directors.
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COMPENSATION DISCUSSION AND ANALYSIS
This section explains the material elements of the compensation of our named executive officers:
–>
Raymond
Sharpe, President and Chief Executive Officer
–>
F.
Gordon Bitter, Executive Vice President and Chief Financial Officer
–>
Tarun
Amla, Executive Vice President and Chief Technology Officer
–>
Robert
Haskins, former President, Asia
–>
Mathew
LaRont, President, Asia and Global Supply Chain Officer
How have compensation decisions historically been made?
Prior to this offering, we were a privately held company controlled by our Sponsors. Accordingly, we have not been subject to stock exchange listing
or SEC rules, including those requiring that a majority of our board of directors be independent or regarding the formation and functioning of board committees, such as the compensation committee.
Prior to this offering, the non-employee members of the Sponsor Holding Company's board of managers, which we refer to in this section as our board of directors, have functioned as a
compensation committee and established our general compensation philosophy. The board of directors has annually reviewed and approved any changes in the compensation of our executives and granted
options, restricted units and other awards.
Historically,
our chief executive officer has made recommendations to our board of directors and has participated in discussions regarding executive compensation, but has not participated in any
discussions or decisions regarding his own compensation. Members of our corporate finance, legal and human resources staffs have provided data and analyses to the board of directors at their request.
In
late 2009, we engaged Mercer, a global human resources and financial services consulting firm, to conduct a market review of our executive compensation program. To analyze our executive
compensation program, Mercer used two market references to compare our compensation practices for our executives to those in our market:
–>
Published Compensation Surveys:
Two private surveys regarding executive compensation in the high
technology industry: the Mercer US Global Premium Executive Remuneration Suite and the Towers Watson Top Management Compensation Survey; and
–>
Select Peer Group:
Publicly available data for a competitive peer group of publicly traded companies in
the electronic manufacturing industry of similar revenue size and market capitalization.
Our
2010 peer group consisted of the following companies:
–>    Merix Corp*
–>    H.B. Fuller
–>    Mentor Graphics
–>    Powerwave Technologies
–>    RF Micro Devices
–>    Rogers Corporation
–>    SMART Modular Technologies
–>    TTM Technologies
–>    Viasystems Group*
–>    Zebra Technologies
*
Effective February 16, 2010, Merix Corp merged with Viasystems Group.
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Mercer benchmarked each of the elements of our 2010 executive compensation, including base salaries, performance-based annual incentives and
long-term equity incentive awards, against those of other executives in the selected peer group as well as the published compensation
surveys and reported their findings to management. Our chief executive officer then presented the Mercer analysis to our board of directors. The Mercer analysis indicated that the base salaries and
the target annual incentives for each of our named executive officers were generally below the market median. Additionally, the Mercer analysis indicated that our long-term equity
incentive levels (when a 3-year average grant was assumed, as we have not typically provided annual equity grants) were below the 25th percentile.
The
Mercer US Global Premium Executive Remuneration Suite included data from 2,757 companies in approximately 52 major industry classifications, including high tech manufacturing. The Towers Watson
Data Services: Survey Report on Top Management Compensation included data from 3,422 companies in a variety of industries, including high tech manufacturing. The Mercer and Towers Watson survey data
was equally weighted.
For
each reviewed position, Mercer blended peer group data with the broader surveys, equally weighing the selected peer group and broader published compensation survey data. This blended data was used
to benchmark base salaries, annual incentive and long-term incentive opportunities as well as total compensation.
In
2010, we again engaged Mercer to conduct a market overview of our executive compensation program for 2011.
How is the compensation program likely to evolve after the offering?
In 2011, immediately prior to the completion of this offering, we will reorganize as a Cayman Islands company, Isola Group Ltd., and both the
Sponsor Holding Company and the Sponsor Limited Partnership will be liquidated. In connection with this offering, the board of directors of our Cayman Islands company, which we refer to in this
section as our new board of directors, will establish a compensation committee that will be comprised of only certain members of the new board of directors. For additional information regarding the
compensation committee of our new board of directors that will oversee our compensation program following the completion of this offering, see "Management—Board Committees." We expect that
our compensation committee will meet several times per year to determine the components and levels of compensation and the appropriate performance metrics. While we expect that our
post-offering compensation plans and programs will not significantly differ from our historical practices, there may be changes to some of our compensation practices as a public company,
such as annual equity incentive awards, long-term equity incentive awards and changes in the metrics that we use to make annual cash incentive awards, to help motivate executive officers
to achieve and exceed our business objectives, and to align the incentives of our officers with the long-term interests of our shareholders.
What types of equity compensation awards have historically been made, and how will our equity compensation practices change after the offering?
Historically, our equity compensation awards granted to executive officers and other employees have been made through awards to purchase limited
partner common units in the Sponsor Limited Partnership (the "partnership units"), as well as profits interests in the Sponsor Limited Partnership ("profits interest units"). Prior to completion of
this offering, the Sponsor Limited Partnership owns 100% of our current Luxembourg Holding Company, and is wholly-owned by the Sponsor Holding Company.
In
2004, following the acquisition of Isola by TPG Capital and certain of our other Sponsors, the Sponsor Limited Partnership established a "profits interest program" under which the Sponsor Limited
Partnership granted profits interest units to certain of our senior executives, including Mr. Sharpe and Mr. Amla. The
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Sponsor
Limited Partnership's profits interest program allows participants to share in the increase in value of Isola above certain valuation thresholds related to the purchase price paid for Isola in
the 2004 acquisition (in this case, at 2x and 3x such price). The program was intended to provide an incentive to management to keep focused on our long-term value. The profits interest
units vest after our Sponsors have received certain returns on their investment. All profits interest units are expected to be redeemed prior to the consummation of this offering.
In
2004, the Sponsor Limited Partnership also established an option plan (the "2004 Option Plan") to permit grants of options to purchase partnership units ("options") to our executive management and
other employees.
In
2007, the Sponsor Limited Partnership established a restricted unit plan (the "2007 Restricted Unit Plan") to allow us to make grants of restricted partnership units ("restricted units"). A number
of grants of these restricted units were made to key employees to provide an economic incentive for them to enhance the value of the Company and as a retention vehicle.
In
the fourth quarter of 2010, we issued additional equity interests in the Sponsor Holding Company to the lenders who participated in our mezzanine credit agreement. The issuance of these equity
interests substantially diluted the value of the partnership units. This dilution also diminished the value of the outstanding options that had been previously granted under the 2004 Option Plan. As a
result,
the outstanding option grants provided little or no incentives to the recipients, particularly since there was no public market for our securities.
To
address this reduction in the value of the outstanding options, our board of directors authorized two new programs. The first program for eligible participants was the offer to either retain their
existing options with the originally issued terms or surrender their options for $0.53 in cash for each vested option payable immediately as well as $0.53 for each unvested option payable upon
completion of the unvested option's original service-based vesting condition.
The
second program was the opportunity to participate in a cash incentive plan. Under this plan, the Company would accrue 5% of each participant's annual base salary and pay out these accrued amounts
to participants at the end of 2012 provided that we achieved certain financial objectives and that a liquidity event, such as the public offering of our securities, occurred prior to
December 31, 2012. Eligible employees were required to surrender their outstanding options in order to participate in these programs; all eligible employees agreed to participate.
A
small number of our most senior executives, including our named executive officers, were not eligible to participate in these two programs. Rather, this group agreed to the cancellation of their
prior option grants in exchange for new equity awards comprised of new option and restricted unit grants, both of which were issued on October 8, 2010. Both the new option and restricted unit
grants vest ratably over three years on the anniversary date of the initial award, assuming continued employment with the Company and, with respect to the restricted units, provided that there has
been either (i) a change in control, or (ii) an initial public offering of equity securities of the Company and that the participant may sell such securities in a public market free of
any "market stand-off" or "lock-up" restrictions.
In
connection with the completion of this offering, our new Cayman Islands company, Isola Group Ltd., will establish a new long-term incentive plan that will allow our executive
management to receive equity awards, such as stock options, restricted stock and restricted stock units for ordinary shares of Isola Group Ltd. Except for the profits interest units, which are
expected to be redeemed prior to the consummation of this offering, all of the existing ownership interests and equity awards of executive management and other employees in the Sponsor Limited
Partnership, including the options and restricted
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units,
will, concurrent with this offering, be converted into equivalent ordinary shares and awards for ordinary shares, respectively, of Isola Group Ltd., which will be publicly traded.
COMPENSATION PROGRAMS AND PRACTICES FOR 2010
What were the objectives and principles of our named executive officers' compensation?
Our philosophy is to fairly compensate all of our employees, including our named executive officers, for their specific contributions to our success.
Compensation is designed to both motivate and retain employees taking into account both short-term and long-term considerations, all within the context of our ability to
finance any compensation programs. We consider, among other things, our financial condition, compensation practices of our peer group companies and the market surveys provided by Mercer, and general
economic trends (including their likely effects on our projected profitability and cash flows) in making compensation decisions.
Our
2010 executive compensation program was designed to achieve the following objectives:
–>
Attract,
motivate and retain the talented people needed to lead a complex, high-technology business.
–>
Motivate
executives to make decisions and pursue opportunities that are aligned with the interests of our Sponsors but without exposing us to undue risks.
–>
Balance
our financial performance and the executive's contributions to that success, including by making variable cash compensation comprise a greater percentage of
overall cash compensation for more senior executives.
–>
Emphasize
a greater component of cash compensation in our overall compensation package, given the limited equity pool approved by our Sponsors from which to make
grants to executives.
–>
Increase
earnings and cash flow to meet debt service requirements and to generate funds to finance growth by establishing Consolidated Adjusted EBITDA (as defined
under our senior secured credit agreement) targets to determine annual cash incentive awards.
What were the components of our named executive officers' 2010 compensation program and how did they reflect the objectives and principles described  above?
The principal components of our named executive officers' compensation program in 2010 were as follows:
–>
Base Salary.
This element provides a fixed component of compensation that is not tied to our financial
or operational performance. Base salary offers regular compensation for the fulfillment of regularly assigned duties and responsibilities. Although salaries are typically reviewed each year, there are
no assurances of annual increases.
–>
Annual Cash Incentive.
Our variable incentive compensation plan ("Bonus Plan") rewards executives for
meeting or exceeding Consolidated Adjusted EBITDA (as defined under our senior secured credit agreement) targets tied to our financial plan for the year. The opportunity to earn a substantial cash
award under the Bonus Plan places a significant percentage of total cash compensation "at risk" and dependent on achieving our annual earnings and cash flow objectives. Our board of directors looked
at the selected peer group data and the market surveys provided by Mercer to determine the allocation between short-term cash incentives, including Bonus Plan awards, which are based on
the current year's financial performance, and longer-term equity incentives for our executives. The variable portions of our executive compensation packages are designed to motivate our
executives to pursue present opportunities that are aligned with the Company's long-term interests while not encouraging undue risk taking.
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–>
Long-term Equity Incentives.
A substantial part of compensation which is also "at risk" is
longer-term equity based compensation in the form of options, restricted units and profits interest units in the Sponsor Limited Partnership. The incentive to participants in these
arrangements is not only related to our financial performance, but also to our ability to establish a market for our equity securities, either through a public offering of our securities or other
liquidity event. Executives have typically been awarded one-time grants at or close to their date of hire. However, as previously discussed, when we refinanced our first-and
second-lien credit facilities in the fourth quarter of 2010, we cancelled most of these outstanding options, which were then under water, and made new grants of options and restricted
units to certain executive officers. All other holders of canceled options became participants in a long-term cash incentive plan.
–>
Employment and Change of Control Agreements.
We have employment agreements with our executive officers
that set forth severance and other arrangements following the executive's termination "without cause" or a change in control which results in the executive's separation from the Company. We believe
these arrangements with our executive officers are appropriate to ensure they will not be distracted by personal considerations in the case of a potential acquisition of the Company or other strategic
transaction.
Our
named executive officers are eligible to participate in our employee benefit plans on the same terms as our other employees. These benefits include a 401(k) plan, group health insurance and short-
and long-term disability insurance. We do not have an active defined benefit retirement plan, although Mr. Amla is a vested participant in our former pension plan which was frozen
on December 31, 2003 and former supplemental executive retirement plan, or SERP, which was frozen on January 31, 2009.
We
believe that the combination of these components of compensation achieves the objectives and follows the principles that our board of directors has established. In the following sections, we
provide more detail about the various components of our 2010 compensation programs and their roles in achieving our objectives consistent with our principles.
How were base salaries determined?
In fiscal 2009, base salaries for our named executive officers were maintained at the same level as the prior year due to the impact of the global
recession on our business. Improving business conditions in fiscal 2010, however, afforded us an opportunity to make selective salary increases, effective January 2010. The following chart sets forth
the increases in the
base salaries of our named executive officers as well as the percentage change between fiscal 2009 and 2010:
Percentage deviation in 2010 base
salary from 2009 market data
(1)
Percentage
change
2009/2010
Named executive officer
2009 Base
salary
2010 Base
salary
25th
Percentile
Median
75th
Percentile
Raymond Sharpe
$
546,364
$
546,364
0
%
6.1
%
-6.8
%
-14.8
%
F. Gordon Bitter
330,000
330,000
0
%
25.5
%
6.8
%
-10.6
%
Tarun Amla
255,000
285,000
11.8
%
1.8
%
-7.5
%
-20.8
%
Robert Haskins
250,000
275,000
10.0
%
16.5
%
-9.2
%
-20.1
%
Mathew LaRont
240,000
265,000
10.4
%
18.3
%
-10.5
%
-20.4
%
(1)
Market data from 2009 used to benchmark our named executive officers' 2010 base salaries was weighted evenly among companies in our selected peer group and companies in proprietary
compensation surveys, with 50% of the market data deriving from our peer group and 50% from proprietary compensation surveys. For more information on our selected peer group and the proprietary
compensation surveys used to benchmark our named executive officers, see "—Compensation Discussion and Analysis—How have compensation decisions historically been made?".
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Neither Mr. Sharpe nor Mr. Bitter received an increase in base salary in fiscal 2010, although each of their target awards under our Bonus Plan
was increased. Our board of directors believed that Mr. Sharpe and Mr. Bitter should have more compensation "at risk" during what was expected to be a turnaround year.
The
salary increases for Messrs. Amla, Haskins and LaRont were made in order to move their compensation closer to the market median, and, in the case of Mr. LaRont, to reflect his
assumption of additional responsibilities for the supply chain function.
How was annual bonus compensation determined?
Our board of directors established a Bonus Plan for fiscal 2010, in which our named executive officers and other executives participated. The award
opportunities for each participant are expressed as a percentage of base salary. We chose Consolidated Adjusted EBITDA (as defined under our senior secured credit agreement) as the sole criterion to
determine awards because of its emphasis on operational earnings and its ability to serve as a proxy for "cash flow". Achieving a certain level of Consolidated Adjusted EBITDA is also an element of a
key covenant of our principal credit agreements, so its use as the criterion for the 2010 Bonus Plan aligns the interest of our executives with the corporate objective of ensuring compliance with
these agreements.
Consolidated
Adjusted EBITDA (as defined under our senior secured credit agreement) is different than Adjusted EBITDA used elsewhere in this prospectus. Under our senior secured credit agreement, it
includes additional add-backs to net income for certain pension costs and other taxes.
The
2010 Bonus Plan had three target levels of Consolidated Adjusted EBITDA for determining bonus awards:
–>
a
"threshold" level of Consolidated Adjusted EBITDA of $40.0 million for fiscal 2010, below which no bonus could be earned;
–>
a
"target" level of Consolidated Adjusted EBITDA of $53.0 million for fiscal 2010, above which a bonus could be earned; and
–>
a
"maximum" level of Consolidated Adjusted EBITDA of $65.0 million for fiscal 2010, beyond which no additional bonus could be earned.
Each
target level of Consolidated Adjusted EBITDA for fiscal 2010 was tied to our fiscal 2010 financial plan. Awards for attainment of Consolidated Adjusted EBITDA between the threshold and the target
would have been determined by straight line interpolation, as was attainment of Consolidated Adjusted EBITDA between target and maximum.
Actual
Consolidated Adjusted EBITDA for fiscal 2010 was $89.7 million and well in excess of the $65.0 million maximum credited level of Consolidated Adjusted EBITDA achievement, so our
named executive officers received the maximum bonuses achievable under the 2010 Bonus Plan in fiscal 2010. The chart below shows the bonus opportunity (expressed both as a dollar amount and as a
percentage of base salary) at each level and the actual bonus amount and percentage of base salary that were paid to each named executive. For example, Mr. Sharpe received a bonus of $983,455,
equal to 180% of his base salary. Had we only achieved the target level of Consolidated Adjusted EBITDA, his bonus would have been
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$491,728
(equal to 90% of his base salary). Had we only achieved the threshold level of Consolidated Adjusted EBITDA, Mr. Sharpe's bonus would have been $368,796 (equal to 67.5% of his base
salary).
Named executive officer
Threshold
Target
Maximum
Actual
Raymond Sharpe
$
368,796
(67.5
)%
$
491,728
(90
)%
$
983,455
(180
)%
$
983,455
(180
)%
F. Gordon Bitter
160,875
(48.75
)%
214,500
(65
)%
429,000
(130
)%
429,000
(130
)%
Tarun Amla
106,875
(37.5
)%
142,500
(50
)%
285,000
(100
)%
285,000
(100
)%
Robert Haskins
103,125
(37.5
)%
137,500
(50
)%
275,000
(100
)%
275,000
(100
)%
Mathew LaRont
99,375
(37.5
)%
132,500
(50
)%
265,000
(100
)%
265,000
(100
)%
Our named executive officers have a large percentage of their overall compensation at risk given they are instrumental to our overall success and have the
greatest ability to impact our financial and operational results. This compensation allocation is consistent with executives at our peer group companies and the market surveys provided by Mercer.
We
do not have a policy to recover or "claw back" incentive compensation in an amount that exceeds the amount that would have been earned based on our actual financial performance determined after an
accounting restatement due to material non-compliance with any financial reporting requirements of the securities laws. While we understand that legislative mandates will require such a
policy in the future, we are waiting to see the final rules to be issued by the SEC before adopting a policy.
What types of long-term incentive compensation did the named executive officers receive?
Historically, option grants have been made to executives and other management employees around the dates of their hire. We have also made grants of
restricted units, profits interest units and options at other times as warranted by business conditions but have not done so on a consistent basis. Equity awards have been designed to align the
incentives of our executives with the interests of our Sponsors and with our long-term success. Additionally, we believe that equity awards have enabled us to attract, motivate and retain
executive talent.
As
previously discussed, in the fourth quarter of 2010, we cancelled substantially all grants of options under the 2004 Option Plan for participants, including our named executive officers. Our board
of directors subsequently approved new equity-based compensation for a small group of our most senior executives, including our named executive officers, comprised of both options and restricted
units, to strike a balance between equity grants that resulted in unit price appreciation (options) and grants that resulted in retention value (restricted units). Newly hired executives have received
grants similar to those of the incumbent executives who agreed to the cancellation of earlier grants.
The
new option grants were made under the 2010 Option Plan and provide plan participants with non-qualified options to acquire partnership units. The option exercise price of the grants
was $0.49 per partnership unit, which was slightly higher than the estimated value of the partnership units on the date of grant of $0.41 per partnership unit. The options have a 10-year
term and are subject to a three-year ratable vesting schedule on the anniversary dates of the original grant.
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The
new restricted unit grants were made under the 2010 Restricted Unit Plan. The estimated fair market value of the restricted units on the date of grant was $0.63 per partnership unit. The
restricted units vest pursuant to a three-year ratable vesting schedule on the anniversary dates of the original grant, provided that there has been either (i) a change in control
or (ii) an initial public offering of equity securities of the Company and that the participant may sell such securities in a public market free of any "market stand-off" or
"lock-up" restrictions.
The
number of partnership units subject to each award was determined by our board of directors taking into account market surveys of equity grants conducted by Mercer, internal equity, and the size of
the available equity pool. The equity grants for the named executive officers that were made in 2010 and the 2x and 3x profits interests that were granted to Mr. Sharpe and Mr. Amla in
2004 are reflected in the table below:
Name
Options
(#)
Restricted units
(#)
2X Profits interest
units
3X Profits interest
units
Raymond Sharpe
5,767,100
1,094,300
210,000
210,000
F. Gordon Bitter
1,537,900
465,100
—
—
Tarun Amla
1,252,500
458,400
10,000
10,000
Robert Haskins
1,200,000
400,000
—
—
Mathew LaRont
1,200,000
400,000
—
—
Do the named executive officers receive perquisites?
To facilitate the attraction and retention of highly qualified executives, we provide our named executive officers with other specified benefits that
we believe are limited and consistent with current market practices. We do not provide any tax gross-ups to our named executive officers. In 2010, all of our named executive officers were
eligible for an executive physical and Mr. Sharpe and Mr. Haskins received supplemental life insurance.
Under
the terms of Mr. Sharpe's employment agreement, he receives an annual stipend of $35,000, which is paid in monthly installments, for a country club membership and a company car allowance.
In
2010, Mr. Amla received an annual stipend of $12,000 for a company car allowance.
Mr. Haskins,
as an expatriate executive, received payments to cover housing, airfare for home leave for him and his family, automobile and other expenses, as well as tax equalization. We
believe that these benefits are appropriate and in line with other similarly situated expatriate executives.
Do any of the components of our named executive officers' compensation provide benefits upon a termination of employment or a change in control?
Our named executive officers have agreements that provide for severance benefits for specific involuntary terminations of employment, including
termination "without cause" or in the event of a change of control. The terms and estimated amounts of these benefits are described below under "Potential Payments upon Involuntary Termination without
Cause before a Change in Control" and "Potential Payments upon Involuntary Termination without Cause or by Executive for Good Reason after a Change in Control". Under the terms of the 2010 Option Plan
and the 2010 Restricted Unit Plan, our board of directors may accelerate the vesting of all unvested awards in the event of a change of control, in its sole discretion. For a discussion of the terms
of our 2011 Equity Incentive Plan see "Executive Compensation—Equity Incentive Plans". We believe these provisions are reasonable because the possibility of a change in control could cause
uncertainty among our named executive officers and concern over potential loss of equity awards and therefore could result in their departure or distraction to the detriment of our Company and our
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shareholders.
We believe the combination of severance and change in control arrangements will help our executive officers maintain continued focus and dedication to their responsibilities to help
maximize shareholder value.
Do we consider the tax impact of the compensation that we provided?
Section 162(m) of the Internal Revenue Code limits the tax deductibility by a public company of compensation in excess of $1 million
paid to certain of its most highly compensated executive officers. However, performance-based compensation that has been approved by shareholders is excluded from the $1 million limit if, among
other requirements, the compensation is payable only upon attainment of pre-established, objective performance goals.
The
limitations of Section 162(m) have not been applicable to us prior to this offering. Following this offering, our compensation committee will consider the tax impact of all compensation
arrangements in light of our overall compensation philosophy and objectives. However, there may be circumstances in which our and our shareholders' interests are best served by providing compensation
that is not fully deductible and our ability to exercise discretion outweighs the advantages of qualifying compensation under Section 162(m).
ACTIONS TAKEN IN FISCAL 2011
As a part of its annual review of executive compensation, our board of directors made the following adjustments to the base salaries of our named
executive officers for fiscal 2011, all of which were effective as of January 2011.
Percentage deviation
from 2010 market data
(1)
Named executive officer
2011 Base
salary
Percentage
increase
25th
Percentile
Median
75th
Percentile
Raymond Sharpe
$
600,000
9.8
%
9.3
%
-4.5
%
-15.5
%
F. Gordon Bitter
340,000
3.0
%
20.1
%
1.2
%
-14.6
%
Tarun Amla
315,000
10.5
%
7.9
%
-6.8
%
-24.6
%
Robert Haskins
285,000
3.6
%
16.3
%
-1.7
%
-22.3
%
Mathew LaRont
275,000
3.8
%
16.5
%
-3.2
%
-20.5
%
(1)
Market data from 2010 used to benchmark our named executive officers' 2011 base salaries was weighted evenly among companies in our selected peer group and companies in proprietary
compensation surveys, with 50% of the market data deriving from our peer group and 50% from proprietary compensation surveys. For more information on our selected peer group and the proprietary
compensation surveys used to benchmark our named executive officers, see "—Compensation Discussion and Analysis—How have compensation decisions historically been made?".
Mr. Sharpe had not received a salary increase in two years, and his salary was well below the median for chief executive officers of comparable
experience and tenure. Accordingly, his salary was increased from $546,364 to $600,000, an increase of 9.8%. Mr. Sharpe's salary remains below the market median.
Mr. Amla's
salary was increased from $285,000 to $315,000, an increase of 10.5%. Mr. Amla's increase reflected an adjustment to move his salary closer to the market median and to
compensate him for the elimination of a car allowance. Mr. Amla's salary remains below the market median.
Messrs. Bitter,
Haskins and LaRont received salary increases of 3% to 4%, to provide cost of living adjustments comparable to those extended to non-executive employees in the United
States.
Mr. Haskins
resigned as an officer of Isola, effective May 16, 2011.
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We also adopted a Bonus Plan for 2011 that is similar in structure to the 2010 Bonus Plan. It is based on Consolidated Adjusted EBITDA (as defined under our senior secured
credit agreement) and is tied to our current operating plan. The threshold level of Consolidated Adjusted EBITDA achievement for 2011 exceeds the 2010 maximum credited level of Consolidated Adjusted
EBITDA achievement, reflecting the compensation committee's desire to continue to make the plan goals challenging to achieve:
Performance level
Threshold
Target
Maximum
Payout Trigger
75% of plan
100% of plan
115% of plan
Payout (as % of target)
75%
100%
200%
In connection with this offering, we anticipate implementing an omnibus incentive compensation plan that would enable us to grant a range equity-based incentive
awards, including stock options, restricted stock, restricted stock units and stock appreciation rights, the vesting criteria of which may be performance- or time-based. See "Executive
Compensation—Equity Incentive Plans".
COMPENSATION RISK ASSESSMENT
Our new board of directors reviewed our compensation policies and practices for all employees and determined that our compensation policies and
programs are not structured to be reasonably likely to have a material adverse effect on Isola. Our new board of directors believes that the mix and design of the elements of executive compensation do
not encourage management to assume excessive risks, based on the following:
–>
our
allocation of compensation between cash compensation and long-term equity compensation, combined with our typical three year vesting schedule (with
vesting at a rate of 33
1
/
3
% for each year of continued employment following the grant date), discourages short-term risk taking;
–>
our
approach of goal setting, setting of targets with payouts at multiple levels of performance, capping the amount of our incentive payouts, and evaluation of
performance results assist in mitigating excessive risk-taking;
–>
our
compensation decisions include subjective considerations, which restrain the influence of formulae or objective factors on excessive risk taking; and
–>
our
business does not face the same level of risks associated with compensation for employees at financial services (traders and instruments with a high degree of
risk).
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SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to our named executive officers for fiscal 2010:
Name and principal position
Year
(1)
Salary
($)
Bonus
(2)
($)
Stock
awards
(3)(5)
($)
Option
awards
(4)(5)
($)
All other
compensation
($)
Change in
pension
value and
non-qualified
deferred
compensation
earnings
($)
Total
($)
Raymond Sharpe
President and Chief Executive Officer
2010
$
556,871
$
983,455
$
689,409
$
2,028,431
$
45,882
(6)
$
—
$
4,304,048
F. Gordon Bitter
Executive Vice President and Chief Financial Officer
2010
336,346
429,000
293,013
510,539
—
—
1,568,898
Tarun Amla
Executive Vice President and Chief Technology Officer
2010
292,673
385,000
(7)
288,792
445,725
17,493
(8)
15,000
(9)
1,444,683
Robert Haskins
Former President, Asia
(10)
2010
287,319
275,000
252,000
398,100
305,204
(11)
—
1,517,623
Mathew LaRont
President, Asia and Global Supply Chain Officer, former President, North America
(12)
2010
269,115
265,000
252,000
434,900
5,504
(13)
—
1,226,519
(1)
The base salary amounts, Mr. Sharpe's stipend and Mr. Amla's car allowance reflect the fact that fiscal 2010 had 53 weeks.
(2)
Except as otherwise described in the footnote below, represents cash bonuses paid under our 2010 Bonus Plan, our annual cash incentive plan that rewarded our named
executive officers
for meeting or exceeding Consolidated Adjusted EBITDA targets tied to our 2010 financial plan.
(3)
Represents restricted limited partner common units in the Sponsor Limited Partnership.
(4)
Represents options to purchase limited partner common units in the Sponsor Limited Partnership.
(5)
The amounts shown reflect the incremental fair value of each new award granted to our named executive officers in the fourth quarter of 2010 under the 2010 Option
Plan in exchange for
the cancellation of each existing award held by our named executive officers in the fourth quarter of 2010 granted under the 2004 Option Plan, computed in accordance with the provisions of FASB ASC
Topic 718. Assumptions used in the calculation of these amounts are included in Note 9 to our consolidated financial statements included in this prospectus. As required by SEC rules, the
amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.
(6)
Represents the aggregate value during 2010 of all perquisites provided to Mr. Sharpe. Under the terms of Mr. Sharpe's employment agreement, he receives an
annual stipend
of $35,673, which is paid in monthly installments, for a country club membership and a car allowance. Also includes life insurance premiums for Mr. Sharpe in the amount of $7,057 and matching
contributions made by the Company to his 401(k) account in the amount of $3,152.
(7)
Represents (a) a bonus of $285,000 under our 2010 Bonus Plan; and (b) a one-time bonus of $100,000 paid to Mr. Amla in connection with expenses he
incurred as a result of his relocation from Singapore to the United States.
(8)
Represents the aggregate value during 2010 of all perquisites provided to Mr. Amla which includes $12,231 for a car allowance and matching contributions made by
the Company to
his 401(k) account in the amount of $5,262.
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(9)
Represents an increase of: (i) $4,000 in Mr. Amla's qualified pension value; and (ii) $11,000 in Mr. Amla's supplemental executive retirement plan.
(10)
Mr. Haskins resigned from the Company, effective May 16, 2011.
(11)
Represents the aggregate value during 2010 of all perquisites provided to Mr. Haskins, including: (i) $17,813 for a club membership; (ii) $180,325
for rent,
utilities and other housing related expenses; (iii) overseas allowance of $70,152; (iv) $6,606 for tax preparation services; (v) $2,922 for life insurance premiums; and
(vi) $27,386 in contributions to the Mandatory Provident Fund in Hong Kong.
(12)
Mr. LaRont served as President, North America and Global Supply Chain Officer during 2010. He currently serves as President, Asia and Global Supply Chain
Officer.
(13)
Represents the aggregate value during 2010 of all perquisites provided to Mr. LaRont which includes matching contributions made by the Company to his 401(k)
account in the
amount of $5,504.
FISCAL 2010 GRANTS OF PLAN-BASED AWARDS
The following table provides information regarding all grants of plan-based awards that were made to or earned by our named executive
officers during fiscal 2010 as well as information regarding certain options granted in prior years under the 2004 Option Plan that were cancelled and exchanged for new options granted under the 2010
Option Plan. Disclosure on a separate line item is provided for each grant of an award made to and each repriced option held by a named executive officer. The information in this table supplements the
dollar value of options and other awards set forth in the "Summary Compensation Table" by providing additional details about the awards.
Name
Grant date
(1)
Number of
stock awards
(2)
(#)
Number of securities
underlying options
(3)
(#)
Exercise of base price
of option awards
($/unit)
(4)
Grant date fair value
of stock and option
awards
Raymond Sharpe
10/8/2010
1,094,300
$
689,409
10/8/2010
5,767,100
$
0.49
2,028,431
F. Gordon Bitter
10/8/2010
465,100
293,013
10/8/2010
1,537,900
0.49
510,539
Tarun Amla
10/8/2010
458,400
288,792
10/8/2010
1,252,500
0.49
445,725
Robert Haskins
(5)
10/8/2010
400,000
252,000
10/8/2010
1,200,000
0.49
398,100
Mathew LaRont
10/8/2010
400,000
252,000
10/8/2010
1,200,000
0.49
434,900
(1)
The general partner of the Sponsor Limited Partnership approved the grants of the option and restricted unit awards on September 30, 2010. The actual grants were made as of the
dates set forth in the table.
(2)
Represents restricted limited partner common units in the Sponsor Limited Partnership.
(3)
Represents options to purchase limited partner common units in the Sponsor Limited Partnership.
(4)
Represents the exercise price following repricing of the options that occurred on October 8, 2010.
(5)
Mr. Haskins resigned from the Company, effective May 16, 2011.
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OUTSTANDING EQUITY AWARDS AS OF THE END OF FISCAL 2010
The following table provides information concerning unexercised option awards and stock awards that have not vested for each of our named executive
officers as of January 1, 2011:
Option awards
(1)
Number of
securities
underlying
unexercised
options (#)
exercisable
Stock awards
(2)
Name
Unexercisable (#)
Option exercise
price ($)
Option expiration
date
Number of
stock awards
held that have
not vested (#)
Market value of
stock awards
held that have
not yet vested ($)
(3)
Raymond Sharpe
—
5,767,100
$
0.49
10/8/2020
1,094,300
$
842,611
F. Gordon Bitter
—
1,537,900
0.49
10/8/2020
465,100
358,127
Tarun Amla
—
1,252,500
0.49
10/8/2020
458,400
352,968
Robert Haskins
(4)
—
1,200,000
0.49
10/8/2020
400,000
308,000
Mathew LaRont
—
1,200,000
0.49
10/8/2020
400,000
308,000
(1)
Represents options to purchase limited partner common units in the Sponsor Limited Partnership. Each of the option grants shown in the table vests over a period of three years in
equal installments on the anniversary date of the grant (i.e., the first third of the grant vests on October 8, 2011, the second third of the grant vests on October 8, 2012 and
the remaining third of the grant vests on October 8, 2013).
(2)
Represents restricted limited partner common units in the Sponsor Limited Partnership. Each of the restricted unit grants shown in the table vests over a period of
three years in
equal installments on the anniversary date of the grant (i.e., the first third of the grant vests on October 8, 2011, the second third of the grant vests on October 8, 2012 and
the remaining third of the grant vests on October 8, 2013), provided that there has been either (i) a change in control or (ii) an initial public offering of equity securities of
the Company and that the participant may sell such securities in a public market free of any "market stand-off" or "lock-up" restrictions.
(3)
Represents the estimated market value of the restricted limited partner common units in the Sponsor Limited Partnership as of January 1, 2011.
(4)
Mr. Haskins resigned from the Company, effective May 16, 2011.
OPTION EXERCISES AND STOCK VESTED
None of our named executive officers had any vested equity grants in fiscal 2010 and as a result, there were no exercises of grants.
PENSION BENEFITS
Name
Plan name
(1)
Number of years of
credited service
Present value of
accumulated benefit
($)
Payments during
last fiscal year
($)
Raymond Sharpe
—
—
—
—
F. Gordon Bitter
—
—
—
—
Tarun Amla
(2)
Retirement Plan
(3)
4
(5)
$
29,609
0
SERP
(4)
5.1
(6)
141,000
0
Robert Haskins
—
—
—
—
Mathew LaRont
—
—
—
—
(1)
Pension benefits are provided to the named executive officer under the Isola USA Corp. Retirement Plan ("Retirement Plan") and the Supplement Executive Retirement Plan ("SERP").
(2)
Mr. Amla is the only named executive officer who participated in the Retirement Plan or the SERP.
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(3)
The Retirement Plan was frozen on December 31, 2003.
(4)
The SERP was frozen on January 31, 2009.
(5)
Mr. Alma's credited service in the Retirement Plan began on January 4, 2000 (when he became a U.S.-based employee of the Company) and terminated on
December 31,
2003 when the Retirement Plan was frozen.
(6)
Mr. Alma's credited service in the SERP began on January 1, 2004 (when the SERP was established) and terminated on January 31, 2009 when the SERP was
frozen.
The benefit formulas and assumptions used to calculate these estimates are as follows:
The
Retirement Plan is a defined benefit plan that was frozen on December 31, 2003. The benefit formula for the annual annuity payable at age 65 is 1.3% of final average earnings (based on the
highest 60 consecutive months of the last 120 months prior to the freeze date of W-2 earnings, not greater than the Internal Revenue Code limit for each year) times years of
service. The actuarial assumptions used to determine the present value are the funding assumptions used under the Pension Protection Act funding rules as of January 1, 2011 (for the value as of
December 31, 2010) and as of January 1, 2010 (for the value as of December 31, 2009). Specifically, the interest rates are funding segment rates of 3.78% for the first five years,
6.31% for the next 15 years, and 6.57% for the years beyond 20 years and the IRS 2011 Static Mortality Table, and 5.03% for the first 5 years, 6.73% for the next 15 years,
and 6.82% for the years beyond 20 years and the IRS 2010 Static Mortality Table, respectively.
The
SERP is a defined benefit plan that was frozen January 31, 2009. The benefit formula is the same as the Retirement Plan, without the Retirement Plan compensation and benefit limitations.
Service is credited from January 1, 2004 through the date of the freeze, January 31, 2009. The actuarial assumptions used to determine the present value are the assumptions specified in
the SERP, the 30-year Treasury rate as of November of the prior year and GAR 1994 Mortality. The interest rates used are 4.19% as of December 31, 2010 and 4.31% as of
December 31, 2009.
Mr. Alma
participated in the Retirement Plan from January 4, 2000, the date on which he became a U.S.-based employee of the Company, to December 31, 2003 when the Retirement Plan
was frozen. The Retirement Plan is a qualified retirement plan in which all Company employees were eligible to participate. In January 2004, the Company established the SERP to replace the benefits
provided under the Retirement Plan, which had been frozen, and to supplement the benefits provided under the Company's 401(k) plan. Participation in the SERP was limited to management or highly
compensated employees who were relocated in connection with the Company moving its headquarters from LaCrosse, Wisconsin to Chandler, Arizona in 2004.
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
Raymond Sharpe.
We entered into an employment agreement with Raymond Sharpe, our President and Chief Executive Officer, on June 2, 2004, which was amended
and restated as of August 11, 2008. If we terminate Mr. Sharpe's employment without cause, he is entitled to receive his base salary at the monthly rate in effect as of the date of
termination for a period of eighteen months. If we terminate Mr. Sharpe's employment without cause or he resigns for good reason within two years following a change in control, then
Mr. Sharpe is entitled to a lump sum payment equal to 1.5 times his annual base salary at the date of termination plus his target bonus. In addition, for the eighteen month period following the
date of termination, he is entitled to continued medical benefits that he was receiving at the date of termination. We pay Mr. Sharpe an annual stipend of $35,000 for a country club membership
and a car allowance. Mr. Sharpe's employment agreement also includes non-competition and non-solicitation covenants by Mr. Sharpe for a one-year
period following termination of his employment with us for any reason.
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F. Gordon Bitter.
We entered into an employment agreement with Gordon Bitter, our Executive Vice President and Chief Financial Officer, on June 30, 2009. If
we terminate Mr. Bitter's employment without cause or he resigns for good reason following a change in control, Mr. Bitter is entitled receive his current monthly base salary for a
period of 12 months in accordance with our normal payroll practices. During the period in which he is receiving severance benefits from us, Mr. Bitter is eligible to continue to
participate in the health and benefit coverage that is available to our employees. Mr. Bitter's employment agreement also includes non-competition and non-solicitation
covenants by Mr. Bitter for a one-year period following termination of his employment with us for any reason.
Tarun Amla.
We entered into a restated employment agreement with Tarun Amla, our Executive Vice President and Chief Technology Officer, on October 1, 2004.
If we terminate Mr. Amla's employment at
any time for any reason, he is entitled receive his current monthly base salary for a period of 12 months in accordance with our normal payroll practices. Mr. Amla's employment agreement also
includes non-competition and non-solicitation covenants by Mr. Amla for a one-year period following termination of his employment with us for any reason.
Robert Haskins.
We entered into an employment agreement with Robert Haskins, our former President, Asia, on November 17, 2004 and amended the agreement as
of March 10, 2005, March 28, 2006 and May 27, 2008. On March 1, 2011, Mr. Haskins voluntarily resigned from his position with Isola, effective May 16, 2011.
Under the terms of his employment agreement, Mr. Haskins received his current base salary paid in accordance with our usual payroll procedures up until the effective date of his resignation,
and participated in the health and benefit coverage that are available to our employees. Mr. Haskins did not receive any other severance benefits from us in connection with his resignation.
Mathew LaRont.
We entered into an employment agreement with Mathew LaRont, our President, Asia and Global Supply Chain Officer on April 30, 2007. If we
terminate Mr. LaRont's employment without cause, Mr. LaRont is entitled receive his current monthly base salary for a period of 12 months in accordance with our normal payroll
procedures. During the period in which he is receiving severance benefits from us, Mr. LaRont is eligible to continue to participate in the health and benefit coverage that is available to our
employees. Mr. LaRont's employment agreement also includes non-competition and non-solicitation covenants by Mr. LaRont for a one-year period
following termination of his employment with us for any reason.
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION WITHOUT CAUSE BEFORE A CHANGE IN CONTROL
The table below quantifies the potential payouts to each of the named executive officers upon involuntary termination without cause before a change
in control. The potential payouts assume (a) the employment
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agreements
were effective as of the last business day of our fiscal 2010 year and (b) no change in control occurred on or before such date.
Name
Cash payment
Continuation of health & welfare benefits
Raymond Sharpe
$
819,546
$
15,101
(1)
F. Gordon Bitter
330,000
10,108
(2)
Tarun Amla
285,000
13,963
(2)
Robert Haskins
275,000
13,963
(2)
Mathew LaRont
265,000
13,963
(2)
(1)
Represents cost to provide continuation of health and dental benefits to Mr. Sharpe for a period of 18 months pursuant to the terms of his employment agreement.
(2)
Represents cost to provide continuation of health and dental benefits to the named executive officer for a period of 12 months pursuant to the terms of his
employment
agreement.
POTENTIAL PAYMENTS UPON INVOLUNTARY TERMINATION WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON AFTER A CHANGE IN CONTROL
The table below quantifies the potential payouts to each of the named executive officers upon termination for good reason after a change in control.
The potential payouts assume that (a) the employment agreements were effective as of the last business day of our fiscal 2010 year and (b) a change in control occurred on or before such
date.
Name
Cash payment
Restricted unit vesting
(1)
Option vesting
(2)
Continuation
of health &
welfare
benefits
Raymond Sharpe
$
1,311,274
$
842,611
$
1,614,788
$
15,101
(3)
F. Gordon Bitter
330,000
358,127
430,612
10,108
(4)
Tarun Amla
285,000
352,968
350,700
13,963
(4)
Robert Haskins
275,000
308,000
336,000
13,963
(4)
Mathew LaRont
265,000
308,000
336,000
13,963
(4)
(1)
The amounts shown for each named executive officer are calculated by multiplying the number of unvested restricted unit awards for such named executive officer with respect to which
the vesting would accelerate as a result of termination under the circumstances noted by the price of a partnership unit on the last business day of our fiscal 2010 year, which was $0.77. Unvested
restricted unit awards are set forth in the Outstanding Equity Awards at Fiscal Year-End table.
(2)
The amounts shown for each named executive officer are calculated by multiplying the number of in-the-money options with respect to which the vesting would
accelerate as a result of termination under the circumstances noted by the difference between the exercise price and the price of a partnership unit on the last business day of our fiscal 2010 year,
which was $0.77. The number of shares subject to unvested stock options and exercise prices thereof are shown above in the Outstanding Equity Awards at Fiscal Year-End table.
(3)
Represents cost to provide continuation of health and dental benefits to Mr. Sharpe for a period of 18 months pursuant to the terms of his employment
agreement.
(4)
Represents cost to provide continuation of health and dental benefits to the named executive officer for a period of 12 months pursuant to the terms of his
employment
agreement.
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EQUITY INCENTIVE PLANS
Our 2011 Equity Incentive Plan, or the 2011 Plan, was approved by the board of directors and pre-initial public offering shareholders of
Isola Group Ltd., in                    2011. It is intended to make available incentives that will assist us to attract, retain and motivate
employees, including officers, consultants and
directors. We may provide these incentives through the grant of share options, share appreciation rights, restricted shares, restricted share units, performance shares and units, and other
cash-based or share-based awards.
A
total of             ordinary shares will be initially authorized and reserved for issuance under the 2011 Plan. This reserve will automatically increase on January 1, 2012 and
each
subsequent anniversary through 2021, by an amount equal to the smaller of (a) 3.0% of the number of ordinary shares issued and outstanding on the immediately preceding December 31, or
(b) a lesser amount determined by the board.
Appropriate
adjustments will be made in the number of authorized shares and other numerical limits in the 2011 Plan and in outstanding awards to prevent dilution or enlargement of participants' rights
in the event of a share split or other change in our capital structure. Shares subject to awards which expire or are cancelled or forfeited will again become available for issuance under the 2011
Plan. The shares available will not be reduced by awards settled in cash or by shares withheld to satisfy tax withholding obligations. Only the net number of shares issued upon the exercise of share
appreciation rights or options exercised by means of a net exercise or by tender of previously owned shares will be deducted from the shares available under the 2011 Plan.
The
2011 Plan is generally administered by the compensation committee of our board of directors. Subject to the provisions of the 2011 Plan, the committee determines in its discretion the persons to
whom and the times at which awards are granted, the sizes of such awards, and all of their terms and conditions. The compensation committee has the authority to construe and interpret the terms of the
2011 Plan and awards granted under it. The 2011 Plan provides, subject to certain limitations, for indemnification by the Company of any director, officer or employee against all reasonable expenses,
including attorneys' fees, incurred in connection with any legal action arising from such person's action or failure to act in administering the 2011 Plan.
The
2011 Plan authorizes the compensation committee, without further shareholder approval, to provide for the cancellation of underwater share options or share appreciation rights in exchange for new
at-the-money options or other equity awards or a cash payment.
Awards
may be granted under the 2011 Plan to our employees, including officers, directors, or consultants or those of any present or future parent or subsidiary corporation or other affiliated entity.
All awards are evidenced by a written agreement between us and the holder of the award and may include any of the following:
–>
Share Options.
We may grant nonstatutory share options or incentive share options (as described in Section 422
of the United Stated Internal Revenue Code), each of which gives its holder the right, during a specified term (not exceeding 10 years) and subject to any specified vesting or other conditions,
to purchase a number of ordinary shares at an exercise price per share determined by the administrator, which may not be less than the fair market value of an ordinary share on the date of grant.
–>
Share Appreciation Rights.
A share appreciation right gives its holder the right, during a specified term (not
exceeding 10 years) and subject to any specified vesting or other conditions, to receive the appreciation in the fair market value of our ordinary shares between the date of grant of the award
and the date of its exercise. We may pay the appreciation in ordinary shares or in cash.
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–>
Restricted Shares.
The administrator may grant restricted share awards either as a bonus or as a purchase right at
such price as the administrator determines. Restricted shares remain subject to forfeiture until vested, based on such terms and conditions as the administrator specifies. Holders of restricted shares
will have the right to vote the shares and to receive any dividends paid, except that the dividends may be subject to the same vesting conditions as the related shares.
–>
Restricted Share Units.
Restricted share units represent rights to receive ordinary shares (or their value in cash)
at a future date without payment of a purchase price, subject to vesting or other conditions specified by the administrator. Holders of restricted share units have no voting rights or rights to
receive cash dividends unless and until ordinary shares are issued in settlement of such awards. However, the administrator may grant restricted share units that entitle their holders to dividend
equivalent rights.
–>
Performance Shares and Performance Units.
Performance shares and performance units are awards that will result in a
payment
to their holder only if specified performance goals are achieved during a specified performance period. Performance share awards are rights
denominated in ordinary shares, while performance unit awards are rights denominated in currency. The administrator establishes the applicable performance goals based on one or more measures of
business performance enumerated in the 2011 Plan, such as revenue, gross margin, net income or total shareholder return. To the extent earned, performance share and unit awards may be settled in cash
or in ordinary shares. Holders of performance shares or performance units have no voting rights or rights to receive cash dividends unless and until ordinary shares are issued in settlement of such
awards.
–>
Cash-based Awards and Other Share-based Awards.
The administrator may grant cash-based awards
that specify a monetary payment or range of payments or other share-based awards that specify a number or range of shares or units that, in either case, are subject to vesting or other conditions
specified by the administrator.
Settlement
of these awards may be in cash or ordinary shares, as determined by the administrator. Their holder will have
no voting rights or right to receive cash dividends unless and until our ordinary shares are issued pursuant to the award. The administrator may grant dividend equivalent rights with respect to other
share-based awards.
In
the event of a change in control as described in the 2011 Plan, the acquiring or successor entity may assume or continue all or any awards outstanding under the 2011 Plan or substitute
substantially equivalent awards. Any awards that are not assumed or continued in connection with a change in control or are not exercised or settled prior to the change in control will terminate
effective as of the time of the change in control. The compensation committee may provide for the acceleration of vesting of any or all outstanding awards upon such terms and to such extent as it
determines, except that the vesting of all awards held by members of the board of directors who are not employees will automatically be accelerated in full. The 2011 Plan also authorizes the
compensation committee, in its discretion and without the consent of any participant, to cancel each or any outstanding award denominated in shares upon a change in control in exchange for a payment
to the participant with respect to each share subject to the canceled award of an amount equal to the excess of the consideration to be paid per ordinary share in the change in control transaction
over the exercise price per share, if any, under the award.
The
2011 Plan will continue in effect until its terminated by the administrator, provided, however, that all awards will be granted, if at all, within 10 years of its effective date. The
administrator may amend, suspend or terminate the 2011 Plan at any time, provided that without shareholder approval, the plan cannot be amended to increase the number of shares authorized, change the
class of persons eligible to receive incentive share options or effect any other change that would require shareholder approval under any applicable law or listing rule.
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DIRECTOR COMPENSATION
Historically, other than Jeffrey McCreary, we have not compensated our non-employee directors for their service on our board of
directors. Upon his appointment to our board of directors in 2006, Mr. McCreary received 15,000 fully-vested partnership units. In addition, from January 2006 through September 2010,
Mr. McCreary received an annual cash retainer of $16,000 and received a meeting fee of $4,000 for each board meeting that he attended and, effective October 2010, Mr. McCreary began
receiving an annual cash retainer of $75,000, which is paid in quarterly installments, and stopped receiving a separate meeting fee. In 2011, as part of our efforts to attract and retain additional
highly qualified individuals to our new board of directors, we adopted a director compensation policy that provides for cash and equity compensation to our non-employee directors.
The
purpose of our non-employee director compensation policy is to provide a total compensation package that enables us to attract and retain, on a long-term basis, high
caliber directors who are not employees or officers. Under our policy, our non-employee directors who are not associated with our Sponsors are entitled to cash compensation as set forth
below for 2011:
Board of directors
Annual cash
retainer
Directors
$
75,000
Board committees
Annual cash
retainer
Audit Committee Chairperson
$
15,000
Compensation Committee Chairperson
15,000
Nominating and Corporate Governance Committee Chairperson
5,000
Other Audit, Compensation and Nominating and Corporate Governance Committee Members
0
Meetings
Per meeting
attendance fee
Board Meetings
$
0
Board Committee Meetings
0
In addition, each unaffiliated non-employee director is also entitled to annual compensation of $25,000 in restricted shares, with the first share
grant effective at the close of market on the day this offering is completed. These awards vest in equal installments on the first three anniversaries of the date of grant provided the director
remains on our board of directors at such time, and are subject to the terms and conditions of our 2011 Equity Incentive Plan.
We
also reimburse all non-employee directors for their reasonable out-of-pocket expenses incurred in attending meetings of our board of directors or any committees
thereof.
We
do not pay any compensation for serving on our board of directors to any employee directors or any director that is employed by one of our Sponsors. Accordingly, Mr. Sharpe does not receive
additional compensation for his services as a member of our board of directors.
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The
following table sets forth a summary of the compensation we paid to our non-employee directors in 2010:
Non-employee Director Compensation Table—2010
Name
Fees earned or
paid in cash
(1)
Option
awards
(2)
All other
compensation
Total
Kevin Burns
—
—
—
—
Donald Colvin
—
—
—
—
H. McIntyre Gardner
—
—
—
—
Jordon Kruse
—
—
—
—
Jeffrey McCreary
$
62,750
—
—
$
62,750
Eric Noeth
—
—
—
—
Cassidy Traub
—
—
—
—
(1)
Represents the annual retainer earned by the respective director in 2010.
(2)
Amount reflects the incremental fair value of options repriced in 2010 calculated in accordance with Financial Accounting Standards Board Accounting Standards
Codification Topic
718-Stock Compensation
. For a discussion of the assumptions used in the valuations, see Note 9 to our consolidated financial statements included elsewhere in
this prospectus.
DIRECTOR LIMITATION OF LIABILITY AND INDEMNIFICATION ARRANGEMENTS
Our articles of association provide for, in the absence of knowing or reckless breach of duty or fraud, the indemnification of our directors and
officers against liabilities, actions, proceedings, claims, damages, costs or expenses incurred by reason of any act or failure to act in the discharge of such directors' or officers' duties.
We
have also entered into indemnification agreements with each of our directors. These agreements provide that we will indemnify each of our directors to the fullest extent permitted by the laws of
the Cayman Islands and advance expenses to each indemnitee in connection with any proceeding in which indemnification is available.
We
also maintain general liability insurance to provide insurance coverage to our directors and officers for losses arising out of claims based on acts or omissions in their capacities as directors or
officers, including liabilities under the Securities Act of 1933, as amended (the "Securities Act"). Insofar as indemnification for liabilities arising under the Securities Act may be permitted to
directors, officers, or persons controlling the registrant pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
These
provisions may discourage shareholders from bringing a lawsuit against our directors in the future for any breach of their fiduciary duty. These provisions may also have the effect of reducing
the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder's
investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these
provisions, the indemnification agreements and the insurance are necessary to attract and retain talented and experienced directors and officers.
At
present, there is no pending litigation or proceeding involving any of our directors or officers in which indemnification will be required or permitted. We are not aware of any threatened
litigation or proceeding that might result in a claim for such indemnification.
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Principal Shareholders
Prior to this offering, a substantial amount of the investment in Isola is represented by convertible preferred certificates issued
by Isola's current Luxembourg Holding Company to the Sponsor Limited Partnership, which is controlled by our Sponsors. Immediately prior to this offering, we will reorganize as Isola
Group Ltd., a Cayman Islands company, and all of the outstanding securities of the Luxembourg Holding Company, including the common shares and these convertible preferred certificates will be
effectively converted into ordinary shares of Isola Group Ltd., as described in "Concurrent Transactions—Corporate Reorganization" (the "Corporate Reorganization and Conversion").
The
following table provides information concerning beneficial ownership of our ordinary shares after giving effect to the Corporate Reorganization and Conversion (1) as of immediately prior to
the consummation of this offering, and (2) as adjusted to reflect the sale of ordinary shares in this offering, by:
–>
each
shareholder, or group of affiliated shareholders, that owns more than 5% of the outstanding ordinary shares;
–>
each
of our named executive officers;
–>
each
of our directors; and
–>
all
of our directors and executive officers as a group.
The
following table lists the number of shares and percentage of shares beneficially owned after giving effect to the Corporate Reorganization and Conversion based on (1)              
ordinary shares outstanding immediately prior to the consummation of this offering and (2)              ordinary shares outstanding upon the completion of this offering.
Beneficial
ownership is determined in accordance with the rules of the SEC, and generally includes voting power and/or investment power with respect to the securities held. Ordinary shares subject to
options or other awards that are currently exercisable or exercisable within 60 days
of                           , 2011 are deemed outstanding and beneficially owned by the person holding those
options
or other awards for purposes of computing the number of shares and percentage of shares beneficially owned by that person, but are not deemed outstanding for purposes of computing the percentage
beneficially owned by any other person. Except as indicated in the footnotes to this table, and subject to applicable community property laws, the persons or entities named have sole voting and
investment power with respect to all of our ordinary shares shown as beneficially owned by them.
Ordinary shares beneficially owned
Percent
Name
Number
Before
offering
(1)
After
offering
(1)
(2)
5% Shareholders
TPG Capital Funds
(3)
301 Commerce Street, Suite 3300
Fort Worth, Texas 71602
%
%
OCM PF Laminates, L.P.
(5)
333 S. Grand Ave., 28th Floor
Los Angeles, CA90071
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Principal Shareholders
Ordinary shares beneficially owned
Percent
Name
Number
Before
offering
(1)
After
offering
(1)
(2)
Directors and Named Executive Officers
Raymond Sharpe
(6)
*
*
F. Gordon Bitter
(7)
—
*
*
Tarun Amla
(8)
—
*
*
Mathew LaRont
(9)
—
*
*
Robert Haskins
(10)
—
*
*
Kevin Burns
(4)
Eric Noeth
(4)
Jordon Kruse
(5)
Cass Traub
(5)
—
Jeff McCreary
(11)
—
*
*
Donald Colvin
—
—
—
McIntyre Gardner
—
—
—
All current directors and executive officers as a group (13 persons)
%
%
*
Denotes beneficial ownership of less than 1%.
(1)
Except as otherwise indicated herein, the address for each of the named beneficial owners is c/o Isola Group Ltd. 3100 W. Ray Road, Suite 301,
Chandler,
Arizona 85226.
(2)
Assumes that the underwriters' option to purchase additional shares has not been exercised.
(3)
Includes             ordinary shares of the Company held by TPG Partners IV-AIV, L.P., a
Cayman Islands exempted limited partnership
("Partners IV"), and             ordinary shares of the Company held by T
3
Hattrick II, L.P., a Cayman Islands exempted limited partnership ("Hattrick II"
and, together with Partners IV, the "TPG Funds") (such shares, collectively, the "TPG Shares"). The general partner of Partners IV is TPG GenPar IV-AIV, L.P., a
Cayman Islands exempted limited partnership, whose general partner is TPG GenPar IV-AIV Advisors, Inc., a Cayman Islands exempted company, whose sole shareholder is TPG
Holdings I, L.P., a Delaware limited partnership, whose general partner is TPG Holdings I-A, LLC, a Delaware limited liability company, whose sole member is TPG
Group Holdings (SBS), L.P., a Delaware limited partnership, whose general partner is TPG Group Holdings (SBS) Advisors, Inc. ("Group Advisors"). The general partner of Hattrick II
is T
3
GenPar II-AIV, L.P., a Cayman Islands exempted limited partnership, whose general partner is T
3
Advisors II-AIV Inc., a Cayman Islands exempted company ("Advisors II"). David Bonderman and James G. Coulter are directors, officers and sole shareholders of
Group Advisors and Advisors II. Messrs. Bonderman and Coulter may be deemed to have investment power and beneficial ownership with respect to the TPG Shares. The address of each of
Messrs. Bonderman and Coulter is c/o TPG Capital, L.P., 301 Commerce Street, Suite 3300, Fort Worth, TX 76102.
In connection with the Corporate Restructuring and Conversion described above, immediately prior to the commencement of the offering, (1) TPG Hattrick IV, LLC was liquidated and
the             ordinary shares of the Company that it held were contributed to Partners IV and (2) T
3
Hattrick II, LLC was liquidated and the
             ordinary shares of the Company that it held were contributed to Hattrick II.
(4)
Kevin Burns and Eric Noeth were appointed to the board of directors by TPG Capital, which is an affiliate of each of the TPG Funds. Mr. Burns is a Partner of TPG Capital, and
Mr. Noeth is an Associate at TPG Capital. Neither Mr. Burns nor Mr. Noeth has voting or investment power over, and each disclaims beneficial ownership of, the securities held by
the TPG Funds. The address of each of Messrs. Burns and Noeth is c/o TPG Capital, L.P., 301 Commerce Street, Suite 3300, Fort Worth, TX 76102.
(5)
Includes             ordinary shares held directly by OCM PF Laminates, L.P.,
Howard S. Marks, Bruce A. Karsh, Sheldon M. Stone, Larry W.
Keele, Stephen A. Kaplan, John B. Frank, David M. Kirchheimer and Kevin L. Clayton, whom we refer to collectively as the "Oaktree Management Group" because they are members
of the executive committee of Oaktree Capital Group Holdings GP, LLC. Oaktree Capital Group Holdings GP, LLC is the general partner of Oaktree Capital Group
Holdings, L.P. Oaktree Capital Group Holdings, L.P. is the holder of the majority of the voting units of Oaktree Capital Group, LLC. Oaktree Capital Group, LLC is the
managing member of Oaktree Holdings, LLC. Oaktree Holdings, LLC is the managing member of
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Principal Shareholders
OCM Holdings I, LLC. OCM Holdings I, LLC is the general partner of Oaktree Capital I, L.P. Oaktree Capital I, L.P. is the general partner of
Oaktree Fund GP I, L.P. Oaktree Fund GP I, L.P. is the managing member of Oaktree Fund GP, LLC. Oaktree Fund GP, LLC is the
general partner of OCM PF Laminates, L.P. As such, each such entity and each member of the Oaktree Management Group may be deemed to have voting and dispositive power over the ordinary shares
held by OCM PF Laminates, L.P. Each such entity and each member of the Oaktree Management Group disclaims beneficial ownership of the ordinary shares of the Company except to the extent of any
pecuniary interest therein.
Each entity listed herein whose shares are beneficially owned by the Oaktree Management Group has a principal business address of: c/o Oaktree Capital Management, 333 S. Grand Avenue,
Los Angeles, California 90071.
(6)
Includes             ordinary shares.
(7)
Includes             ordinary shares
and             ordinary shares that may be acquired upon the exercise of options exercisable within 60 days
after                           ,
2011.
(8)
Includes                           ordinary shares
and             ordinary shares that may be acquired upon the exercise of options exercisable within 60 days
after                           ,
2011.
(9)
Includes             ordinary shares
and             ordinary shares that may be acquired upon the exercise of options exercisable within 60 days
after                           ,
2011.
(10)
Includes                           ordinary shares.
(11)
Includes                           ordinary shares.
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Certain Relationships and Related Party Transactions
Since January 1, 2008, there has not been any transaction, nor is there any proposed transaction to which we were or will be a
party in which the amount involved exceeded or will exceed $120,000 and in which any director, executive officer, holder of more than 5% of any class of our voting securities, or any member of the
immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than (i) as set forth below or (ii) the compensation, employment and other
agreements and transactions, which are described in "Management" and "Executive Compensation" elsewhere in this prospectus.
AGREEMENTS WITH OUR SPONSORS
TPG Capital Management Agreement
In January 2005, we entered into a management agreement with TPG Capital, pursuant to which TPG Capital provides financial, advisory and
consulting services to us (the "TPG Capital Management Agreement"). These services include executive and management services; the design of our equity capital structure and assistance with analysis of
our structure for tax purposes; identification, support and analysis of acquisitions and dispositions; support and analysis of
financing alternatives; finance functions, including assistance in the preparation of financial projections, and monitoring of compliance with financing agreements; and various human resource
functions, including the identification and hiring of directors and executive officers. There are no minimum levels of service required to be provided pursuant to the TPG Capital Management Agreement.
The
TPG Capital Management Agreement also includes customary indemnification provisions in favor of TPG Capital, and customary limitations of TPG Capital's liability for services rendered under the
TPG Capital Management Agreement provided TPG Capital is not grossly negligent or engages in willful misconduct.
Pursuant
to the TPG Capital Management Agreement we are required to pay TPG Capital an aggregate annual monitoring fee of $2.0 million, plus reasonable out-of-pocket
expenses of up to $50,000 per year. These fees and expenses are payable on a quarterly basis. We accrued approximately $2.1 million of fees and expenses in each of 2008, 2009, and 2010, all of
which were paid in full by 2011, and accrued approximately $1.0 million of fees and expenses in the six months ended July 2, 2011. Concurrently with the closing of this offering, the TPG
Capital Management Agreement will be terminated, provided that we will remain obligated to pay TPG Capital an $8 million transaction fee plus approximately $1.0 million in accrued
management fees and related expenses through such date.
Insulectro Distributor Agreement and Redfern Partners, LLC Option Agreement
On June 1, 2004, we entered into an exclusive distributor agreement with Insulectro, a privately held company based in California. Insulectro
is owned, controlled and managed by Timothy and Donald Redfern, who are affiliated with Redfern Partners, LLC, one of our Sponsors.
Pursuant
to this distributor agreement, Insulectro serves as our exclusive distributor across the United States and British Columbia, serving PCB fabricators in these regions. Under the distributor
agreement, we reserve the right to provide direct sales coverage to certain customers, and may provide direct sales coverage to other customers serviced by Insulectro, provided that we give
60 days notice to Insulectro and pay a commission to Insulectro to compensate Insulectro for lost sales to such customers. Such commission decreases by 50% after 30 days and ceases
entirely after 60 days. We are required to allocate capacity for Insulectro up to Insulectro's weekly purchase volume for the last three months or based on Insulectro's monthly forecast volume,
whichever is less. Increases over capacity allocation will be jointly agreed upon by
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Certain Relationships and Related Party Transactions
the
parties. We may set and change prices by giving Insulectro 40 days prior notice. In certain situations, such as when new territories arise, we are required to invite all interested
potential distributors to present proposals and evaluate such proposals on criteria that shall be shared with all interested parties prior to review of such proposals. The current term of the
distributor agreement ends in June 2014. Either party may terminate the agreement if the other party is in uncured material breach upon 90 days prior written notice.
Insulectro
was the Company's sixth largest customer for the six months ended July 2, 2011, and the fifth largest customer for fiscal 2010, 2009 and 2008. Receivables from Insulectro totaled
$4.3 million as of July 2, 2011, $4.4 million as of January 1, 2011, $4.1 million as of December 26, 2009, and $5.2 million as of December 27,
2008.
Also
on June 1, 2004, the Sponsor Holding Company granted Redfern Partners, LLC an option to purchase 1,500,000 units of the Sponsor Holding Company at an exercise price equal to the
U.S. dollar equivalent of €2 per unit using the spot price for the euro at the close of business for the Federal Reserve Bank of New York on May 31, 2004 (the "Original
Option"). In connection with the liquidation of the Sponsor Holding Company as part of the corporate reorganization occurring concurrently with this offering, the Original Option will be terminated
and substituted with a fully-vested option to purchase             ordinary shares at an exercise price of
$             per share.
Sponsor Limited Partnership Notes
As of December 29, 2007, we had two notes receivable due from and three notes payable due to the Sponsor Limited Partnership for funds
associated with the purchase of the Company. The notes receivable totaled $7.5 million and the notes payable amounted to $5.4 million as of December 27, 2008. All of the notes
bore interest at a rate of the annual average of the six-month EURIBOR plus 5% (9.7% as of December 27, 2008). On December 27, 2008, we entered into an arrangement to net the
five notes together, which resulted in an amount due from the Sponsor Limited Partner of $2.3 million. The note receivable was due on May 31, 2009 and bore an
interest rate of the annual average of the six-month EURIBOR plus 5%. The note receivable was paid in full to us by the Sponsor Limited Partnership on May 29, 2009.
Loan Agreement and Private Placements of Securities
On September 30, 2010, we entered into a senior secured credit agreement and a mezzanine credit agreement with various lenders, including
certain of the Sponsors, and issued voting and non-voting units of the Sponsor Holding Company to certain of the Sponsors. For a description of the senior secured credit agreement and
mezzanine credit agreement, and equity interests issued to the Sponsors, see "Management's Discussion and Analysis—Liquidity and Capital Resources". In addition, proceeds from this
offering will be used to partially retire amounts outstanding under the senior secured credit agreement and mezzanine credit agreement. For more information, see "Use of Proceeds".
As
of the end of fiscal 2010 and July 2, 2011, we had not made any principal payments under either the senior secured credit agreement or the mezzanine credit agreement. As of the end of fiscal
2010, we had made interest payments totaling $5.4 million under the senior secured credit agreement and $3.5 million under the mezzanine credit agreement. For the six months ended
July 2, 2011, we had made interest payments totaling $10.6 million under the senior secured credit agreement and $7.2 million under the mezzanine credit agreement.
Shareholders and Registration Rights Agreement
We and certain of our Sponsors and shareholders will become parties to a shareholders and registration rights agreement that will become effective
shortly before this offering. The shareholders and registration rights agreement covers matters of corporate governance and registration rights.
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Certain Relationships and Related Party Transactions
Corporate Governance
The shareholders and registration rights agreement provides that so long as they hold at least 20% of our outstanding voting securities, each of TPG
Capital and Oaktree may nominate two members of our board of directors; so long as they hold at least 10% of our outstanding voting securities, each of TPG Capital and Oaktree may nominate one member
of our board of directors; and the parties to the shareholders and registration rights agreement will vote their ordinary shares to elect the persons so nominated to our board of directors.
Messrs. Burns and Noeth were nominated by TPG Capital and Messrs. Kruse and Traub were nominated by Oaktree. The shareholders and registration rights agreement also provides that our
board of directors shall consist of eight members including, in addition to the TPG Capital and Oaktree nominees, our CEO and three nominees who are not affiliated with TPG Capital or Oaktree and who
meet the independence requirements of the Exchange Act and the national securities exchange on which our ordinary shares are listed. The number of independent directors shall be increased accordingly
should there by a reduction in the number of nominees TPG Capital or Oaktree are entitled to pursuant to the shareholders and registration rights agreement.
Registration Rights
Subject to the terms and conditions of the shareholders and registration rights agreement, TPG Capital and Oaktree will have the right to request two
long-form demand registrations, arising after the expiration of a 180-day lock-up period but prior to the time when the Company becomes eligible to use a
registration statement on Form S-3, and two additional demand registrations on Form S-3 once the Company becomes eligible to use a registration statement on
Form S-3. The other shareholders party to the shareholders and registration rights agreement may elect to participate in such registrations.
In
addition to our obligations with respect to demand registrations, if we propose to register any of our securities, other than a registration on Form S-8 or S-4 or
successor forms, for our own account, the parties to the shareholders and registration rights agreement, including TPG Capital and Oaktree, will have the opportunity to participate in such
registrations. Expenses relating to these "incidental registrations" are required to be paid by us.
If
an incidental registration is underwritten and the managing underwriter advises us that the number of securities offered to the public needs to be reduced, priority of inclusion shall be such that
first priority shall be given to us, second priority shall be given to the shareholders party to the shareholders and registration rights agreement who elect to participate in such registration, and
third priority shall be given to all other of our ordinary shares requested to be sold by such shareholders.
Corporate Reorganization
Prior to the completion of this offering, we intend to undertake a corporate restructuring that will create a new holding company in the Cayman
Islands that will wholly own our current Luxembourg Holding Company, and therefore indirectly own the various subsidiaries of the Isola Group. In connection with this corporate restructuring, both the
Sponsor Limited Partnership and the Sponsor Holding Company will be liquidated. This will result in each of the Sponsors separately owning a number of our Cayman ordinary shares equivalent to their
pro rata investments in Isola. Please see "Concurrent Transactions—Corporate Reorganization" for more information on our corporate restructuring.
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Certain Relationships and Related Party Transactions
TRANSACTIONS WITH EXECUTIVE OFFICERS AND DIRECTORS
Equity Interests in the Sponsor Holding Company and Sponsor Limited Partnership
Please see "Executive Compensation—Compensation Discussion and Analysis" and "Prospectus Summary—Concurrent Transactions" for
information on equity interests held by current and former members of management.
Indemnification Arrangements
Please see "Executive Compensation—Director Limitation of Liability and Indemnification Arrangements" for information on our
indemnification arrangements with our directors.
Executive Compensation and Employment Arrangements
Please see "Executive Compensation—Outstanding Equity Awards as of December 31, 2010" and "Executive
Compensation—Employment Agreements and Change in Control Agreements" for information on compensation arrangements with our executive officers, including option grants and agreements with
executive officers.
POLICIES AND PROCEDURES FOR RELATED PARTY TRANSACTIONS
As provided by our Audit Committee charter to be effective upon completion of this offering, our Audit Committee will be responsible for reviewing
and approving related party transactions, after reviewing each such transaction for potential conflicts of interests and other improprieties. We do not currently have a written policy for the review
and approval of transactions with related parties.
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Shares Eligible for Future Sale
Prior to this offering, there has been no public market for our ordinary shares. Based on the number of shares outstanding at
                           , 2011, upon completion of this offering, we will have an aggregate
of                            million ordinary shares outstanding on a fully-diluted basis. All of the shares
that we
sell in this offering will be freely tradable without restriction or further registration under the Securities Act, except that any shares purchased by our affiliates, as that term is defined in
Rule 144, may generally only be sold in compliance with the limitations of Rule 144, which is summarized below. The
remaining                            million of our ordinary shares that
are outstanding after this offering, or         % of our ordinary shares, assuming the underwriters exercise their option to purchase additional shares in full, will be restricted shares under
the terms of the Securities Act. All of these shares are subject to lock-up agreements as described in "Underwriting". Restricted shares may be sold in the public market only if registered
or if they qualify for an exemption from registration under Rule 144 promulgated under the Securities Act, which rules are summarized below.
SALES OF RESTRICTED SECURITIES
In general, under Rule 144 as currently in effect on the date of this prospectus, persons who became the beneficial owner of our ordinary
shares prior to the completion of this offering may not sell their shares until the earlier of (i) the expiration of a six-month holding period, if we have been subject to the
reporting requirements of the Exchange Act and have filed all required reports for at least 90 days prior to the date of the sale; or (ii) a one-year holding period.
If
the six-month holding period applies, then at its expiration, a person who was not one of our affiliates at any time during the three months preceding a sale would be entitled to sell
an
unlimited number of our ordinary shares provided current public information about us is available, and a person who was one of our affiliates at any time during the three months preceding a sale would
be entitled to sell within any three-month period only a number of ordinary shares that does not exceed the greater of either of the following:
–>
1%
of the number of our ordinary shares then outstanding, which will equal
approximately                           shares immediately after this offering, based on the number
of our ordinary shares outstanding as of                           ; or
–>
the
average weekly trading volume of our ordinary shares on the Nasdaq Global Market during the four calendar weeks preceding the filing of a notice on
Form 144 with respect to the sale.
If
the one-year holding period applies, then at its expiration, a person who was not one of our affiliates at any time during the three months preceding a sale would be entitled to sell an
unlimited number of our ordinary shares without restriction. A person who was one of our affiliates at any time during the three months preceding a sale would remain subject to the volume restrictions
described above. Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and
to the availability of current public information about us.
EFFECTS OF SALES OF SHARES
No predictions can be made as to the effect, if any, that sales of our ordinary shares from time to time, or the availability of our ordinary shares
for future sale, may have on the market price for our ordinary shares. Sales of substantial amounts of ordinary shares, or the perception that such sales could occur, could adversely affect prevailing
market prices for our ordinary shares and could impair our future ability to obtain capital through an offering of equity securities.
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REGISTRATION RIGHTS
Upon the closing of this offering, the Sponsors and their affiliates, which will indirectly hold an aggregate
of                           of our ordinary
shares, will have the right to require us to register their shares under the Securities Act under specified circumstances. After registration and sale pursuant to these rights, these shares will
become freely tradable without restriction under the Securities Act. Please see "Certain Relationships and Related Party Transactions—Shareholders and Registration Rights Agreement" for
additional information regarding these registration rights.
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Description of Share Capital
As of the date of this offering, our authorized share capital will consist of 100,000,000 ordinary shares, par value $0.0001 per
share, and 25,000,000 undesignated preferred shares, par value $0.0001 per share. As of                           ,
2011,                           ordinary shares were issued and outstanding and no shares of undesignated
preferred shares were outstanding. An additional                           ordinary shares may be issued upon
exercise of options under our stock option plan. The following summary description relating to our
share capital does not purport to be complete and is qualified in its entirety by our memorandum and articles of association, copies of which are available as set forth in the section captioned "Where
You Can Find More Information".
ORDINARY SHARES
Holders of ordinary shares are entitled to cast one vote for each share on all matters submitted to a vote of shareholders, including the election of
directors. The holders of ordinary shares are entitled to receive ratably such dividends, if any, as may be declared by our directors out of funds legally available therefor. We have not in the past
paid and do not expect for the foreseeable future to pay, dividends on our ordinary shares. Instead, we anticipate that all of our earnings, if any, in the foreseeable future will be used for working
capital and other general corporate purposes. Any future determination to pay dividends will be at the discretion of our board of directors and will depend upon, among other factors, our results of
operations, financial condition, capital requirements and contractual restrictions. Such holders do not have any preemptive or other rights to subscribe for additional shares. All holders of ordinary
shares are entitled to share ratably in any assets for distribution to shareholders upon our liquidation, dissolution or winding up.
There
are no conversion, redemption or sinking fund provisions applicable to the ordinary shares. All outstanding ordinary shares are fully paid and nonassessable.
PREFERRED SHARES
Pursuant to our articles of association to be in effect upon the completion of this offering, our board of directors will be authorized, without any
action by our shareholders, to designate and issue preferred shares in one or more series and to designate the powers, preferences and rights of each series, which may be greater than the rights of
our ordinary shares. It is not possible to state the actual effect of the issuance of any shares of preferred shares upon the rights of holders of our ordinary shares until the board of directors
determines the specific rights of the holders of such preferred shares. However, the effects might include, among other things:
–>
impairing
dividend rights of our ordinary shares;
–>
diluting
the voting power of our ordinary shares;
–>
impairing
the liquidation rights of our ordinary shares; and
–>
delaying
or preventing a change of control of us without further action by our shareholders.
Upon
the completion of this offering, no shares of our preferred shares will be outstanding, and we have no present plan to issue any of our preferred shares following this offering.
LIMITATIONS ON THE RIGHT TO OWN OR VOTE SHARES
As a Cayman Islands company, we may not hold our own shares as a shareholder, save for shares that are acquired and held as treasury shares. We may
not exercise any voting or other rights in respect of treasury shares nor may any dividend be declared or paid or other distribution be made in respect of treasury shares.
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Description of Share Capital
However,
bonus shares may be issued in respect of treasury shares although they will, in turn, be treated as treasury shares.
LIMITATIONS ON TRANSFER OF SHARES
Our articles of association give our directors, at their discretion, the right to decline to register any transfers of shares that are not fully
paid-up shares.
DISCLOSURE OF SHAREHOLDER OWNERSHIP
There are no provisions in our memorandum of association or articles of association governing the ownership threshold above which shareholder
ownership must be disclosed by any shareholder.
CHANGES IN SHARE CAPITAL
We may, from time to time, by ordinary resolution passed by a majority of the votes cast by shareholders present at a shareholder meeting entitled to
vote on such resolution, or passed by a written consent of shareholders holding not less than a majority of our shares outstanding for so long as we are a controlled company, increase our share
capital by such sum, to be allocated among shares of such par value, as the resolution shall prescribe. The new shares shall be subject to the same provisions with reference to the payment of calls,
liens, transfers, transmissions, forfeitures and otherwise as the shares in the original share capital. We may by ordinary resolution passed at a shareholder meeting by a majority of the votes cast by
shareholders present at such meeting and entitled to vote on such resolution, or passed by a written consent of shareholders holding not less than a majority of our shares outstanding for so long as
we are a controlled company:
–>
consolidate
our share capital into shares of larger par value than our existing shares;
–>
sub-divide
our share capital into shares of smaller par value;
–>
divide
our shares into multiple classes; and
–>
cancel
any shares which, at the date of the passing of the resolution, have not been issued and diminish the amount of the shares so cancelled.
We
may by special resolution passed by at least two-thirds of the votes cast by shareholders present at a shareholder meeting and entitled to vote on such resolution, or passed by a
unanimous written consent of such persons, reduce our share capital or any capital redemption reserve fund or other undistributable reserve in any manner authorized by law.
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DIFFERENCES IN CORPORATE LAW
The Cayman Islands Companies Law is modeled after the corporate legislation of the United Kingdom but does not follow recent United Kingdom statutory
enactments, and differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies
Law applicable to us and the laws applicable to companies incorporated in the United States (particularly Delaware) and their shareholders.
Delaware
Cayman Islands
Title of Organizational
Documents
Certificate of incorporation
Bylaws
Memorandum of association
Articles of association
Duties of Directors
Under Delaware law, the business and affairs of a corporation are managed by or under the direction of its board of directors. In
exercising their powers, directors are charged with a fiduciary duty of care to protect the interests of the corporation and a fiduciary duty of loyalty to act in the best interests of its shareholders. The duty of care requires that directors act in
an informed and deliberative manner and inform themselves, prior to making a business decision, of all material information reasonably available to them. The duty of care also requires that directors exercise care in overseeing and investigating the
conduct of the corporation's employees. The duty of loyalty may be summarized as the duty to act in good faith, not out of self-interest, and in a manner which the director reasonably believes to be in the best interests of the
shareholders.
As a matter of Cayman Islands law, directors of Cayman Islands companies owe a fiduciary duty to the their respective companies
to act in good faith in their dealings with or on behalf of the company and exercise their powers and fulfill the duties of their office honestly. This duty has four essential elements:
-->a duty to act in good faith in the best interests of the company;
-->a duty not to personally profit from opportunities that arise from the office of director;
-->a duty to avoid conflicts of interest; and
-->a duty to exercise powers for the purpose for which such powers were intended.
A director of a Cayman Islands company also owes the company a duty to act with skill and care. A director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her
knowledge and experience.
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Description of Share Capital
Delaware
Cayman Islands
Limitations on Personal
Liability of Directors
Subject to the limitations described below, a certificate of incorporation may provide for the elimination or limitation of the personal liability of a director to the corporation or its shareholders for monetary damages for a breach of fiduciary
duty as a director.
Such provision cannot limit liability for breach of loyalty, bad faith, intentional misconduct, unlawful payment of dividends or unlawful share purchase or redemption. In addition, the certificate of incorporation cannot limit liability for any act
or omission occurring prior to the date when such provision becomes effective.
The Companies Law of the Cayman Islands has no equivalent provision to Delaware law regarding the limitation of director's liability. However, as a matter of public policy, Cayman Islands law will not allow the limitation of a director's liability to
the extent that the liability is a consequence of the director committing a crime or of the director's own fraud or dishonesty.
Indemnification of
Directors, Officers, Agents, and Others
A corporation has the power to indemnify any director, officer, employee, or agent of corporation who was, is, or is threatened to be made a party who acted in good faith and in a manner he believed to be in the best interests of the corporation, and
if with respect to a criminal proceeding, had no reasonable cause to believe his conduct would be unlawful, against amounts actually and reasonably incurred.
Cayman Islands law does not limit the extent to which a company's articles of association may provide for indemnification of directors and officers, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to
public policy, such as to provide indemnification against the consequences of committing a crime, or against the indemnified person's own fraud or dishonesty.
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Description of Share Capital
Delaware
Cayman Islands
Interested Directors
Under Delaware law, a transaction in which a director who has an interest in such transaction would not be voidable if (1) the material
facts as to such interested director's relationship or interests are disclosed or are known to the board of directors and the board in good faith authorizes the transaction by the affirmative vote of a majority of the disinterested directors, even
though the disinterested directors are less than a quorum, (2) such material facts are disclosed or are known to the shareholders entitled to vote on such transaction and the transaction is specifically approved in good faith by vote of the
shareholders, or (3) the transaction is fair as to the corporation as of the time it is authorized, approved or ratified. Under Delaware law, a director could be held liable for any transaction in which such director derived an improper personal
benefit.
Our articles of association contain provisions that permit a director to vote on a transaction in which he or she is interested provided he or
she discloses such interest to the board of directors. As under Delaware law, a director could be held liable for any transaction in which such director derived an improper personal benefit.
Voting Requirements
The certificate of incorporation may include a provision requiring supermajority approval by the directors or shareholders for
any corporate action.
In addition, under Delaware law, certain business combinations involving interested shareholders require approval by a supermajority of the non-interested shareholders.
For the protection of shareholders, certain matters must be approved by special resolution of the shareholders, including
alteration of the memorandum or articles of association, appointment of inspectors to examine company affairs, reduction of share capital, change of name, authorization of a plan of merger or consolidation or voluntary winding up the
company.
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Delaware
Cayman Islands
The Companies Law of the Cayman Islands requires that a special resolution be passed by a majority of two-thirds (66.66%) or such higher majority
as set forth in the articles of association, of shareholders voting at a general meeting, or by unanimous written consent of shareholders.
Under our articles of association, certain business combinations involving interested shareholders require approval by a supermajority of the non-interested shareholders.
Voting for Directors
Under Delaware law, unless otherwise specified in the certificate of incorporation or bylaws of the corporation, directors shall
be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.
The Companies Law of the Cayman Islands defines "special resolutions" only. A company's articles of association can therefore
tailor the definition of "ordinary resolutions" as a whole, or with respect to specific provisions. Our articles of association provide that with respect to the election of directors, an ordinary resolution shall be passed by a plurality
vote.
Cumulative Voting
No cumulative voting for the election of directors unless so provided in the certificate of incorporation.
No cumulative voting for the election of directors unless so provided in the articles of association.
Directors' Powers
Regarding Bylaws
The certificate of incorporation may grant the directors the power to adopt, amend or repeal bylaws.
The memorandum and articles of association may only be amended by a special resolution of the shareholders.
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Delaware
Cayman Islands
Nomination and Removal of Directors and Filling Vacancies on Board
Shareholders may generally nominate directors if they comply with advance notice provisions and other procedural requirements in company bylaws. Holders of a majority of the shares may remove a director with or without cause, except in certain cases
involving a classified board or if the company uses cumulative voting. Unless otherwise provided for in the certificate of incorporation, directorship vacancies are filled by a majority of the directors elected or then in office.
Nomination and removal of directors and filling of board vacancies are governed by the terms of the articles of association. Our articles of association provide that only shareholders that beneficially own more than 15% of our outstanding ordinary
shares (unless the Exchange Act and proxy rules provide otherwise) and comply with our advance notice provisions may nominate directors. Our articles of association also provide that shareholders may only remove directors for cause and with a
supermajority of two-thirds. This right to remove directors may not be used to remove directors nominated by our Principal Sponsors. Under our articles of association, vacancies on the board are generally filled by the vote of a majority of the
directors elected or then in office, subject to the rights of our Principal Sponsors.
Mergers and Similar
Arrangements
Under Delaware law, with certain exceptions, a merger, consolidation, exchange or sale of all or substantially all the assets of a corporation must be approved by the board of directors and a majority of the outstanding shares entitled to vote
thereon. Under Delaware law, a shareholder of a corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which such shareholder may receive cash in the amount of
the fair value of the shares held by such shareholder (as determined by a court) in lieu of the consideration such shareholder would otherwise receive in the transaction.
Cayman Islands companies law has recently been amended to simplify mergers and consolidations where two or more companies are being formed into a single entity. The new legislation makes a distinction between a "consolidation" and a "merger". In a
consolidation, a new entity is formed from the combination of each participating company, and the separate consolidating parties, as a consequence, cease to exist and are each stricken by the Registrar of Companies. In a merger, one company remains
as the surviving entity, having in effect absorbed the other merging parties that are then stricken and cease to exist.
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Delaware
Cayman Islands
Delaware law also provides that a parent corporation, by resolution of its board of directors, may merge with any subsidiary, of
which it owns at least 90% of each class of capital stock without a vote by shareholders of such subsidiary. Upon any such merger, dissenting shareholders of the subsidiary would have appraisal rights.
Two or more Cayman-registered companies may merge or consolidate. Cayman-registered companies may also merge or consolidate with
foreign companies provided that the laws of the foreign jurisdiction permit such merger or consolidation.
Under the new rules, a plan of merger or consolidation shall be authorised by each constituent company by way of (a) a special resolution of the members of each such constituent company; and (b) such other authorisation, if any, as may be
specified in such constituent company's articles of association.
Shareholder approval is not required where a parent company registered in the Cayman Islands seeks to merge with one or more of
its subsidiaries registered in the Cayman Islands ("vertical amalgamation") and a copy of the plan of merger is given to every member of each subsidiary company to be merged unless that member agrees otherwise.
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Delaware
Cayman Islands
Creditors must be asked approve the merger although application can be made to the Grand Court of the Cayman Islands to proceed
notwithstanding a dissenting creditor. Where a foreign company wishes to combine with a Cayman company, consent or approval to the transfer of any security interest granted by the foreign company to the resulting Cayman entity in the transaction is
required, unless otherwise released or waived by the secured party. If the merger plan is approved, it is then filed with the Cayman Islands General Registry along with a declaration by a director of each company. The Registrar of Companies will then
issue a certificate formalizing the merger or consolidation. The surviving entity remains active while the other company or companies are automatically dissolved. Unless the shares of such shareholder are publicly listed or quoted, dissenting
shareholders in a merger or consolidation of this type are entitled to payment of the fair value of their shares if such shareholder provides a written objection before the vote.
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Delaware
Cayman Islands
Cayman companies may also be restructured or amalgamated under supervision of the Grand Court of the Cayman Islands by way of a
"scheme of arrangement." This option is not used with any frequency because a business transaction can be achieved through other means, such as a share capital exchange, merger (as described above), asset acquisition or control, through contractual
arrangements, of an operating business. In the event that a business transaction is sought pursuant to a scheme of arrangement it would require the approval of a majority, in number, of each class of shareholders and creditors with whom the
arrangement is to be made and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meeting summoned for
that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the Court the view that the
transaction ought not be approved, the Court can be expected to approve the arrangement if it satisfies itself that:
-->the company is not proposing to act illegally or beyond the scope of its authority and the statutory provisions as to majority vote have been complied with;
-->the shareholders have been fairly represented at the meeting in question;
-->the arrangement is such as a businessman would reasonably approve; and
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Delaware
Cayman Islands
-->the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law of the Cayman Islands or
that would amount to a "fraud on the minority" (a legal concept, different than "fraud" in the sense of dishonesty).
When a takeover offer is made and accepted by holders of 90% of the shares within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection may
be made to the Grand Court of the Cayman Islands but is unlikely to succeed unless there is evidence of fraud, bad faith or collusion.
If the arrangement and reconstruction are thus approved, any dissenting shareholders would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of United States corporations,
providing rights to receive payment in cash for the judicially determined value of the shares.
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Delaware
Cayman Islands
Shareholder Suits
Class actions and derivative actions generally are available to shareholders under Delaware law for, among other things, breach
of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court generally has discretion to permit the winning party to recover attorneys' fees incurred in connection with such
action.
The rights of shareholders under Cayman Islands law are not as extensive as those under Delaware law. Class actions and
derivative actions are generally not available to shareholders under Cayman Islands laws and our Cayman Islands counsel is not aware of a significant number of such reported actions having been brought in Cayman Islands courts. In principle, we will
normally be the proper plaintiff and a derivative action may not be brought by a minority shareholder. However, the Cayman Islands courts would ordinarily be expected to follow English case law precedent, which would permit a shareholder to commence
an action in the company's name to remedy a wrong done to it where the act complained of is alleged to be beyond the company's corporate power or is illegal or would result in the violation of its memorandum of association or articles of association
or where the individual rights of the plaintiff shareholder have been infringed or are about to be infringed. Furthermore, consideration would be given by the court to acts that are alleged to constitute a "fraud on the minority" or where an act
requires the approval of a greater percentage of shareholders than actually approved it. The winning party in such an action generally would be able to recover a portion of attorney's fees incurred in connection with such action.
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Delaware
Cayman Islands
Inspection of Corporate
Records
Under Delaware law, shareholders of a Delaware corporation have the right during normal business hours to inspect for any proper purpose, and to obtain copies of list(s) of shareholders and other books and records of the corporation and its
subsidiaries, if any, to the extent the books and records of such subsidiaries are available to the corporation.
Shareholders of a Cayman Islands company have no general right under Cayman Islands law to inspect or obtain copies of a list of shareholders or other corporate records of the company. However, these rights may be provided in the company's articles
of association.
Shareholder Proposals
Unless provided in the corporation's certificate of incorporation or bylaws, Delaware law does not include a provision
restricting the manner in which shareholders may bring business before a meeting.
The Companies Law of the Cayman Islands does not provide shareholders any right to bring business before a meeting or requisition
a general meeting. However, these rights may be provided in the company's articles of association.
Approval of Corporate
Matters by Written
Consent
Delaware law permits shareholders to take action by written consent signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting of
shareholders.
The Companies Law of the Cayman Islands allows a special resolution to be passed in writing if signed by all the shareholders and authorized by the articles of association.
Our articles of association authorize such written consents while we are a "controlled company", but we believe that the
unanimity requirement will make this option impractical after the consummation of this offering. Written consents are not authorized if we are not a "controlled company".
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Delaware
Cayman Islands
Calling of Special
Shareholders Meetings
Delaware law permits the board of directors or any person who is authorized under a corporation's certificate of incorporation or bylaws to call a special meeting of shareholders.
The Companies Law of the Cayman Islands does not have provisions governing the proceedings of shareholders meetings which are usually provided in the articles of association.
Our articles of association allow shareholders holding a majority of our stock to call special meetings while we are a "controlled company"; thereafter, shareholders will be precluded from calling special meetings.
STOCK OPTION PLAN
For information on our 2011 Equity Incentive Plan, please see "Executive Compensation—Compensation Discussion and Analysis".
REGISTRATION RIGHTS
For information on our Sponsors' registration rights, please see "Certain Relationships and Related Party Transactions—Agreements with
Our Sponsors".
CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK
Upon completion of this offering, we will have                           ordinary shares remaining
authorized but unissued. Authorized but unissued ordinary
shares are available for future issuance without shareholder approval. Issuance of these shares will dilute your percentage ownership in us.
LISTING
We intend to apply for the listing of our ordinary shares on the Nasdaq Global Market under the symbol "ISLA".
TRANSFER AGENT AND REGISTRAR
We intend to engage                           to serve as the transfer agent and registrar for our
ordinary shares.
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OUR NEW CREDIT FACILITIES
In connection with this offering, we intend to enter into a new senior secured credit facility consisting of a $              million senior
secured term loan with a $              million senior secured revolving credit facility. The proceeds of the new term loan will be used to repay the portion of the loans under our
existing
senior secured credit agreement that is not repaid with the proceeds of this offering. We expect the new senior secured credit facility to be completed substantially concurrently with the closing of
this offering. Our entry into the new senior secured credit facility is conditioned on the completion of this offering.
We
anticipate that the new senior secured credit facility will reduce our annual interest expense and subject us to less restrictive financial covenants.
OUR EXISTING CREDIT AGREEMENTS
Prior to the offering, our primary lending arrangements consist of a senior secured credit agreement and a mezzanine credit agreement, each entered
into on September 30,
2010 with a syndicate of lenders, including certain of our Sponsors. The principal terms of each are described below.
Senior Secured Credit Agreement
Our senior secured credit agreement consists of a senior secured term loan of $210.0 million, the full amount of which was drawn at closing on
September 30, 2010. The proceeds were used to refinance part of our then-existing first- and second-lien term loans and to provide for the ongoing working capital and other general
corporate purposes of the Company. Loans under the senior secured agreement bear interest, at our option, at a rate per annum equal either to a base rate (that can be no less than 3%, plus 7%), or an
adjusted Eurodollar rate (that can be no less than 2%, plus 8%). The term loan under the senior secured credit agreement was issued at a discount of $28.5 million on September 30, 2010.
As of July 2, 2011 we had $210.0 million outstanding under the senior secured credit agreement, bearing interest at 10% per annum. The unamortized discount was $25.3 million,
resulting in a net balance of $184.7 million. Loans under this agreement mature on September 30, 2015. The borrower under this agreement is our wholly-owned subsidiary, Isola USA Corp.,
and loans under the agreement are guaranteed by various Isola group subsidiaries.
The
senior secured credit agreement requires us to maintain certain covenants that restrict our ability to operate our business, including, but not limited to, restrictions on the ability of the
borrower and certain Isola group subsidiaries to (i) dispose of assets or stock; (ii) incur additional indebtedness and guarantee obligations; (iii) pay certain dividends;
(iv) create liens on assets; (v) make investments, loans or advances; (vi) restrict distributions to the borrowers or guarantors from their subsidiaries; (vii) engage in
mergers or consolidations; (viii) engage in certain transactions with affiliates; (ix) incur additional negative pledges; (x) incur capital expenditures; (xi) change our
fiscal year or accounting practices or the lines of business in which we and our subsidiaries are involved; (xii) enter into sale-leaseback transactions; (xiii) prepay
principal of, premium, or interest on, or redeem, purchase, retire, defease, or create a sinking fund or make a similar payment with respect to, any subordinated indebtedness and certain other debt;
(xiv) change the conduct of business; (xv) conduct activities of any parent holding company; (xvi) amend our organizational documents; (xvii) cease to keep in full force
and effect our corporate existence and all rights, franchises, licenses and permits material to our business; (xviii) not pay our taxes or certain claims when they are due; or
(xix) allow insurance to expire.
Our
senior secured credit agreement also requires us to meet certain financial covenants that change over time. Specifically, we are required to comply with an interest coverage ratio and a leverage
ratio.
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The
interest coverage ratio is the ratio of Consolidated Adjusted EBITDA to consolidated interest expense for a rolling four-fiscal quarter period. At July 2, 2011 the required
interest coverage ratio was at 1.75:1.00, and our actual ratio was 2.81:1.00. The required interest coverage ratio increases over time, to 2.00:1:00 effective March 31, 2012 and increasing to
2.25:1:00 effective December 28, 2013.
The
leverage ratio is the ratio of consolidated total secured debt to Consolidated Adjusted EBITDA for a rolling four-fiscal quarter period. At July 2, 2011, the maximum allowed
leverage ratio was at 3.35:1.00, and our actual leverage ratio was 2.19:1.00. The maximum leverage ratio decreases over time, to 3.25:1.00 effective December 31, 2012 and decreasing to
2.25:1.00 effective June 28, 2014.
The
definition of Consolidated Adjusted EBITDA under the senior secured credit agreement differs from Adjusted EBITDA used elsewhere in the prospectus. Under our senior secured credit agreement,
Consolidated Adjusted EBITDA includes additional add-backs to net income for certain pension costs and other costs, fees, taxes, losses, charges, write-offs, write-downs and
expenses.
Mezzanine Credit Agreement
On September 30, 2010, we issued an initial principal amount of $175.0 million in unsecured term loans pursuant to our mezzanine credit
agreement. The proceeds were used in part to refinance our then-existing first- and second-lien term debt, as well as to pay other fees and expenses related to the mezzanine
credit agreement. The unsecured term loans issued pursuant to the mezzanine credit agreement are subordinate and junior to the prior payment in full of all principal, interest and other obligations
owed under the secured term loans issued under our senior secured credit agreement. The unsecured term loans issued pursuant to the mezzanine credit agreement bear interest at a rate of 16% per annum,
payable quarterly each March 31, June 30, September 30 and December 31 of each year until maturity, with half (8% per annum) payable in cash and the other half (8% per
annum) payable by accreting such amount to the outstanding principal amount of the unsecured term loans. The unsecured term loans under the mezzanine credit agreement were issued at a discount of
$70.4 million on September 30, 2010. As of July 2, 2011, we had principal of $185.7 million outstanding under the mezzanine credit agreement, which included
$10.7 million of accreted PIK interest and a net discount of $66.2 million. The unamortized discount was $66.2 million resulting in a net balance of $119.5 million. Loans
under this
agreement mature on March 24, 2016. The borrower under the mezzanine credit agreement is our wholly-owned subsidiary Isola USA Corp., and its obligations are guaranteed by various Isola Group
subsidiaries.
Our
mezzanine credit agreement requires us to maintain certain financial and operating covenants that are substantially similar to the covenants governing our senior secured credit agreement.
Mandatory Prepayments.
We are required to pay down the loans under our senior credit agreement under certain circumstances, such as upon the issuance of equity
securities (such as this offering) or the issuance of debt, the sale of assets or, commencing with the fiscal year ending December 31, 2011, upon the accumulation of "excess cash flow" as
defined in the agreements, with 75% of the proceeds going to pay down the loans under our senior secured credit agreement. We are required to pay down all amounts outstanding under our mezzanine
credit agreement upon the occurrence of a change in control. We intend to use the net proceeds from this offering and a portion of the proceeds from the term loan described above under "Our New Credit
Facilities" to repay loans under these credit agreements in their entirety.
Concurrent Equity Issuance.
In connection with the unsecured term loans, the mezzanine lenders purchased equity interests in the Sponsor Holding Company for an
aggregate purchase price of $57.7 million approximately equal to                           of our ordinary
shares, and our Luxembourg Holding Company issued Class C convertible preferred
certificates with an aggregate par value of 43.5 million euro. These Class C convertible preferred certificates were issued at an aggregate discount of 25.3 million euro. As of
July 2, 2011, these Class C convertible preferred certificates had $62.3 million in outstanding principal and an unamortized discount balance of $36.7 million, resulting in
a net balance of $26.5 million.
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CAYMAN ISLANDS TAXATION
The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no
taxation in the nature of inheritance tax or estate duty. There are no other taxes levied by the Government of the Cayman Islands that are likely to be material to holders of ordinary shares. Even
though the Cayman Islands has no direct taxation, it has entered into some limited tax treaties with certain countries. There are no exchange control regulations or currency restrictions in the Cayman
Islands.
Pursuant
to Section 6 of the Tax Concessions Law (1999 Revision) of the Cayman Islands, we have obtained an undertaking from the Governor-in-Council:
(1)   that
no law which is enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciation shall apply to us or our operations; and
(2)   that
the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on our shares, debentures or other obligations.
The
undertaking for us is for a period of twenty years from                           .
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of the material U.S. federal income tax consequences of owning and disposing of ordinary shares issued pursuant to this
offering, but does not purport to be a complete analysis of all the potential tax considerations relating thereto. The discussion applies to U.S. Holders (as defined below) who hold our ordinary
shares as capital assets for tax purposes and it does not describe all of the tax consequences that may be relevant to holders subject to special rules, such as:
–>
certain
financial institutions;
–>
insurance
companies;
–>
dealers
and traders in securities or foreign currencies;
–>
persons
holding ordinary shares as part of a hedge, straddle, conversion transaction or other integrated transaction;
–>
persons
whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
–>
regulated
investment companies;
–>
real
estate investment trusts;
–>
tax-exempt
organizations; or
–>
persons
holding ordinary shares that own or are deemed to own ten percent or more of our stock as measured by vote or value.
This
summary is based upon the provisions of the Internal Revenue Code, Treasury regulations promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof. These
authorities may be changed, possibly retroactively, so as to result in U.S. federal income tax consequences different from those set forth below. No ruling has been or will be sought from the Internal
Revenue Service, or the IRS, with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS will agree with such statements and
conclusions. Please consult your
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own
tax advisers concerning the U.S. federal, state, local and foreign tax consequences of owning and disposing of ordinary shares in your particular circumstances.
In
addition, if a partnership or entity classified as a partnership for U.S. federal income tax purposes holds our ordinary shares, the tax treatment of a partner in the partnership or other entity
taxed as a partnership generally will depend on the status of the equity owner of such partnership or other entity taxed as a partnership and upon the activities of the partnership or other entity
taxed as a partnership. Accordingly, if you are a partnership or other entity taxed as a partnership that holds our ordinary shares, or if you are an owner in such partnership or other entity taxed as
a partnership, you are urged to consult your tax advisors regarding the specific U.S. federal income tax consequences of the ownership and disposition of our ordinary shares.
A
U.S. Holder is a beneficial owner of ordinary shares that is, for U.S. federal tax purposes:
–>
an
individual citizen or resident of the United States;
–>
a
corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any state thereof or the District of
Columbia;
–>
an
estate whose income is subject to U.S. federal income taxation regardless of its source; or
–>
a
trust (x) whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to
control all substantial decisions of the trust or (y) which has made an election to be treated as a U.S. person.
TAXATION OF DISTRIBUTIONS
Subject to the passive foreign investment company rules described below, distributions paid on ordinary shares will be treated as dividends to the
extent paid out of current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we do not maintain calculations of our earnings and profits under U.S.
federal income tax principles, it is expected that distributions generally will be reported to you as dividends. Subject to applicable limitations, dividends received by non-corporate U.S.
Holders in taxable years beginning before January 1, 2013 will be taxable at a maximum rate of 15% provided that the U.S. Holder has held the shares for the required holding period set forth
under the Internal Revenue Code. U.S. Holders should consult their own tax advisors regarding the implications of these rules in their particular circumstances. Distributions in excess of current and
accumulated earnings and profits generally will be applied against and reduce your basis in our ordinary shares (but not below zero) and, to the extent in excess of such basis, will be treated as gain
from the sale or exchange of such ordinary shares as described below under the heading "Sale and Other Disposition of Ordinary Shares".
In
general, dividends will not be eligible for the dividends received deduction generally allowed to U.S. corporations under the Internal Revenue Code. Any dividends received will generally be treated
as foreign-source dividend income to you.
SALE AND OTHER DISPOSITION OF ORDINARY SHARES
Subject to the passive foreign investment company rules described below, for U.S. federal income tax purposes, gain or loss you realize on the sale
or other disposition of ordinary shares will be capital gain or loss, and will be long-term capital gain or loss if you have held the ordinary shares for more than one year. The amount of
your gain or loss will be equal to the difference between your tax basis in the ordinary shares disposed of and the amount realized on the disposition. The deductibility of capital losses is subject
to limitations. Such gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes.
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PASSIVE FOREIGN INVESTMENT COMPANY RULES
We believe that we are not currently, and will not be considered in the future, a "passive foreign investment company" ("PFIC") for U.S. federal
income tax purposes. However, since PFIC status depends upon the composition of a company's income and assets and the market value of its assets (including, among others, less than 25 percent
owned equity investments) from time to time, there can be no assurance that we will not be considered a PFIC for any taxable year. If we were treated as a PFIC for any taxable year during which you
held our ordinary shares, certain adverse consequences could apply to you.
If
we are treated as a PFIC for any taxable year, gain recognized by you on a sale or other disposition of an ordinary share would be allocated ratably over your holding period for the ordinary share.
The amounts allocated to the taxable year of the sale or other exchange and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would
be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, and an interest charge would be imposed on the amount allocated to such taxable year. Further, to the
extent that any distribution received by you in a taxable year exceeds 125% of the average of the annual distributions on the ordinary shares received during the preceding three years or your holding
period, whichever is shorter, that distribution would be subject to taxation in the same manner as gain, described immediately above. In addition, if we were to be treated as a PFIC for a taxable year
in which we pay a dividend or for the prior taxable year, the 15% dividend rate discussed above with respect to dividends paid to non-corporate holders would not apply. Certain elections
may be available (described below) to U.S. Holders that may mitigate the adverse consequences resulting from PFIC status.
A
U.S. Holder of "marketable stock" in a PFIC may make a mark-to-market election, provided that the ordinary shares are actively traded. We anticipate that the ordinary shares
should qualify as being actively traded, but no assurances may be given in this regard. If a U.S. Holder of ordinary shares makes this election, the U.S. Holder of ordinary shares will generally
(i) include as income for each taxable year the excess, if any, of the fair market value of ordinary shares held at the end of the taxable year over the adjusted tax basis of such ordinary
shares and (ii) deduct as a loss the excess, if any, of the adjusted tax basis of the ordinary shares over the fair market value of such ordinary shares held at the end of the taxable year, but
only to the extent of the amount previously included in income as a result of the mark-to-market election. The U.S. Holder's adjusted tax basis in the ordinary shares would be
adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. holder makes a mark-to-market election in respect of a
corporation classified as a PFIC and such corporation ceases to be classified as a PFIC, the U.S. holder will not be required to take into account the gain or loss described above during any period
that such corporation is not classified as a PFIC.
A
qualified electing fund election (a "QEF election") could also alleviate certain of the tax consequences referred to above. However, it is expected that the conditions necessary for making a QEF
election will not apply in the case of our ordinary shares, because we do not expect to make available the information necessary for U.S. Holders to report income and certain losses in a manner
consistent with the requirements for such elections.
If
a U.S. Holder owns our ordinary shares during any taxable year that we are a PFIC, such U.S. Holder may be subject to certain reporting obligations with respect to our ordinary shares, including
reporting on IRS Form 8621. In the case of a U.S. Holder that has held ordinary shares during any taxable year in respect of which we were classified as a PFIC and continued to hold such
ordinary shares (or any portion thereof), and has not previously made a mark-to-market election, and that is now considering making a mark-to-market
election for the first time, special tax rules may apply relating to purging the PFIC taint of such ordinary shares. Each U.S. Holder is urged to consult its tax advisor concerning the United States
federal income tax
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consequences
of purchasing, holding, and disposing ordinary shares if we are or become classified as a PFIC, including the possibility of making a mark-to-market election.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Payment of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are
subject to information reporting and to backup withholding unless (i) you are a corporation or other exempt recipient or (ii) in the case of backup withholding, you provide a correct
taxpayer identification number and certify that you are not subject to backup withholding.
The
amount of any backup withholding from a payment to you will be allowed as a credit against your U.S. federal income tax liability and may entitle you to a refund, provided that the required
information is furnished to the IRS.
For
taxable years beginning after March 18, 2010, new legislation requires certain U.S. Holders who are individuals to report information relating to stock of a non-U.S. person,
subject to certain exceptions (including an exception for stock held in custodial accounts maintained by a U.S. financial institution). U.S. Holders are urged to consult their tax advisors concerning
the effect, if any, of this legislation on their ownership and disposition of ordinary shares.
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We are offering the shares of our ordinary shares described in this prospectus and the accompanying prospectus through the
underwriters named below. UBS Securities LLC and Piper Jaffray & Co. are the joint book-running managers of this offering and the representatives of the underwriters.
We have entered into an underwriting agreement with the representatives. Subject to the terms and conditions of the underwriting agreement, each of the underwriters has severally agreed to purchase
and we have agreed to sell to the underwriters, the number of ordinary shares listed next to its name in the following table.
Underwriters
Number of
shares
UBS Securities LLC
Piper Jaffray & Co.
Needham & Company, LLC
Oppenheimer & Co. Inc.
Total
The underwriting agreement provides that the underwriters must buy all of the shares if they buy any of them. However, the underwriters are not required to take
or pay for the shares covered by the underwriters' over-allotment option described below.
Our
ordinary shares are offered subject to a number of conditions, including:
–>
receipt
and acceptance of our ordinary shares by the underwriters, and
–>
the
underwriters' right to reject orders in whole or in part.
In
connection with this offering, certain of the underwriters or securities dealers may distribute prospectuses electronically.
OVER-ALLOTMENT OPTION
We have granted the underwriters an option to buy up to an aggregate of             additional ordinary shares. If the underwriters exercise
their option in full, we will issue and sell up to             ordinary shares. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any,
made in connection with this offering. The underwriters have 30 days from the date of this prospectus to exercise this option. If the underwriters exercise this option, they will each purchase
additional shares approximately in proportion to the amounts specified in the table above.
COMMISSIONS AND DISCOUNTS
Shares sold by the underwriters to the public will initially be offered at the public offering price set forth on the cover of this prospectus. Any
shares sold by the underwriters to securities dealers may be sold at a discount of up to $             per share from the public offering price. Sales of shares made outside the United
States may
be made by affiliates of the underwriters. If all the shares are not sold at the public offering price, the representatives may change the offering price and the other selling terms. Upon execution of
the underwriting agreement, the underwriters will be obligated to purchase the shares at the prices and upon the terms stated therein.
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The
following table shows the per share and total underwriting discounts and commissions we will pay to the underwriters assuming both no exercise and full exercise of the underwriters' option to
purchase additional ordinary shares from us.
No exercise
Full exercise
Per share
$
$
Total
$
$
We estimate that the total expenses of this offering payable by us, not including the underwriting discounts and commissions, will be approximately
$             .
NO SALES OF SIMILAR SECURITIES
We, our executive officers and directors and certain holders of our outstanding ordinary shares, stock options and other equity awards that together
hold at least         % of our outstanding ordinary shares have entered into lock-up agreements with the underwriters. Under these agreements, subject to certain exceptions, we and
each of these persons may not, without the prior written approval of UBS Securities LLC, offer, sell, contract to sell or otherwise dispose of, directly or indirectly, or hedge our ordinary
shares or securities convertible into or exchangeable or exercisable for our ordinary shares. These restrictions will be in effect for a period of 180 days after the date of this prospectus. At
any time and without public notice, UBS Securities LLC, may, in its sole discretion, release some or all of the securities from these lock-up agreements.
INDEMNIFICATION
We have agreed to indemnify the underwriters against certain liabilities, including certain liabilities under the Securities Act. If we are unable to
provide this indemnification, we have agreed to contribute to payments the underwriters may be required to make in respect of those liabilities.
NASDAQ GLOBAL MARKET LISTING
Our ordinary shares are listed on the Nasdaq Global Market under the symbol "ISLA".
PRICE STABILIZATION, SHORT POSITIONS
In connection with this offering, the underwriters may engage in activities that stabilize, maintain or otherwise affect the price of our ordinary
shares, including:
–>
stabilizing
transactions;
–>
short
sales;
–>
purchases
to cover positions created by short sales;
–>
imposition
of penalty bids; and
–>
syndicate
covering transactions.
Stabilizing
transactions consist of bids or purchases made for the purpose of preventing or retarding a decline in the market price of our ordinary shares while this offering is in progress. These
transactions may also include making short sales of our ordinary shares, which involve the sale by the underwriters of a greater number of ordinary shares than they are required to purchase in this
offering, and purchasing ordinary shares on the open market to cover positions created by short sales. Short sales may be "covered
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short
sales", which are short positions in an amount not greater than the underwriters' over-allotment option referred to above, or may be "naked short sales", which are short positions in
excess of that amount.
The
underwriters may close out any covered short position by either exercising their over-allotment option, in whole or in part, or by purchasing shares in the open market. In making this
determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the
over-allotment option.
Naked
short sales are short sales made in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked
short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the ordinary shares in the open market that could adversely affect
investors who purchased in this offering.
The
underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives
have repurchased shares sold by or for the account of that underwriter in stabilizing or short covering transactions.
As
a result of these activities, the price of our ordinary shares may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be
discontinued
by the underwriters at any time. The underwriters may carry out these transactions on Nasdaq, in the over-the-counter market or otherwise.
DETERMINATION OF OFFERING PRICE
Prior to this offering, there was no public market for our ordinary shares. The initial public offering price will be determined by negotiation by us
and the representatives of the underwriters. The principal factors to be considered in determining the initial public offering price include:
–>
the
information set forth in this prospectus and otherwise available to representatives;
–>
our
history and prospects and the history and prospects for the industry in which we compete;
–>
our
past and present financial performance and an assessment of our management;
–>
our
prospects for future earnings and the present state of our development;
–>
the
general condition of the securities market at the time of this offering;
–>
the
recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and
–>
other
factors deemed relevant by the underwriters and us.
AFFILIATIONS
Certain of the underwriters and their affiliates have in the past provided, are currently providing and may in the future from time to time provide,
investment banking and other financing, trading, banking, research, transfer agent and trustee services to the Company or its subsidiaries, for which they have in the past received, and may currently
or in the future receive, customary fees and expenses.
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NOTICE TO INVESTORS
Notice to Prospective Investors in the European Economic Area.
In relation to each member state of the European Economic Area that has implemented the Prospectus
Directive (each, a relevant member state), other than Germany, with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the relevant
implementation date), an offer of securities described in this prospectus may not be made to the public in that relevant member state other than:
–>
to
any legal entity which is a qualified investor as defined in the Prospectus Directive;
–>
by
the Bookrunners to fewer than 100, or, if the Relevant Member State has implemented the relevant provisions of the 2010 PD Amending Directive, 150, natural or
legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the Bookrunners for any
such offer; or
–>
in
any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided
that no such offer of securities shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive.
For
purposes of this provision, the expression an "offer of securities to the public" in any relevant member state means the communication in any form and by any means of sufficient information on the
terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities, as the expression may be varied in that member state by any
measure implementing the Prospectus Directive in that member state, and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending
Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State, and includes any relevant implementing measure in each
relevant member state. The expression 2010 PD Amending Directive means Directive 2010/73/EU.
We
have not authorized and do not authorize the making of any offer of securities through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the
final placement of the securities as contemplated in this prospectus. Accordingly, no purchaser of the securities, other than the underwriters, is authorized to make any further offer of the
securities on behalf of us or the underwriters.
The
EEA selling restriction is in addition to any other selling restrictions set out in this prospectus.
Notice to Prospective Investors in Australia.
This offering memorandum is not a formal disclosure document and has not been, nor will be, lodged with the
Australian Securities and Investments Commission. It does not purport to contain all information that an investor or their professional advisers would expect to find in a prospectus or other
disclosure document (as defined in the Corporations Act 2001 (Australia)) for the purposes of Part 6D.2 of the Corporations Act 2001 (Australia) or in a product disclosure statement for the
purposes of Part 7.9 of the Corporations Act 2001 (Australia), in either case, in relation to the securities.
The
securities are not being offered in Australia to "retail clients" as defined in sections 761G and 761GA of the Corporations Act 2001 (Australia). This offering is being made in Australia
solely to "wholesale clients" for the purposes of section 761G of the Corporations Act 2001 (Australia) and, as such, no prospectus, product disclosure statement or other disclosure document in
relation to the securities has been, or will be, prepared.
This
offering memorandum does not constitute an offer in Australia other than to wholesale clients. By submitting an application for our securities, you represent and warrant to us that you are a
wholesale client for the purposes of section 761G of the Corporations Act 2001 (Australia). If any recipient of this offering
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Underwriting
memorandum
is not a wholesale client, no offer of, or invitation to apply for, our securities shall be deemed to be made to such recipient and no applications for our securities will be accepted from
such recipient. Any offer to a recipient in Australia, and any agreement arising from acceptance of such offer, is personal and may only be accepted by the recipient. In addition, by applying for our
securities you undertake to us that, for a period of 12 months from the date of issue of the securities, you will not transfer any interest in the securities to any person in Australia other
than to a wholesale client.
Notice to Prospective Investors in Hong Kong.
Our securities may not be offered or sold in Hong Kong, by means of this prospectus or any document other than
(i) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (ii) in circumstances which do
not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (iii) in other circumstances which do not result in the document being a
"prospectus" within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong). No advertisement, invitation or document relating to our securities may be issued or may be in the possession of
any person for the purpose of issue (in each case whether in Hong Kong or elsewhere) which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong
(except if permitted to do so under the securities laws of Hong Kong) other than with respect to the securities which are or are intended to be disposed of only to persons outside Hong Kong or only to
"professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.
Notice to Prospective Investors in Japan.
Our securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan ("the
Financial Instruments and Exchange Law") and our securities will not be offered or sold, directly or indirectly, in Japan, or to, or for the benefit of, any resident of Japan (which term as used
herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in
Japan, or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the
Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.
Notice to Prospective Investors in Singapore.
This document has not been registered as a prospectus with the Monetary Authority of Singapore and in Singapore, the
offer and sale of our securities is made pursuant to exemptions provided in sections 274 and 275 of the Securities and Futures Act, Chapter 289 of Singapore ("SFA"). Accordingly, this
prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of our securities may not be circulated or distributed, nor may our
securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional
investor as defined in Section 4A of the SFA pursuant to Section 274 of the SFA, (ii) to a relevant person as defined in section 275(2) of the SFA pursuant to
Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or
(iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with the conditions (if any) set forth in
the SFA. Moreover, this document is not a prospectus as defined in the SFA. Accordingly, statutory liability under the SFA in relation to the content of prospectuses would not apply. Prospective
investors in Singapore should consider carefully whether an investment in our securities is suitable for them.
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Where
our securities are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
–>
by
a corporation (which is not an accredited investor as defined in Section 4A of the SFA) the sole business of which is to hold investments and the entire
share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
–>
for
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an
accredited investor,
–>
for
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an
accredited investor,
shares
of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferable for six months after that corporation or that trust has acquired the
shares under Section 275 of the SFA, except:
–>
to
an institutional investor (for corporations under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or any
person pursuant to an offer that is made on terms that such shares of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its
equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the
conditions, specified in Section 275 of the SFA;
–>
where
no consideration is given for the transfer; or
–>
where
the transfer is by operation of law.
In
addition, investors in Singapore should note that the securities acquired by them are subject to resale and transfer restrictions specified under Section 276 of the SFA, and they, therefore,
should seek their own legal advice before effecting any resale or transfer of their securities.
Notice to Prospective Investors in Switzerland.
The Prospectus does not constitute an issue prospectus pursuant to Article 652a or Article 1156 of
the Swiss Code of Obligations ("CO") and the shares will not be listed on the SIX Swiss Exchange. Therefore, the Prospectus may not comply with the disclosure standards of the CO and/or the listing
rules (including any prospectus schemes) of the SIX Swiss Exchange. Accordingly, the shares may not be offered to the public in or from Switzerland, but only to a selected and limited circle of
investors, which do not subscribe to the shares with a view to distribution.
Notice to Prospective Investors in the United Kingdom.
This prospectus is only being distributed to and is only directed at: (1) persons who are outside the
United Kingdom; (2) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or
(3) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons falling within
(1)–(3) together being referred to as "relevant persons"). The shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such shares
will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this prospectus or any of its contents.
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Validity of Ordinary Shares
Certain legal matters as to U.S. law in connection with this offering will be passed upon for us by DLA Piper LLP (US),
Phoenix, Arizona. The validity of the ordinary shares offered hereby and certain other matters will be passed upon for us by Appleby, Cayman Islands. Certain legal matters relating to the offering
will be passed upon for the underwriters by Davis Polk & Wardwell LLP, Menlo Park, California.
Experts
The consolidated financial statements of Isola Group S.a.r.l. and Subsidiaries as of January 1, 2011 and December 26,
2009 and for each of the three years in the period ended January 1, 2011 included in this prospectus and the related financial statement schedules included elsewhere in the registration
statement have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports appearing herein and elsewhere in the registration
statement. Such financial statements and financial statement schedules are included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
The
balance sheet of Isola Group Ltd. as of September 20, 2011 (its date of incorporation) included in this prospectus has been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their report appearing herein. Such balance sheet is included in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
Additional Information
We have filed with the SEC a registration statement on Form S-1 under the Securities Act to register our ordinary
shares being offered in this prospectus. This prospectus, which forms part of the registration statement, does not contain all of the information included in the registration statement and the
exhibits and schedules thereto. You will find additional information about us and our ordinary shares in the registration statement. You may read and copy the registration statement and the exhibits
and schedules thereto, as well as other information that we file with the SEC, at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, DC 20549. You may
obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website (http://www.sec.gov) that
contains information that registrants, including us, file electronically with the SEC. Statements made in this prospectus about legal documents may not necessarily be complete and you should read the
documents, which are filed as exhibits to the registration statement or otherwise filed with the SEC. Our website address is www.isola-group.com. The contents of our website are not part of this
prospectus.
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statements of Isola Group S.a.r.l. and subsidiaries as of January 1, 2011 and December 26, 2009, and for
the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008
Report of Independent Registered Public Accounting Firm
F-2
Consolidated Balance Sheets
F-3
Consolidated Statements of Operations
F-4
Consolidated Statements of Stockholder's Deficiency and Comprehensive Income
(Loss)
F-5
Consolidated Statements of Cash Flows
F-8
Notes to Consolidated Financial Statements
F-9
Condensed Consolidated Financial Statements of Isola Group S.a.r.l. and subsidiaries as of July 2, 2011 and
June 26, 2010, and for the Six Months Ended July 2, 2011 and June 26, 2010
Condensed Consolidated Balance Sheets (Unaudited)
F-56
Condensed Consolidated Statements of Operations (Unaudited)
F-57
Condensed Consolidated Statement of Stockholder's Deficiency and Comprehensive
Loss (Unaudited)
F-58
Condensed Consolidated Statements of Cash Flows (Unaudited)
F-59
Notes to Condensed Consolidated Financial Statements (Unaudited)
F-61
Balance Sheet of Isola Group Ltd. as of September 20, 2011
Report of Independent Registered Public Accounting Firm
F-85
Balance Sheet
F-86
Notes to Balance Sheet
F-87
F-1
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Isola Group, S.a.r.l. and subsidiaries
Chandler, Arizona
We
have audited the accompanying consolidated balance sheets of Isola Group, S.a.r.l. and subsidiaries (the "Company") as of January 1, 2011 and December 26, 2009, and the related
consolidated statements of operations, stockholder's deficiency and comprehensive income (loss), and cash flows for the years ended January 1, 2011, December 26, 2009, and
December 27, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control
over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In
our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Isola Group, S.a.r.l. and subsidiaries as of January 1, 2011 and
December 26, 2009, and the results of their operations and their cash flows for the years ended January 1, 2011, December 26, 2009, and December 27, 2008, in conformity
with accounting principles generally accepted in the United States of America.
/S/
DELOITTE & TOUCHE LLP
Phoenix, Arizona
September 23, 2011
F-2
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
As of January 1, 2011 and December 26, 2009
January 1,
2011
December 26,
2009
(In thousands, except for share data)
ASSETS
CURRENT ASSETS:
Cash
$
36,733
$
38,932
Restricted cash
5,461
Accounts receivable—net of allowance for doubtful accounts of $3,896 and $3,823 at January 1, 2011 and December 26, 2009,
respectively
103,489
95,326
Other receivables
2,739
2,815
Inventories
45,066
36,595
Deferred tax assets
2,697
2,785
Prepaid expenses and other current assets
5,023
1,909
Total current assets
201,208
178,362
RESTRICTED CASH
1,886
9,678
PROPERTY, PLANT, AND EQUIPMENT—Net
139,597
142,940
INTANGIBLE ASSETS—Net
7,421
8,670
DEFERRED TAX ASSETS
7,747
8,583
DEBT ISSUANCE COSTS AND OTHER ASSETS
19,335
9,619
TOTAL ASSETS
$
377,194
$
357,852
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
CURRENT LIABILITIES:
Accounts payable
$
70,156
$
72,965
Short-term debt and current portion—long-term debt
21,084
316,582
Accrued liabilities
38,964
82,809
Deferred tax liabilities
277
1,449
Other current liabilities
1,122
6,656
Total current liabilities
131,603
480,461
LONG-TERM DEBT—Net of current portion
292,079
CONVERTIBLE PREFERRED CERTIFICATES
199,136
176,595
CAPITAL LEASE OBLIGATIONS—Net of current portion
14,468
16,408
EMBEDDED DERIVATIVE
66,395
27,513
PENSION AND OTHER RETIREMENT BENEFITS
42,532
35,129
UNCERTAIN TAX POSITIONS AND OTHER LIABILITIES
23,446
19,615
DEFERRED TAX LIABILITIES
5,099
489
Total liabilities
774,758
756,210
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDER'S DEFICIENCY:
Common stock, 25 Euro par value ($31)—500 shares authorized, issued, and outstanding
15
15
Additional paid-in capital
30,652
28,160
Accumulated deficit
(394,602
)
(399,684
)
Accumulated other comprehensive loss
(33,629
)
(26,849
)
Total stockholder's deficiency
(397,564
)
(398,358
)
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY
$
377,194
$
357,852
See notes to consolidated financial statements.
F-3
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008
January 1,
2011
December 26,
2009
December 27,
2008
(In thousands, except for share
and per share data)
REVENUES
$
611,987
$
416,140
$
570,333
COST OF GOODS SOLD
467,751
330,584
487,052
GROSS PROFIT
144,236
85,556
83,281
OPERATING EXPENSES
Sales, general, and administrative
65,271
59,656
62,763
Research and development
9,532
9,244
10,663
Restructuring
4,782
18,129
7,692
Goodwill impairment
8,513
Total operating expenses
79,585
87,029
89,631
OPERATING INCOME / (LOSS)
64,651
(1,473
)
(6,350
)
OTHER INCOME—Net
2,020
224
2,768
EMBEDDED DERIVATIVE GAIN / (LOSS)
25,030
(27,513
)
115,352
INTEREST EXPENSE
(72,134
)
(54,620
)
(58,478
)
INTEREST INCOME
339
453
1,307
FOREIGN EXCHANGE GAIN / (LOSS)—Net
9,596
(2,116
)
(341
)
INCOME / (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
29,502
(85,045
)
54,258
PROVISION FOR INCOME TAXES
(24,420
)
(6,504
)
(6,804
)
NET INCOME / (LOSS) FROM CONTINUING OPERATIONS
5,082
(91,549
)
47,454
LOSS FROM DISCONTINUED OPERATIONS
(9,177
)
(11,655
)
NET INCOME / (LOSS)
$
5,082
$
(100,726
)
$
35,799
NET INCOME / (LOSS) PER COMMON SHARE
Continuing operations
$
10.16
$
(183.10
)
$
94.91
Discontinued operations
—
(18.35
)
(23.31
)
$
10.16
$
(201.45
)
$
71.60
WEIGHTED AVERAGE NUMBER OF COMMON AND POTENTIAL COMMON SHARES OUTSTANDING
Basic
500
500
500
Diluted
500
500
500
PRO FORMA NET INCOME / (LOSS) PER ORDINARY SHARE (unaudited)
Basic
$
Diluted
$
WEIGHTED AVERAGE NUMBER OF ORDINARY AND POTENTIAL ORDINARY SHARES USED IN COMPUTING PRO FORMA NET INCOME / (LOSS) PER SHARE (unaudited)
Basic
Diluted
See notes to consolidated financial statements.
F-4
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIENCY AND COMPREHENSIVE INCOME (LOSS)
For the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008
Common stock
Additional
paid-in
capital
Accumulated
other
comprehensive
loss
Total
stockholder's
deficiency
Accumulated
deficit
Shares
Amount
(In thousands, except for share data)
BALANCE—December 29, 2007
500
$
15
$
25,181
$
(334,757
)
$
(14,892
)
$
(324,453
)
Stock-based compensation
1,222
1,222
Comprehensive income:
Net income
35,799
35,799
Other comprehensive gain / (loss) after tax:
Foreign currency translation adjustment
5,349
5,349
Changes in unamortized benefit plan costs (including tax of $493)
(20,475
)
(20,475
)
Total comprehensive income
20,673
BALANCE—December 27, 2008
500
$
15
$
26,403
$
(298,958
)
$
(30,018
)
$
(302,558
)
(Continued)
F-5
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIENCY AND COMPREHENSIVE INCOME (LOSS) (Continued)
For the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008
Common stock
Additional
paid-in
capital
Accumulated
other
comprehensive
loss
Total
stockholder's
deficiency
Accumulated
deficit
Shares
Amount
(In thousands, except for share data)
BALANCE—December 27, 2008
500
$
15
$
26,403
$
(298,958
)
$
(30,018
)
$
(302,558
)
Stock-based compensation
1,757
1,757
Comprehensive loss:
Net loss
(100,726
)
(100,726
)
Other comprehensive gain / (loss) after tax:
Foreign currency translation adjustment
(2,827
)
(2,827
)
Changes in unamortized benefit plan costs (including tax of $476)
5,996
5,996
Total comprehensive loss
(97,557
)
BALANCE—December 26, 2009
500
$
15
$
28,160
$
(399,684
)
$
(26,849
)
$
(398,358
)
(Continued)
F-6
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIENCY AND COMPREHENSIVE INCOME (LOSS) (Continued)
For the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008
Common stock
Additional
paid-in
capital
Accumulated
other
comprehensive
loss
Total
stockholder's
deficiency
Accumulated
deficit
Shares
Amount
(In thousands, except for share data)
BALANCE—December 26, 2009
500
$
15
$
28,160
$
(399,684
)
$
(26,849
)
$
(398,358
)
Capital contribution
577
577
Stock-based compensation
1,915
1,915
Comprehensive loss:
Net income
5,082
5,082
Other comprehensive gain / (loss) after tax:
Foreign currency translation adjustment
1,804
1,804
Changes in unamortized benefit plan costs (net of tax of $77)
(8,584
)
(8,584
)
Total comprehensive loss
(1,698
)
BALANCE—January 1, 2011
500
$
15
$
30,652
$
(394,602
)
$
(33,629
)
$
(397,564
)
(Concluded)
See notes to consolidated financial statements.
F-7
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008
January 1,
2011
December 26,
2009
December 27,
2008
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income / (loss)
$
5,082
$
(100,726
)
$
35,799
Adjustments to reconcile net income / (loss) to cash used in operating activities:
Depreciation and amortization
16,937
19,837
23,772
Provision for doubtful accounts
87
588
6,710
Change in fair value of derivatives
(25,091
)
26,392
(111,582
)
Foreign currency translation
(12,087
)
(2,772
)
(1,995
)
Impairment of property, plant and equipment
4,122
3,338
Impairment of goodwill
8,513
Deferred income taxes
4,896
(1,416
)
(1,789
)
Amortization and write-off of debt issuance costs
4,629
4,173
Accreted interest on notes to stockholder
(68
)
(233
)
Accreted interest on debt and amortization of discount
5,900
Accreted interest on convertible preferred certificates and amortization of discount
10,636
10,454
15,079
Stock-based compensation expense
2,219
1,757
1,222
Loss from disposal of discontinued operations
7,037
Gain on dispositions
(484
)
(224
)
(2,797
)
Change in operating assets and liabilities:
Accounts receivable
(6,702
)
(8,081
)
33,288
Other receivables
44
13
(176
)
Inventories
(9,006
)
(1,099
)
14,408
Prepaid expenses and other current assets
(450
)
130
1,753
Debt issuance costs and other assets
(1,434
)
1,390
1,420
Accounts payable
(3,711
)
(17,254
)
(39,541
)
Accrued liabilities
(44,770
)
42,688
(8,895
)
Other current liabilities
56
5,384
5,495
Pension and other postretirement employee benefits
(1,122
)
1,077
(949
)
Uncertain tax positions and other liabilities
(977
)
(4,328
)
(3,850
)
Net cash used in operating activities
(55,348
)
(15,099
)
(16,837
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from release of restricted cash
2,007
2,272
3,466
Payments for restricted cash
(3,396
)
(821
)
Payments for acquisition of property, plant, and equipment
(15,681
)
(6,200
)
(11,285
)
Proceeds from dispositions
4,396
350
4,882
Net cash used in investing activities
(9,278
)
(6,974
)
(3,758
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from financing transactions (Note 4)
376,393
Proceeds from debt
16,951
30,703
77,138
Payments of debt
(312,926
)
(45,092
)
(66,338
)
Payments of debt issuance costs
(19,215
)
(3,329
)
Proceeds from capital contributions
577
Proceeds from note receivable—stockholder
2,349
Payments of capital leases
(839
)
(1,032
)
(1,713
)
Payments for surrendered options
(299
)
Net cash provided by / (used in) financing activities
60,642
(13,072
)
5,758
EFFECT OF EXCHANGE RATES ON CASH
1,785
(7
)
357
NET DECREASE IN CASH
(2,199
)
(35,152
)
(14,480
)
CASH—Beginning of year
38,932
74,084
88,564
CASH—End of year
$
36,733
$
38,932
$
74,084
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash payments during the year for:
Interest
$
94,999
$
7,493
$
29,499
Income taxes
$
10,936
$
8,378
$
11,112
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING TRANSACTIONS—Acquisition of fixed assets with a corresponding increase in accounts
payable
$
1,270
$
598
$
1,049
See notes to consolidated financial statements.
F-8
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of business
—Isola Group, S.a.r.l. (the "Company") is a holding company incorporated in Luxembourg whose subsidiaries manufacture and sell laminate products
across Europe, Asia, and the United States of America. Corporate headquarters are located in Chandler, Arizona. The Company is a wholly owned subsidiary of TPG Hattrick Partners, L.P. ("TPG" or
the "sole stockholder").
The
Company and certain of its subsidiaries were incorporated by TPG. TPG is a U.S. based limited partnership that was originally funded through the cash investments of two private equity funds
affiliated with TPG and Redfern Partners, which is an affiliate of Insulectro, one of the Company's largest customers (see Note 13).
Reorganization
—On September 20, 2011, TPG formed a new company, Isola Group Ltd., in the Cayman Islands. Isola Group Ltd. has been authorized
by its board of directors to file a registration statement with the Securities and Exchange Commission ("SEC") permitting it to sell its ordinary shares in an initial public offering ("IPO").
Prior to the IPO the Company will undergo a corporate reorganization that will include the following steps:
–>
all
of the outstanding securities of the Company, including common shares and convertible preferred certificates, will be contributed by TPG to Isola
Group Ltd., which will result in Isola Group Ltd. becoming our new holding company and the Company becoming a subsidiary of Isola Group Ltd.;
–>
TPG
, and TPG's general partner, TPG Hattrick Holdco, LLC, will be liquidated and the ordinary shares of Isola Group Ltd. will be distributed to their
investors; and
–>
all
outstanding stock based awards associated with TPG will be terminated and replaced with new awards for ordinary shares of Isola Group Ltd. that have the
same value and substantially the same terms.
Collectively
we refer to the above transactions as the "Reorganization." The pro forma impact of the Reorganization is discussed further in Note 16 to the consolidated financial statements.
Basis of Presentation and Consolidation
—The consolidated financial statements consist of the accounts of the Company and subsidiaries and reflect the Company's
financial position as of January 1, 2011 and December 26, 2009, and results of operations and cash flows for the fiscal years ended January 1, 2011, December 26, 2009, and
December 27, 2008. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). All intercompany balances and
transactions have been eliminated.
The
Company operates and reports financial results on a fiscal year of 52 or 53 weeks. The 2010 fiscal year consisted of 53 weeks and ended on January 1, 2011. The 2009 and 2008
fiscal years consisted of 52 weeks and ended on December 26, 2009 and December 27, 2008, respectively.
Events
that occurred after January 1, 2011 and through September 23, 2011, the date the financial statements were available to be issued, were considered in the preparation of these
financial statements.
Use of Estimates and Assumptions
—The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting year. Significant items subject to such
F-9
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
estimates
and assumptions include, but are not limited to, the useful lives of fixed assets and definite lived intangible assets, allowances for doubtful accounts, the valuation of derivative
instruments, the valuation of deferred tax assets, the initial and recurring valuation of certain assets acquired through business combinations (including goodwill and indefinite lived intangible
assets), stock-based compensation, reserves for employee benefit obligations, income tax uncertainties and other
contingencies. Actual results could differ from these estimates under different assumptions or conditions.
Foreign Currency Transactions and Translation
—The Company's functional currency and reporting currency is the U.S. dollar. Gains and losses from foreign currency
transactions are included in the consolidated statement of operations in the period they occur. Foreign currency transaction gains and losses, unrealized translation gains and losses associated with
certain foreign subsidiaries with a U.S. dollar functional currency that maintain their books of record in a currency other than the U.S. dollar and unrealized translation gains and losses on
short-term intercompany and operating receivables and payables denominated in a currency other than the functional currency are included in foreign exchange gains and losses in the
consolidated statements of operations.
For
the purposes of presenting consolidated financial statements, the assets and liabilities of the Company's foreign operations where the local currency is also the functional currency are translated
into U.S. dollars using exchange rates prevailing at the end of each reporting period. Revenue and expense items are translated at the average exchange rates for the period. Exchange differences
arising, if any, are recognized as foreign currency translation gains and losses in other comprehensive loss on the consolidated balance sheet.
Cash Equivalents and Restricted Cash
—The Company considers all highly liquid debt investments with a maturity of three months or less when purchased to be cash
equivalents. These investments are stated at cost, which approximates market value. Restricted cash represents bank balances pledged as collateral, primarily for an entrustment loan held by the
Company's subsidiary in Dalian, China. The loan is denominated in Chinese Renminbi.
Accounts Receivable
—The Company's accounts receivable are recorded at cost on the balance sheet, net of allowances. Credit is extended based on an evaluation of the
customer's financial condition and, generally, collateral is not required. Credit risk associated with the Company's accounts receivable is mitigated by ongoing credit evaluations of customers and
frequent contact with customers, especially the most significant, which enables the Company to monitor changes in its customers' business operations and respond accordingly. The Company estimates
credit risk associated with accounts receivable by analyzing the creditworthiness of its customers based on past experience, changes in customer demand, as well as the general economy and the industry
as a whole.
Allowance for Doubtful Accounts
—The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In
establishing the required
allowance, management considers historical losses, current receivables aging, general and specific economic conditions, and local market conditions. The Company reviews its allowance for doubtful
accounts monthly. Past due balances meeting certain criteria are reviewed individually for collectability. All other balances are reviewed on a pooled basis. Account balances are charged off against
the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
The
Company does not have any off-balance-sheet credit exposure related to its customers.
F-10
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
Inventories
—Inventories include the cost of materials, direct labor, and related manufacturing overhead and are stated at the lower of cost (computed using the
first-in, first-out method) or market. The Company adjusts inventory for estimated obsolescence or excess quantities based upon assumptions about future demand and market
conditions.
Property, Plant, and Equipment
—Property, plant, and equipment obtained through acquisitions are recorded at fair value. All other property, plant, and equipment
acquisitions are recorded at cost. Provisions for depreciation are calculated using the straight-line method over the following estimated useful lives of the assets:
Years
Buildings and improvements
15–40
Machinery and equipment
2–15
Assets held under capital leases are depreciated over their expected useful lives on the same basis as owned assets. If there is not reasonable certainty that
the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the lease term or its estimated useful life. Leasehold improvements are depreciated over
the estimated useful life of the related asset, or over the term of the lease, whichever is shorter.
Assets Held for Sale
—In accordance with Accounting Standards Codification ("ASC") 360,
Property, Plant, and
Equipment
("ASC 360"), the Company classifies assets and liabilities as held for sale when management, having the authority to approve the action, commits to a plan to
sell the asset, the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, an active program to locate a buyer and
other actions required to complete the plan to sell the asset have been initiated, the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed
sale within one year. The carrying value of the assets held for sale are then recorded at the lower of their carrying value or fair value, less costs to sell. The Company did not have any assets
classified as held for sale as of January 1, 2011. Net assets held for sale as of December 26, 2009, consist of land and buildings in Tao Yuan, Taiwan, which total $3.7 million
and are included in debt issuance costs and other assets in the consolidated balance sheet.
Long-lived Assets
—The Company reviews long-lived assets such as property, plant, and equipment, and acquired intangible assets subject to
amortization for impairment whenever events and circumstances indicate that the carrying amount may not be recoverable. In performing the review for recoverability, the Company estimates the future
undiscounted cash flows expected to result from the use of the assets and their eventual disposition, in accordance with ASC 360. If an asset were deemed impaired, the amount of the impairment
loss would be calculated based on the excess of the carrying amount of the asset over the estimated fair value. Fair value is determined through various valuation techniques including discounted cash
flow models, market comparables and other information, as considered necessary. Impairment losses are recorded to expense in the period in which they are identified. During fiscal years 2009 and 2008,
the Company recorded $4.1 million and $3.3 million, respectively, in asset impairments associated with the closure of manufacturing facilities, which are included in the consolidated
statement of operations in restructuring. The estimation of future cash flows requires significant estimates of factors that include future sales growth and gross margin performance. If the Company's
sales growth, gross margin performance or other estimated operating results are not achieved at or above their forecasted level, the
F-11
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
carrying
value of asset groups may prove to be unrecoverable and the Company may incur impairment charges in the future.
Intangible
assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense for the fiscal years ended January 1, 2011, December 26,
2009, and December 27, 2008, was $1.3 million, $1.6 million, and $1.9 million, respectively.
Goodwill and Other Intangible Assets
—The Company accounts for goodwill and other intangible assets with indefinite lives in accordance with ASC 350,
Goodwill and Other
Intangible Assets
("ASC 350"). Goodwill represents the excess of the purchase price over the fair value of the net tangible
and identifiable intangible assets acquired in a business combination and is not subject to amortization. ASC 350 requires that goodwill be tested for impairment at least annually, or more
often if warranted by events and changes in circumstances indicating that the carrying value may exceed its fair value, and written down to fair value if impaired. The Company's testing approach
utilized a discounted cash flow analysis and comparative market multiples to determine each reporting unit's fair value for comparison to its carrying value. As the Company's carrying value exceeded
its estimated fair value as of December 27, 2008, the Company applied the approach prescribed in ASC 350-20 for determining the impairment amount. The results of
ASC 350 impairment testing in 2008 indicated that the Company's goodwill balance was impaired and as a consequence, the Company reduced its goodwill balance by $8.5 million. The noncash
charge of $8.5 million was due primarily to a reduction in business related to the general decline of the global economy. The carrying value of goodwill was zero thereafter.
Debt Issuance Costs and Discounts
—Debt issuance costs and discounts are capitalized and amortized over the term of the related debt using the effective interest
method. Upon the extinguishment of the related debt, any unamortized debt issuance costs and discounts are immediately expensed. Unamortized debt issuance costs were $18.3 million and
$3.7 million at January 1, 2011 and December 26, 2009, respectively, and are included in other assets in the consolidated balance sheets. In fiscal 2010 and 2008, the Company
wrote off $2.8 million and $4.2 million of previously recorded deferred financing costs, respectively. Amortization of debt discounts are further discussed in Note 4.
Fair Value Measurements
—The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the
financial statements on a recurring or nonrecurring basis. Fair value is defined as the amount that would be received from selling an asset or the amount that would be paid to settle a liability in an
orderly transaction between willing market participants in the primary or most advantageous market for that asset or liability.
The
Company's financial instruments that are recognized and disclosed at fair value on a recurring basis are comprised primarily of derivative instruments, which include interest rate swaps and
embedded derivative instruments. The Company accounts for derivative instruments in accordance with the provisions of ASC 815,
Derivative Instruments and Hedging
Activities
("ASC 815"). ASC 815 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in
other contracts and hedging activities. ASC 815 requires the Company to record derivatives at their fair value on the balance sheet. At January 1, 2011 and December 26, 2009, the
Company had embedded derivatives in its Convertible Preferred Certificates (see Note 5) and in its senior secured credit agreement and mezzanine credit agreement (see Note 4). Changes in
the fair value of these embedded derivatives are recorded in the consolidated statements of operations.
F-12
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
Certain
nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis, including property, plant, and equipment, goodwill, and intangibles assets. These assets are not
measured at fair value on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. A description of the valuation
methodologies used for assets and liabilities measured at fair value, including the general classification of such assets and liabilities pursuant to the valuation hierarchy, is included in each
footnote with fair value measurement present.
The
Company's principal financial instruments are cash, trade receivables, bank lines of credit, short-term bank debt, trade payables and other accrued liabilities,
long-term debt, including convertible preferred certificates, and derivative instruments. With the exception of the Company's derivative instruments, which are recorded at fair value, and
the Company's long-term debt and convertible preferred certificates, the carrying value of these financial instruments approximates fair value either because of the short maturities of
these instruments, or because the interest rates are based upon variable reference rates.
The
fair value of the Company's long-term debt is computed based upon interest rates of similar debt instruments. The Company engaged a third-party consultant to assist in the
determination of the estimated fair value of the Company's long-term debt and Convertible Preferred Certificates. As the Company was in default with respect to its debt as of
December 26, 2009, it was impractical to estimate its fair value at that time. See Note 5, Convertible Preferred Certificates, for a further discussion regarding the Company's process
for estimating fair value with respect to the Convertible Preferred Certificates. The carrying amount and the fair value of the Company's long-term debt and convertible preferred
certificates are as follows (in millions):
January 1, 2011
December 26, 2009
Long-term debt:
Carrying amount
$
292.1
Fair value
$
331.8
Convertible preferred certificates:
Carrying amount
$
199.1
$
176.6
Fair value
$
161.2
$
82.3
Accounting for Income Taxes
—The Company accounts for income taxes under the asset and liability method under ASC 740,
Income
Taxes
("ASC 740"), which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in
the financial statements. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are
measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company is required to adjust its deferred tax assets and liabilities
in the period when tax rates or the provisions of the income tax laws are enacted.
Deferred
tax assets are recorded to the extent these assets are more likely than not to be realized. In making such determination, the Company considers all available positive and negative evidence,
including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies
F-13
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
and
recent financial operations. Valuation allowances are recognized to reduce deferred tax assets if it is determined to be more likely than not that all or some of the potential deferred assets will
not be realized.
The
Company follows ASC 740-10,
Income Taxes
("ASC 740-10"), which clarifies the accounting for uncertainty in
income taxes recognized in the financial statements. ASC 740-10 provides that a tax benefit from an uncertain tax position may be recognized based on the technical merits when it is
more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes. Income tax positions must meet a more likely than not
recognition threshold at the effective date to be recognized upon the adoption of ASC 740-10 and in subsequent periods. This standard also provides guidance on measurement,
derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
The
Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense.
Pension Plans
—The Company sponsors several pension plans that include qualified, noncontributory nonunion pension plans for certain salaried and hourly employees,
and bargaining unit pension plans covering retirees and vested former employees of the Company. The Company uses a December 31 measurement date for its pension and other postretirement employee
benefit plans. The U.S. pension plans were frozen and curtailed prior to the 2004 acquisition of the Company.
Revenue Recognition
—Revenue is recognized and earned when all of the following criteria are satisfied: (a) persuasive evidence of a sales arrangement exists;
(b) price is fixed or determinable; (c) collectibility is reasonably assured; and (d) title and the risks and rewards of ownership have substantially transferred to the customer.
For a majority of the Company's sales transactions, revenue is recognized upon shipment of the finished product. Some shipping terms require the goods to be received by the customer before title
passes. In those instances, revenues are not recognized until the customer has received the goods. The Company's sales arrangements do not provide for post-shipment obligations.
Shipping and Handling Costs
—The Company classifies shipping and handling costs as a part of cost of goods sold. Amounts billed to customers for shipping and
handling costs are included in revenues.
Certain Risks and Concentrations
—Cash is maintained with several financial institutions. Deposits held with banks can exceed the amount of insurance provided on
such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear minimal credit risk. The Company maintains
its primary cash accounts with established banking institutions around the world. The Company estimates that approximately $25.4 million of these deposits were not insured by the Federal
Deposit Insurance Corporation or similar entities outside of the United States as of January 1, 2011.
The
Company sells a significant amount of its products through intermediaries, such as distributors. Revenue from sales to distributors represented 10.4%, 10.1%, and 9.9% of total revenues for the
fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008, respectively. If one of the Company's significant distributors terminates its distribution agreement,
the Company could experience a significant interruption in the distribution of its products.
Concentration
of credit risk with respect to the Company's trade receivables is limited by an ongoing credit evaluation process and the geographical dispersion of sales transactions. Collateral is
generally not required
F-14
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
from
the Company's customers. The allowance for doubtful accounts is based upon the expected collectability of all trade receivables. The Company had two customers that accounted for 27.6% of the
outstanding receivables at January 1, 2011, and two customers that accounted for 28.8% of the outstanding trade receivables at December 26, 2009. The Company also had one customer that
accounted for 12.8%, 11.9%, and 14.9% of revenues for the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008, respectively.
Contingencies
—The Company is subject to a range of claims, lawsuits and administrative proceedings that arise in the ordinary course of business. The Company
accrues a liability and charges expense on the statement of operations for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated, in accordance
with the recognition criteria of ASC Topic 450,
Contingencies
("ASC 450"). Estimating liabilities and costs associated with these
matters requires significant judgment and assessment based upon the professional knowledge and experience of management and its legal counsel.
Stock-based Compensation
—Effective January 1, 2006, the Company adopted the fair value method of accounting for stock-based compensation to employees in
accordance with ASC 718,
Compensation—Stock Compensation
("ASC 718"). Under the fair value recognition provisions of
ASC 718, the Company recognizes stock-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award. The fair value method requires companies
to estimate the fair value of stock-based payment awards on the grant date using an option pricing model. The Company adopted the fair value method using the prospective method which requires
nonpublic entities that used the minimum value method for either pro forma or financial statement recognition purposes to apply the fair value method to stock-based awards issued on and after the date
of adoption. Prior to the adoption of the fair value method, the Company accounted for stock-based compensation using the minimum-value method for financial statement recognition purposes. For awards
that have not yet vested but were granted prior to the adoption of the fair value method, the Company continues to recognize stock-based compensation expense under the minimum value method. In
addition, the Company continues to amortize any stock-based compensation from awards granted prior to January 1, 2006 and stock-based compensation from awards granted or modified after
January 1, 2006 on a straight-line basis over the service period. The Company has elected to use the "with and without" approach in determining the order in which tax attributes are
utilized. As a result, the Company will only recognize a tax benefit from stock-based awards in additional paid-in capital if an incremental tax benefit is realized after all other tax
attributes currently available to the Company have been utilized. For the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008, the Company incurred
stock-based compensation expense of $2.2 million, $1.8 million, and $1.2 million, respectively. The Company's stock-based compensation awards are more fully described in
Note 9.
Accumulated Other Comprehensive Loss
—As of January 1, 2011, the Company's accumulated other comprehensive loss consisted of a cumulative foreign currency
translation loss of $12.2 million, a cumulative loss related to foreign currency impact from changes in uncertain tax positions of $0.9 million, and a cumulative loss from unamortized
benefit plan costs of $20.5 million, which is net of tax effect of $0.4 million. As of December 26, 2009, the Company's accumulated other comprehensive loss consisted of a
cumulative foreign currency translation loss of $14.0 million, a cumulative loss related to foreign currency impact from changes in uncertain tax positions of $0.9 million, and a
cumulative loss from unamortized benefit plan costs of $11.9 million, which is net of tax effect of $0.3 million.
F-15
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
Recent Accounting Pronouncements
—Changes to generally accepted accounting principles are established by the Financial Accounting Standards Board ("FASB") in the
form of accounting standards updates ("ASU") to the FASB's Accounting Standards Codification.
The
Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or not expected to have an immaterial impact on the
Company's consolidated financial position and results of operations.
In
January 2010, the FASB issued ASU No. 2010-06,
Fair Value Measurements and Disclosures (Topic 820)—Improving Disclosures About Fair
Value Measurements
("ASU 2010-06"). ASU 2010-06 requires new disclosures regarding significant transfers in and out of Levels 1 and
2, as well as information about activity in Level 3 fair value measurements, including presenting information about purchases, sales, issuances and settlements on a gross versus a net basis in
the Level 3 activity roll forward. In addition, ASU 2010-06 clarifies existing disclosures regarding input and valuation techniques, as well as the level of disaggregation
for each class of assets and liabilities. ASU No. 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the disclosures pertaining
to purchases, sales, issuances and settlements in the roll forward of Level 3 activity; those disclosures are effective for interim and annual periods beginning after December 15, 2010.
The adoption of ASU 2010-06 in fiscal 2010 did not have a material impact on the Company's consolidated financial position, results of operations, or cash flows.
Standards Issued but Not Yet Effective
—Other new pronouncements issued but not effective until after January 1, 2011 are not expected to have a material
impact on the Company's consolidated financial statements.
F-16
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
2. SELECTED CONSOLIDATED BALANCE SHEET DISCLOSURES
The following tables provide details of selected consolidated balance sheet items at January 1, 2011 and December 26, 2009 (in
millions):
January 1,
2011
December 26,
2009
Inventories:
Raw materials
$
24.5
$
13.5
Work in process
6.7
5.4
Finished goods
13.9
17.7
Total inventories
$
45.1
$
36.6
Property, plant, and equipment:
Land
$
28.8
$
29.6
Buildings and improvements
49.8
51.0
Machinery and equipment
143.8
137.2
Construction in progress
8.6
2.4
Total property, plant, and equipment
231.0
220.2
Less accumulated depreciation
91.4
77.3
Total property, plant, and equipment—net
$
139.6
$
142.9
Accrued liabilities:
Personnel related
$
15.5
$
14.3
Operating expenses
11.4
14.0
Tax
9.7
7.2
Management fees
1.0
2.0
Interest
0.5
44.7
Restructuring
0.2
0.4
Other
0.7
0.2
Total accrued liabilities
$
39.0
$
82.8
The Company capitalized interest expense incurred during the construction period for capital projects, primarily new machinery and equipment. Capitalized
interest was $0.8 million and $0.3 million for the fiscal years ended January 1, 2011 and December 26, 2009, respectively. Capitalized interest is included in property,
plant, and equipment in the consolidated balance sheets.
Depreciation
expense for the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008, was approximately $15.6 million, $18.2 million, and
$21.9 million, respectively.
F-17
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
3. INTANGIBLE ASSETS
Intangible assets consist of the following (in millions):
January 1, 2011
Weighted
average
estimated
useful life
Gross
amount
Accumulated
amortization
Net
amount
Patented Technology
10 years
$
9.9
$
(5.0
)
$
4.9
Customer Relationship
11 years
6.9
(4.7
)
2.2
Trade Name
11 years
0.9
(0.6
)
0.3
$
17.7
$
(10.3
)
$
7.4
December 26, 2009
Weighted
average
estimated
useful life
Gross
amount
Accumulated
amortization
Net
amount
Patented Technology
10 years
$
9.9
$
(4.1
)
$
5.8
Customer Relationship
11 years
6.9
(4.4
)
2.5
Trade Name
11 years
0.9
(0.5
)
0.4
$
17.7
$
(9.0
)
$
8.7
The following is an expected amortization schedule for the intangible assets for fiscal year 2011 through fiscal year 2015 (in millions):
Fiscal years ending
2011
$
1.2
2012
1.2
2013
1.2
2014
1.2
2015
0.8
Amortization expense attributed to intangible assets was $1.3 million, $1.6 million, and $1.9 million for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008, respectively. Amortization is included in sales, general, and administrative expense on the consolidated statements of
operations. The Company found no indication of impairment of its intangible assets in fiscal years 2010, 2009, or 2008.
F-18
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
4. DEBT
Debt at January 1, 2011 and December 26, 2009 consists of the following (in millions):
January 1,
2011
December 26,
2009
Senior notes payable under senior secured credit agreement—secured, related party—net of unamortized discount of $27.5 million
$
182.5
$
—
Subordinated notes payable under mezzanine credit agreement—unsecured, related party—net of unamortized discount of
$69.0 million
109.6
First-lien credit facility—term loan
169.1
First-lien credit facility—line of credit
31.9
Second-lien credit facility—term loan
95.0
Other debt—unsecured
15.6
15.3
Entrustment loan
5.5
5.3
Total debt outstanding
313.2
316.6
Current portion of long-term debt
(21.1
)
(316.6
)
Total long-term debt
$
292.1
$
—
The Company is required to make debt service payments under the terms of its debt arrangements. The obligated debt principal payments for 2011 are
$21.1 million. Future obligated debt principal payments are $210.0 million in 2015 and $178.6 million in 2016.
In
December 2006, the Company's subsidiary, Isola USA Corp., entered into two credit facilities for an aggregate amount of $325.0 million, which consisted of two term notes and a revolving line
of credit. The credit agreements were co-arranged through UBS Securities LLC and Goldman Sachs Credit Partners L.P.
The
first-lien credit facility was for an aggregate amount of $230.0 million, which consisted of a $190.0 million term loan and a $40.0 million revolving line of credit. There was
an outstanding balance of $169.1 million against the term loan as of December 26, 2009. The loan was for a period of six years and called for quarterly principal payments of
$0.5 million unless prepayments were made to reduce such scheduled payments. The Company was obligated to make prepayments against the note for 75% of annual excess cash flow as defined in the
agreement. No payments were made in fiscal 2009 due to the event of default, which is discussed more fully later in this footnote.
The
Company made elections as to the interest period term which could be one, two, three, or six months (or, if each affected lender so agreed, nine or 12 months) and interest rates varied
based upon the loan type, which were defined as a Eurodollar (LIBOR) Loan or an Alternate Base Rate (ABR) Loan. The rates were also dependent upon the leverage ratio of the Company.
Effective
August 2008, the Company amended the first-lien credit facility due to the fact that the Company exceeded the maximum leverage ratio covenant of the first-lien credit facility. The principal
changes embodied in the amendment included increases to the interest spreads over LIBOR/ABR retroactive to June 30, 2008. Also amended was the maximum total leverage ratio covenant, which was
increased for three fiscal quarters and then reverted to the original ratios. Included in the amendment were additional covenants requiring mandatory repayments of $6.25 million on
September 30, 2008, and again on
F-19
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
December 31,
2008, and payment of amendment fees in August 2008 equivalent to 1% of the outstanding indebtedness under the agreements to the consenting lenders. In accordance with the amended
first-lien, as of December 26, 2009, the notes were accruing interest at the rate of 13.0%, which was equal to ABR plus 9.75%.
At
December 26, 2009, $31.9 million of the $40.0 million first-lien credit facility revolving line of credit was outstanding, which is included in short-term debt and
current portion long-term debt on the consolidated balance sheet. The borrowings against the line of credit had an interest period of six months from the date of borrowing after which the
Company could elect to extend the borrowing for an interest period term of one, two, three, or six months (or, if each affected lender so agreed, nine or 12 months), and interest rates varied
based upon the loan type, which was defined as LIBOR or ABR. The rates were also dependent upon the leverage ratio of the Company. As of December 26, 2009, the outstanding revolving borrowings
were accruing interest at the rate of 12.25%, which was equal to ABR plus 9.0%. Approximately $0.1 million of the revolving line of credit was utilized for outstanding letters of credit as of
December 26, 2009. The balance of the revolving line of credit was unavailable for use by the Company as of December 26, 2009, due to an event of default on the first-lien, which is
described below.
The
second-lien credit facility was a term loan for an aggregate amount of $95.0 million. As of December 26, 2009, there was an outstanding balance of $95.0 million against the
note. The note was for a period of seven years and was subordinated to the first-lien loans. The Company made elections as to the interest period term which could be one, two, three, or six months
(or, if each affected lender so agreed, nine or 12 months) and interest rates varied based upon the loan type, which was defined as a LIBOR or an ABR Loan.
Effective
August 2008, the Company amended the second-lien credit facility due to the fact that the Company exceeded the maximum leverage ratio covenant of the second-lien credit facility. The
principal changes embodied in the amendment included increases to the interest spreads over LIBOR/ABR retroactive to June 30, 2008. Also amended was the maximum total leverage covenant, which
was increased for three fiscal quarters and then reverted to the original ratios. In accordance with the second-lien credit amendment, as of December 26, 2009, the loan was accruing interest at
the rate of 17.75%, which was equal to ABR plus 14.5%.
Both
the first- and second-lien credit facilities, as originally issued and as amended, were secured by substantially all of the assets of the Company and were subject to various covenants including
financial covenants relating to (1) maximum leverage ratio (as defined) and (2) limitations on capital expenditures.
In
January 2009, the Company was not in compliance with certain covenants associated with the amended first- and second-lien credit agreements. As a result, the Company entered into a forbearance
agreement with respect to the first-lien credit facility with the relevant financial institutions including UBS AG individually as a lender and as administrative agent for the lenders. The Company
also entered into a forbearance agreement with respect to the second-lien credit facility with the relevant financial institutions including Wilmington Trust FSB in its capacity as administrative
agent for the lenders as successor to Goldman Sachs Credit Partners L.P. In both forbearance agreements, the lenders and the administrative agents agreed to forebear from exercising their
rights and remedies arising from the defaults specified in the forbearance agreements during the forbearance period. Both forbearance agreements required the Company to comply with certain conditions
including the accrual of interest at the "default" interest rates specified in the first- and second-lien credit facilities, as amended. The use of the "default" interest rates
F-20
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
resulted
in an additional 2% charge for interest. This additional 2% is included in the rates disclosed above as of December 26, 2009. As of December 26, 2009, the Company had accrued
interest in the amount of $44.7 million, which is included in accrued liabilities on the consolidated balance sheet. Both forbearance agreements expired in May 2009 and the Company operated in
default of both amended credit agreements until September 30, 2010, when the outstanding term loans under both the first- and second-lien credit facilities were paid in full using proceeds
obtained through new credit agreements as discussed below. The outstanding balance of the first- and second-lien credit agreements are included in short-term debt and current portion of
long-term debt on the consolidated balance sheet at December 26, 2009.
New Credit Arrangements
—On September 30, 2010, the Company entered into a series of financing transactions including a senior secured credit agreement and a
mezzanine credit agreement, each entered into with a syndicate of lenders, the majority of which are partial owners in an entity that is the Company's sole stockholder (collectively "the New Credit
Arrangements"), as well as the issuance of 43,500,666 Class C Convertible Preferred Certificates issued to the Company's sole stockholder (collectively "the Financing Transaction"). The Company
received $376.4 million in aggregate proceeds in connection with the Financing Transaction. The total proceeds were allocated among the instruments issued based upon the relative fair value of
each instrument at the time of issuance, as follows:
As of
September 30,
2010
Senior notes payable
$
181.5
Embedded derivative—senior notes payable
1.1
Subordinated notes payable
104.6
Embedded derivative—subordinated notes payable
8.1
Convertible preferred certificates—Class C (Note 5)
24.8
Embedded derivative—convertible preferred certificates—Class C (Note 5)
56.3
Total allocated value
$
376.4
The borrower under the New Credit Arrangements is the Company's wholly owned subsidiary, Isola USA Corp. The principal terms of each credit arrangement are
described below. The Class C Convertible Preferred Certificates are discussed in Note 5.
Senior Secured Credit Agreement
—The senior secured credit agreement consists of $210.0 million senior notes ("Senior Notes"), the full amount of which was
drawn at closing on September 30, 2010. The proceeds were used to refinance part of the then-existing first-and second-lien credit facilities, as well as to pay other fees and
expenses related to the new Senior Notes. The Senior Notes are secured by a first priority lien on substantially all of the assets of the Company, including a pledge of all of the equity interests of
each domestic subsidiary and 65% of the equity interests of the first-tier foreign subsidiaries. The Company's other secured and unsecured obligations are subordinated in priority to
payment of loans under the senior secured credit agreement.
The
Company makes elections as to the interest period term which can be one, two, three, or six months in length. The Company also makes elections as to the loan type on which the interest is based.
The Company can elect a Eurodollar Loan or an ABR Loan or a combination of the two. Eurodollar Loans accrue interest at a rate of LIBOR (with a minimum base rate of 2.0%) plus 8.0%. Eurodollar loan
interest is payable on
F-21
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
the
last day of the period term elected, provided, in the case of an interest period longer than three months, payments shall be due no more than three months after the commencement of the interest
period term. ABR Loans accrue interest at a base rate plus 7%. The base rate is defined as the greater of the Prime Rate as identified and published in the Wall Street Journal or the Federal Funds
Effective Rate as published by the Federal Reserve Bank of New York, on the date of election plus
1
/
2
of 1%. The base rate is to be a minimum of 3.0%. ABR loan interest is payable
March 31, June 30, September 30, and December 31 of each year. As of January 1, 2011, the Company had elected Eurodollar loans for all Senior Notes, which were
accruing interest at the rate of 10.0%, which is equal to the minimum LIBOR rate of 2.0% plus 8.0%.
The
Senior Notes are due in full on September 30, 2015. Voluntary early payments are allowed but payments made prior to the first anniversary date are required to be made at 102% of the
principal amount and payments made subsequent to the first anniversary date but prior to the second anniversary date are required to be made at 101% of the principal amount. Payments made subsequent
to the second anniversary date shall be made at par value of the outstanding debt. The Company is obligated to make prepayments against the Senior Notes resulting from the following transactions or
events as defined in the Senior Notes agreements:
–>
100%
of proceeds from the sale of assets not reinvested in long-term productive assets within one year of the receipt of the sale proceeds, not to exceed
$5.5 million in any fiscal year;
–>
100%
of net insurance/condemnation proceeds in excess of $0.1 million for any casualty event and in excess of $1.0 million for all casualty events in
any fiscal year which are not reinvested in long-term productive assets or used to repair, restore, or replace the assets subject to the applicable casualty event or events within one year
of the receipt of the net proceeds;
–>
net
proceeds of equity issuances by Isola Group S.a.r.l. in an aggregate amount of 75% of such proceeds provided that if, as of the last day of the most recently
ended fiscal quarter, the senior secured leverage ratio shall be 2.50:1.00 or less but greater than 2.00:1.00, the amount shall be reduced to an aggregate amount equal to 50% of such proceeds, and
provided that if, as of the last day of the most recently ended fiscal quarter, the senior secured leverage ratio shall be 2.00:1.00 or less, the amount shall be reduced to an aggregate amount equal
to 25% of such proceeds;
–>
100%
of net proceeds from the incurrence by Isola Group S.a.r.l. or its subsidiaries of any indebtedness not otherwise permitted by the Senior Note agreements; and
–>
75%
of consolidated excess cash flow, provided, that if, as of the last day of the most recently ended fiscal year, the senior secured leverage ratio shall be
2.00:1.00 or less, the amount shall be reduced to 50% of consolidated excess cash flow.
The
Senior Notes were issued at a discount of $28.5 million on September 30, 2010. As of January 1, 2011, there was $210.0 million of outstanding principal and
$27.5 million of unamortized discount resulting in a net balance of $182.5 million in the consolidated balance sheet.
Mezzanine Credit Agreement
—The mezzanine credit agreement consists of $175.0 million unsecured notes ("Subordinated Notes"), the full amount of which was
drawn at closing on September 30, 2010. The proceeds were used to refinance part of the then-existing first-and second-lien credit facilities, as well as to pay other fees and
expenses related to the new Subordinated Notes. The unsecured term loans issued pursuant to the mezzanine credit agreement are subordinate and junior to the obligations owed under the
F-22
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
senior
secured credit agreement Notes facility. Obligations under the mezzanine credit agreement rank pari passu with the Company's other unsecured and unsubordinated obligations.
The
unsecured term loans under the mezzanine credit agreement bear interest at a rate of 16.0% per annum, with half (8.0% per annum) payable in cash on March 31, June 30,
September 30, and December 31, of each year until maturity and half (8.0% per annum) accreting on the outstanding principal amount of the unsecured term loans, due at maturity. The
Subordinated Notes are due in full on March 24, 2016. Voluntary early payments are allowed subject to the prior discharge of the senior secured credit agreement obligations (except as otherwise
permitted pursuant to the applicable senior secured credit agreement). The Company is obligated to repay the Subordinated Notes in full along with any unpaid interest upon the occurrence of a "Change
in Control", as defined by the mezzanine credit agreement.
The
Subordinated Notes were issued at a discount of $70.4 million on September 30, 2010. As of January 1, 2011, there was $178.6 million of outstanding principal, which
consisted of $175.0 million in
term loans and $3.6 million of accreted interest. The unamortized discount was $69.0 million at January 1, 2011, resulting in a net balance of $109.6 million in the
consolidated balance sheet.
Embedded Derivative Liability
—In accordance with ASC 815, the mandatory pre-payment features of the Senior and Subordinated Notes are considered
embedded derivative liabilities. The values related to the embedded derivative liabilities are recognized at fair value in the consolidated balance sheet at each reporting period. At
September 30, 2010 (issuance date) and January 1, 2011, the determined fair value of the embedded derivative liabilities was $9.2 million and $5.9 million, respectively.
Any change in fair value of the embedded derivative liability is reflected in the consolidated statements of operations. For the fiscal year ended January 1, 2011, the Company's embedded
derivative gain related to the Senior and Subordinated Notes was a combined $3.3 million.
Covenants
—The Company's New Credit Arrangements require it to maintain certain financial and operating covenants. The financial covenants include separate ratios
measuring both interest and secured debt against EBITDA, as defined in the New Credit Arrangements, as well as a limit on capital expenditures. The operating covenants impose limitations on business
decisions, including, but not limited to, the ability to (i) dispose of assets or stock; (ii) incur additional indebtedness and guarantee obligations; (iii) pay certain dividends;
(iv) create liens on assets; (v) make investments, loans or advances; (vi) restrict distributions to the borrowers or guarantors from its subsidiaries; (vii) engage in
mergers or consolidations; (viii) engage in certain transactions with affiliates; (ix) incur additional negative pledges; (x) incur capital expenditures; (xi) change its
fiscal year or accounting practices or the lines of business in which it and its subsidiaries are involved; (xii) enter into sale-leaseback transactions; (xiii) prepay
principal of, premium, or interest on, or redeem, purchase, retire, defease, or create a sinking fund or make a similar payment with respect to, any subordinated indebtedness and certain other debt;
(xiv) change the conduct of business; (xv) conduct activities of any parent holding company or (xvi) amend its organizational documents. The Company was in compliance with these
covenants as of January 1, 2011. The Company was required to file its annual financial statements by April 30, 2011. The Company was not in compliance with this requirement and obtained
a waiver of this covenant through September 30, 2011.
Other Unsecured Debt
—The Company has two unsecured loan agreements from lenders in China that provide for a series of draw-downs as funds are required
at the stated rate ranging from 4.26% to 5.04% per annum. Each draw-down has a one year maturity and is renewable on an annual basis. The Company
F-23
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
made
draws and repayments on these facilities and had combined outstanding balances of $15.1 million and $14.6 million at January 1, 2011 and December 26, 2009,
respectively.
The
Company has an entrustment loan with $5.5 million and $5.3 million outstanding at January 1, 2011 and December 26, 2009, respectively. An entrustment loan is a means
for one subsidiary to loan cash to another subsidiary with a bank acting as the intermediary. This is accomplished by a lending subsidiary depositing cash into a bank (which is shown as restricted
cash on the consolidated balance sheets) and then requesting the bank to on-loan the cash to another subsidiary with the terms being specified by the subsidiary depositing the cash. The
bank charges a minimal processing fee of 0.15% per annum of the outstanding balance to provide the service.
A
subsidiary of the Company has unsecured short-term loan arrangements totaling $0.5 million and $0.7 million, bearing interest at an average interest rate of 1.9% and 1.4%
as of January 1, 2011 and December 26, 2009, respectively.
Several
of the Company's subsidiaries have entered into various lines of credit. These lines of credit provided total availability of $5.4 million and $4.9 million at January 1,
2011 and December 26, 2009, respectively. No balances were outstanding on these lines of credit as of January 1, 2011 and December 26, 2009. $0.6 million was pledged as
guarantees as of both January 1, 2011 and December 26, 2009, leaving total credit available under the lines of $4.8 million and $4.3 million as of January 1, 2011
and December 26, 2009, respectively.
Several
of the Company's subsidiaries have open letters of credit for the benefit of third-party vendors. The total letter of credit availability is $2.1 million at both January 1, 2011
and December 26, 2009, of which $1.1 million and $1.2 million has been committed as of January 1, 2011 and December 26, 2009, respectively. The letters of credit
expire at various dates.
5. CONVERTIBLE PREFERRED CERTIFICATES
The Company has issued and outstanding three different classes of Convertible Preferred Certificates ("CPCs") as of January 1, 2011. The CPCs
have characteristics of both debt and equity, but are considered to be legal form debt instruments in Luxembourg, and thus are accounted for as debt. For each of the years ended December 26,
2009 and December 27, 2008, the Company had 420,455 and 95,788,400, respectively, Class A and B CPCs authorized, issued and outstanding.
On
September 30, 2010, the Company entered into the Financing Transaction consisting of the issuance of 43,500,666 Class C CPCs, and the New Credit Arrangements (see Note 4). The
Company received gross proceeds of $376.4 million in connection the financing transactions which have been allocated among the instruments issued based upon the relative fair value of each at
the time of issuance. In preparing the 2010 consolidated financial statements, the Company determined that historic valuations
for the Class A and B contingent conversion feature discussed below did not appropriately consider the rights and preferences of the various instruments comprising the Company's capital
structure. Accordingly, during 2011, the Company engaged a third-party consultant to assist in the determination of the estimated fair value of the Class C CPCs and to perform retrospective
valuations with respect to the Class A and B CPCs, to assist in the determination of the fair value of the Class A and B contingent conversion feature. These retrospective valuations
resulted in new estimates of fair value for the Class A and B contingent conversion feature. The revised fair values were utilized to prepare the Company's financial statements for all periods
presented.
F-24
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
In conducting the valuations, the Company used a methodology that is consistent with the methods outlined in the
AICPA Practice Aid Valuation of
Privately-Held-Company Equity Securities Issued as Compensation
. The enterprise value inputs associated with the Company's valuations were derived using
the income and market approaches. The income approach estimates the enterprise value of the Company by discounting the expected future cash flows of the Company to present value. Under the market
approach, the total enterprise value of the Company is estimated by comparing the Company's business to similar businesses whose securities are actively traded in public markets, or businesses that
are involved in a public or private transaction. The Company has selected valuation multiples derived from trading multiples of public companies that participate in the Company's industry. These
valuation multiples were then applied to the equivalent financial metric of the Company's business, giving consideration to differences between the Company and similar companies for such factors as
company size, leverage, and growth prospects.
The
Company prepared financial forecasts to be used in the computation of the enterprise value for the income approach. The financial forecasts took into account the Company's past experience and
future expectations. There is inherent uncertainty in these estimates. The risks associated with achieving the Company's forecasts were assessed in selecting the appropriate discount rates. If
different discount rates had been used, the valuations would have been different.
The
Company then allocated the resulting enterprise value among the instruments that comprise the Company's capital structure based upon rights and preferences of the instruments using the
Option-Pricing Method ("OPM"). Under the OPM, the Company allocated the value of the CPCs and common stock of the Company based on a series of call options, representing the present value of the
expected future returns for each instrument. The value of these options was estimated using the Black-Scholes option pricing model. The assumptions utilized in the model, including assumptions
associated with volatility, were consistent with those selected to value the options to purchase partnership units, as discussed in Note 9, as the Company's operations represent substantially
all of the net assets of the sole stockholder.
The
OPM involves making estimates of the anticipated timing of a potential liquidity event such as a sale of the Company or an initial public offering, and estimates of the volatility of the Company's
equity securities. The anticipated timing is based on the plans of the board and management. Estimating the volatility of the share price of a privately held company is complex because there is no
readily available market for the shares. The Company estimated the volatility of the stock based on available information on volatility of stocks of publicly traded companies in the industry. Had the
Company used different estimates of volatility, the allocations between common stock and CPCs would have been different.
The
43,500,666 certificates of Class C CPCs carry an aggregate par value of 43.5 million Euro. There were no other CPC transactions during the years ended January 1, 2011,
December 26, 2009, and December 27, 2008.
As
of September 30, 2010, $24.8 million of the proceeds received in connection with the September 30, 2010 financing transactions were allocated to the Class C CPCs
resulting in a discount of $34.5 million. As of January 1, 2011, the Company had outstanding Class C CPCs with par amount of 43.5 million Euro ($58.1 million),
including accrued interest of $0.9 million and unamortized discount of $33.8 million, resulting in a carrying balance of $24.3 million in the consolidated balance sheet. During
fiscal 2010, interest expense as a result of the amortization of the Class C CPC discount was immaterial, and loss related to foreign currency translation was $0.5 million. As of
January 1, 2011 and December 26, 2009, the
F-25
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
carrying
value of the Class A and B CPCs, combined, was $174.8 million and $176.6 million, respectively, including accrued interest of $45.7 million and
$38.6 million, respectively.
The
following is a summary of the rights, preferences and terms of the Company's outstanding series of CPCs:
Redemption and Optional Redemption
Class A and Class B CPCs mature on June 2, 2044, and Class C CPCs mature on September 30, 2050. The CPCs are
mandatorily redeemable at these maturity dates at a price equivalent to par plus accrued and unpaid interest (the "Redemption Price"). The Company, within 15 days of a conversion event, as
further discussed below, may elect an earlier redemption of any or all of the CPCs at the greater of the Redemption Price or a formula indexed to the adjusted net asset value of the Company, as
further defined in the CPC agreements (the "Optional Redemption Price"). The Redemption Price of the Class A, B, and C CPCs totaled $232.9 million and $176.6 million as of
January 1, 2011 and December 26, 2009, respectively. The Company may only elect optional redemption to the extent sufficient funds are available subsequent to redemption to satisfy all
of the Company's other obligations, whether senior or pari passu to the CPCs.
Preferred interest
Class A and Class B CPCs carry a par value of one Euro and earn preferred interest based on the six-month EURIBOR plus
4.875% (6.1% and 5.9% as of January 1, 2011 and December 26, 2009, respectively). Class C CPCs carry a par value of one Euro and earn preferred interest based on the
six-month EURIBOR plus 5.0% (6.3% as of
January 1, 2011). The preferred interest is payable upon declaration by the Board of Directors and to the extent the Company possesses sufficient funds. Cumulative preferred interest of
$46.6 million and $38.6 million has been recorded within convertible preferred certificates on the consolidated balance sheets as of January 1, 2011 and December 26, 2009,
respectively.
Liquidation
In the event of liquidation, Class A, B, and C CPCs are redeemable at par value plus any accrued but unpaid interest. In liquidation, the CPCs
rank pari passu among each class, rank senior in priority of payment to the Company's common stock and subordinate to all other obligations. After the payment of the applicable liquidation preference
to the holders of the CPCs, the residual, if any, will be distributed pro rata among the common stockholders.
Voting and dividend rights
The CPCs do not include voting or dividend rights unless converted into common shares.
Contingent conversion feature
The CPC agreements provide both the Company and the holders certain rights to convert some or all of the CPCs into the Company's common shares upon
the occurrence of certain events. A conversion event is defined as "after payment of or provision for other obligations, the Issuer has funds resulting, among others, from (i) dividend payments
made by the subsidiaries or (ii) a sale of one of the subsidiaries by the Issuer to an affiliated or nonaffiliated party or (iii) any recapitalization or refinancing of any TPG Isola
group of
F-26
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
companies."
During a 15-day period subsequent to the occurrence of a conversion event, the Company shall have the right but not the obligation to convert any or all CPCs into common
shares of the Company by requiring the holder to exchange CPCs for shares. Upon expiration of the Company's conversion rights, and for the following 15-day period, each holder shall have
the right (subject to certain limitations) but not the obligation to have any or all of its CPCs converted into common shares of the Company. Any conversions will take place at a price equal to the
conversion price defined in the CPC agreements. The number of common shares into which each CPC is convertible will be determined at the time of conversion as the conversion price is indexed to the
greater of par value plus accrued and unpaid interest or the adjusted net asset value of the Company. Adjusted net asset value is most commonly indexed to the fair value of the Company's net assets
and is therefore, determinable upon the occurrence of a conversion event. As of January 1, 2011, based solely upon the par plus accrued and unpaid interest feature of the conversion price, the
Class A, B, and C CPCs were convertible into 569,151, 129,664,416 and 44,188,874 shares, respectively, of the Company's common stock.
Embedded derivative feature
In accordance with ASC 815,
Accounting for Derivative Instruments and Hedging Activities
, the
conversion features that are included in the CPC agreements and are discussed above are considered an embedded derivative liability. At January 1, 2011 and December 26, 2009, the fair
value of the embedded derivative liability was determined to be $60.5 million and $27.5 million, respectively, which was bifurcated from the CPCs and is stated separately on the
consolidated balance sheets. The value related to the embedded derivative liability is recognized at fair value at each reporting period and any change in fair value is reflected in the consolidated
statements of operations. The initial value of the embedded derivative on September 30, 2010 related to the Class C CPCs was $56.3 million. For the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008, the change in fair value of the embedded derivative liability related to the CPCs resulted in income of
$21.7 million, expense of $27.5 million, and income of $115.4 million, respectively. Management determined the fair value of the embedded derivative with the assistance of a
third-party consultant as described above. While these valuations were prepared beginning in 2005, contemporaneous with the Company's fiscal year-ends through 2010, the Company
subsequently determined the historic valuations did not appropriately consider the rights and preferences of the various instruments comprising the Company's capital structure. Accordingly, during
2011 retrospective valuations were performed as of December 31, 2005, December 30, 2006, December 29, 2007, December 27, 2008, December 26, 2009, March 31,
2010, June 30, 2010, September 25, 2010, October 8, 2010, and January 1, 2011. The retrospective valuations resulted in new estimates of fair value at each respective
period. The revised fair values were utilized to prepare the Company's consolidated financial statements for all periods presented.
6. INTEREST RATE SWAPS
In December 2010, a subsidiary of the Company entered into an interest rate swap with a notional amount of $25.0 million, which expires on
December 31, 2013. The Company did not designate this swap agreement as a hedge and therefore, any change in fair value will be recorded in the consolidated statement of operations as interest
expense. There was no change in fair value for the fiscal year ended January 1, 2011. The Company pays a fixed rate amount of 2.8% per annum and receives a variable rate based on the greater of
2.0% or the three-month LIBOR. Interest incurred or earned from this agreement is settled
F-27
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
quarterly
on the last day of March, June, September, and December and commenced on March 31, 2011. The swap agreement is required under the terms of the Company's Senior Notes agreements, which
require that a minimum of 50.0% of the principal of the Company's aggregate indebtedness bears interest at a fixed rate or is protected by an agreement to provide the same effect.
In
May 2007, a subsidiary entered into two interest rate swaps with a combined notional amount of $14.6 million in order to mitigate the risks associated with fluctuations of the interest rate
on a capital lease contract. One of the swaps expires in June 2012 and bears an interest rate of the three-month EURIBOR plus 0.52%. The Company pays a variable rate based on the three-month EURIBOR
plus 0.52% with a maximum of 5.02% and receives a variable rate based on the three-month EURIBOR. The second swap expires in June 2014 and bears a fixed interest rate of 4.65%. The Company pays a
fixed rate of 4.65% and receives a variable rate based on the three-month EURIBOR. Settlement dates occur quarterly on both swaps. The Company did not designate these swap agreements as hedges and
therefore, any change in fair value is recorded in the consolidated statement of operations as interest expense. The Company recorded $0.1 million in interest income, and $0.1 million
and $0.4 million as interest expense in the consolidated statements of operations for the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008,
respectively. The combined fair value of these interest rate swaps was a liability of $0.6 million and $0.7 million at January 1, 2011 and December 26, 2009, respectively.
In
February 2007, a subsidiary of the Company entered into an interest rate swap with a notional amount of $142.5 million under which the Company paid a fixed rate amount of 5.075% per annum
and received variable quarterly payments based on the three-month LIBOR. The swap was scheduled to expire in March 2010. The Company did not designate this swap agreement as a hedge and therefore, any
change in fair value was recorded in the consolidated statement of operations as interest expense. The Company recorded interest income of $1.5 million in the consolidated statement of
operations for the fiscal year ended December 26, 2009, related to the change in swap fair value. In March 2009, the Company did not make a quarterly settlement payment as required by the
interest rate swap agreement. According to the swap agreement, failure to make the quarterly settlement payment was considered an event of default resulting in a termination of the swap agreement in
April
2009. Accordingly, the resulting liability to settle the swap of $5.6 million was recorded in other current liabilities on the consolidated balance sheet as of December 26, 2009. The
outstanding balance of $5.6 million, along with accrued interest of $1.4 million, was paid on September 30, 2010, pursuant to the new credit agreements discussed above.
In
January 2007, a subsidiary of the Company entered into an interest rate swap with a notional amount of $1.9 million in order to mitigate the risk associated with interest fluctuations on a
$2.9 million loan. The swap was set to expire in December 2011 and bore interest at a fixed rate of 4.4%. Settlement dates occurred quarterly. The Company did not designate this swap agreement
as a hedge and therefore, any change in fair value would ordinarily be recorded in the consolidated statement of operations as interest expense. The subsidiary that entered into this interest rate
swap agreement was treated as a discontinued operation during 2009 and 2008 (see Note 16) and therefore, changes in the fair value of the interest rate swap are included in the results from the
discontinued operations in the consolidated statements of operations. The swap agreement was settled and paid during fiscal 2009.
F-28
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
7. PENSION AND OTHER RETIREMENT BENEFITS
The Company sponsors a number of defined benefit pension plans covering certain U.S. employees as well as certain non-U.S. employees of
certain subsidiaries. A defined benefit plan specifies the amount of benefits a plan participant is to receive. Plans covering U.S. employees provide benefits of stated amounts generally based on
years of service and compensation history. The qualified U.S. plans had been previously frozen and curtailed prior to the original Isola acquisition in 2004, such that no new participants were
admitted into the plans and no additional benefits were accrued for participants already in the plans. Employees do not contribute to the plans.
In
addition, the Company sponsors a Supplemental Employee Retirement Plan ("SERP"), which covers certain officers and highly compensated employees of the Company designated for participation by the
plan document. In order to comply with changes required by Section 409A of the Internal Revenue Code of 1986, effective January 1, 2008, the Company amended the SERP to require that
retirement benefits be paid in a single lump sum within 30 days following the participant's separation from service. Benefits for previously terminated employees were paid in January 2009.
Also, effective February 1, 2009, participants of the SERP no longer accrue additional benefits. Benefits accrued through February 1, 2009 were not impacted.
The
Company also provides postretirement benefits for certain employees of the Company and its subsidiaries, which include medical and life insurance. For the medical insurance plans, retirees make
contributions to cover a portion of the plan costs. Effective March 1, 2009, the Company amended the medical insurance plan to increase the portion of the premiums paid by the retirees to 100%.
This change took effect during 2009, but was prospectively accounted for during 2008 as a plan amendment. The plan is not eligible for the government subsidy under the
Medicare
Prescription Drug, Improvement and Modernization Act of 2003
(the "Act") and the Company does not recognize any reduction in the benefit obligation. The medical insurance
benefits are paid as incurred. For the life insurance plan, retirees do not make contributions. The Company retains the right to change or eliminate these benefits.
F-29
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
The
components of net periodic benefit cost for the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008, are shown in the table below (in millions):
Pension benefits
U.S.
plans
Non-U.S.
plans
Other
benefits
For year ended January 1, 2011:
Service cost
$
0.3
$
0.6
$
—
Interest cost
4.4
0.8
0.1
Past service
(0.4
)
Amortization of net (gain) / loss
0.8
0.1
(0.1
)
Expected return on plan assets
(3.9
)
(0.3
)
Net periodic (benefit) / cost
$
1.6
$
1.2
$
(0.4
)
For year ended December 26, 2009:
Service cost
$
0.3
$
0.6
$
—
Interest cost
4.4
0.7
0.1
Past service
(0.4
)
Amortization of net (gain) / loss
1.5
(0.1
)
(0.1
)
Expected return on plan assets
(3.2
)
(0.4
)
0.0
Settlement / curtailment
0.2
0.4
Net periodic (benefit) / cost
$
3.2
$
1.2
$
(0.4
)
For year ended December 27, 2008:
Service cost
$
0.2
$
0.7
$
—
Interest cost
4.4
0.7
0.4
Past service
(0.1
)
Amortization of net (gain) / loss
Expected return on plan assets
(4.7
)
(0.3
)
Net periodic (benefit) / cost
$
(0.1
)
$
1.1
$
0.3
The estimated net actuarial loss, prior service benefit, and transition asset for the defined benefit pension plans that will be amortized from other
comprehensive loss into net periodic benefit cost over the next fiscal year is $1.5 million, $0, and $0.1 million, respectively. The estimated net actuarial gain and prior service
benefit for the defined benefit postretirement plans that will be amortized from other comprehensive loss into net periodic benefit cost over the next fiscal year is $0 and $0.4 million,
respectively.
F-30
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
The following table provides details of the changes in benefit obligations for the fiscal years ended January 1, 2011 and December 26, 2009 (in millions):
Pension benefits
U.S.
plans
Non-U.S.
plans
Other
benefits
Benefit obligation—December 27, 2008
$
75.0
$
15.2
$
1.6
Service cost
0.3
0.6
Interest cost
4.4
0.7
0.1
Actuarial loss
1.3
3.6
0.1
Settlement/Curtailment
(0.1
)
Benefits paid
(4.9
)
(1.6
)
(0.3
)
Currency translation adjustments
0.5
Benefit obligation—December 26, 2009
76.0
19.0
1.5
Service cost
0.3
0.6
Interest cost
4.4
0.8
0.1
Actuarial loss
7.6
2.4
0.1
Benefits paid
(4.1
)
(0.7
)
(0.1
)
Currency translation adjustments
0.2
Benefit obligation—January 1, 2011
$
84.2
$
22.3
$
1.6
The following table provides details of the changes in fair value of the plan assets for the fiscal years ended January 1, 2011 and December 26,
2009 (in millions):
Pension benefits
U.S.
plans
Non-U.S.
plans
Other
benefits
Fair value of plan assets—December 27, 2008
$
43.6
$
7.7
$
—
Actual return on plan assets
11.6
1.0
Employer contributions
2.8
0.4
0.3
Benefit payments
(4.9
)
(1.6
)
(0.3
)
Currency translation adjustments
0.4
Fair value of plan assets—December 26, 2009
53.1
7.9
Actual return on plan assets
4.8
0.8
Employer contributions
2.9
0.5
0.1
Benefit payments
(4.1
)
(0.7
)
(0.1
)
Currency translation adjustments
0.1
Fair value of plan assets—January 1, 2011
$
56.7
$
8.6
$
—
F-31
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
As of January 1, 2011 and December 26, 2009, the following table provides a reconciliation of the funded status of the plans to the amounts
recognized on the consolidated balance sheets (in millions):
Pension benefits
U.S. plans
Non-U.S. plans
Other benefits
January 1,
2011
December 26,
2009
January 1,
2011
December 26,
2009
January 1,
2011
December 26,
2009
Funded status, current liability
$
—
$
—
$
(0.3
)
$
(0.2
)
$
(0.2
)
$
(0.2
)
Funded status, noncurrent liability
(27.6
)
(22.9
)
(13.5
)
(10.9
)
(1.4
)
(1.3
)
Funded status, noncurrent asset
Unrecognized actuarial loss / (gain)
23.0
17.0
4.7
2.6
(0.9
)
(1.1
)
Unrecognized transition
(0.2
)
(0.2
)
0.0
Prior service credit
(5.7
)
(6.1
)
Accrued pension cost
(4.6
)
(5.9
)
(9.3
)
(8.7
)
(8.2
)
(8.7
)
Net amount recognized in accumulated other comprehensive loss
(23.0
)
(17.0
)
(4.5
)
(2.4
)
6.6
7.2
Net amount recognized
$
(27.6
)
$
(22.9
)
$
(13.8
)
$
(11.1
)
$
(1.6
)
$
(1.5
)
The following table presents amounts for pension plans with accumulated benefit obligations in excess of fair value of plan assets (in millions):
January 1, 2011
December 26, 2009
Projected benefit obligation
$
106.6
$
95.0
Accumulated benefit obligations
104.8
93.8
Fair value of plan assets
65.3
61.0
F-32
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
The following table provides details regarding the amounts recognized in consolidated accumulated other comprehensive loss:
Pension benefits
U.S.
plans
Non-U.S.
plans
Other
benefits
Total
As of January 1, 2011:
Unrecognized actuarial (gain) / loss
$
23.0
$
4.7
$
(0.9
)
$
26.8
Unrecognized past service cost / (credit)
(5.7
)
(5.7
)
Unrecognized net transition asset or obligation
(0.2
)
(0.2
)
Net amount recognized in accumulated other comprehensive loss
$
23.0
$
4.5
$
(6.6
)
$
20.9
As of December 26, 2009:
Unrecognized actuarial (gain) / loss
$
17.0
$
2.6
$
(1.1
)
$
18.5
Unrecognized past service cost / (credit)
(6.1
)
(6.1
)
Unrecognized net transition asset or obligation
(0.2
)
(0.2
)
Net amount recognized in accumulated other comprehensive loss
$
17.0
$
2.4
$
(7.2
)
$
12.2
The following table provides details regarding the weighted-average assumptions for both the pension and other benefits used to determine each respective
benefit obligation and net periodic benefit cost for the fiscal years ended January 1, 2011 and December 26, 2009:
Pension benefits
U.S. plans
Non-U.S. plans
Other benefits
January 1,
2011
December 26,
2009
January 1,
2011
December 26,
2009
January 1,
2011
December 26,
2009
Weighted-average assumptions used to determine benefit obligations at year-end:
Discount rate
5.22
%
5.98
%
3.77
%
4.48
%
4.75
%
5.50
%
Rate of compensation increase
N/A
4.00
2.09
2.30
N/A
N/A
Weighted-average assumptions used to determine net (benefit) / cost:
Discount rate
5.99
6.50
4.55
4.18
5.50
6.25
Expected return on plan assets
7.44
7.44
4.50
5.07
N/A
N/A
Rate of compensation increase
N/A
4.00
1.85
1.11
N/A
N/A
F-33
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
The Company sets the discount rate assumption annually for each of its retirement-related benefit plans at their measurement dates to reflect the yield of a
portfolio of high quality, fixed-income debt instruments matched against the timing and amounts of projected future benefits. Assumptions regarding the health care cost trends and rates are as
follows:
January 1,
2011
December 26,
2009
Assumed health care trend rates:
Initial health care cost trend rate
9.0
%
9.0
%
Ultimate health care cost trend rate
5.0
%
5.0
%
Number of years to ultimate trend rate
8 years
4 years
A one percentage point increase or decrease in the initial assumed health care trend rate through ultimate assumed health care trend rates would have an
immaterial effect on the accumulated postretirement benefit obligation at January 1, 2011.
The
Company has selected a 7.05% weighted average expected rate of return on plan assets for the fiscal year ending December 31, 2011. The Company selected the expected long-term
rate of return on plan assets by examining the past performance and the economic forecasts for the types and specific investments held by each plan on an annual basis. The Company believes a 7.05%
rate of return to be reasonable given the historical performance of the current asset allocation and the expected future performance for each plan.
The
following benefit payments and contributions are expected to be paid (in millions):
Pension benefits
Other benefits
Fiscal years ending
U.S.
plans
Non-U.S.
plans
Gross benefit
payments
2011
$
4.1
$
0.3
$
0.2
2012
4.4
0.3
0.2
2013
4.2
0.4
0.2
2014
4.3
0.4
0.2
2015
4.3
0.6
0.2
2016-2020
23.8
3.6
0.6
The Company's overall asset investment strategy focuses on maintaining a diversified portfolio using various asset classes in order to achieve the
long-term investment objectives on a risk adjusted basis. The actual invested positions in various securities change over time based on short- and long-term
investment opportunities. The Company reviews its assets on a regular basis to ensure that they are within the targeted asset allocation ranges and, if necessary, asset balances are adjusted back
within target allocations. Target allocation percentages differ by each individual plan but are relatively consistent with the allocation percentages shown in the table below.
F-34
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
The following table presents information about the Company's plan assets measured at fair value on a recurring basis at January 1, 2011, and indicates the fair value
hierarchy of the valuation techniques utilized to determine such fair value:
Total
Quoted
prices in
active
markets
for
identical
assets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Asset
allocation
percentages
As of January 1, 2011
Cash and deposits
$
3.2
$
3.2
$
—
$
—
5
%
Equity securities:
U.S. Large Cap Growth
(a)
3.7
3.7
6
U.S. Large Cap Value
(a)
3.8
3.8
6
U.S. Mid Cap Growth
(a)
2.2
2.2
3
U.S. Mid Cap Value
(a)
2.2
2.2
3
U.S. Small Cap Growth
(a)
1.7
1.7
3
U.S. Equity Index Fund
(a)
1.1
1.1
2
U.S. Natural Resources
(a)
2.8
2.8
4
International Blend
(b)
7.2
7.2
11
Total equity securities
24.7
24.7
38
%
Fixed income:
Guaranteed Deposit Fund
(c)
12.8
12.8
20
Templeton Global Bond Fund ADVI
(d)
7.8
7.8
12
Core Bond Enhanced Index / PIM Fund
(d)
8.8
8.8
13
High Yield Bond / Caywood-Scholl Fund
(d)
2.7
2.7
4
International Corporate Bonds
5.4
5.4
8
Total fixed income
37.5
24.7
12.8
57
%
Total
$
65.4
$
3.2
$
49.4
$
12.8
100
%
F-35
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
Total
Quoted
prices in
active
markets
for
identical
assets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Asset
allocation
percentages
As of December 26, 2009
Cash and deposits
$
2.9
$
2.9
$
—
$
—
5
%
Equity securities:
U.S. Large Cap Growth
(a)
4.7
4.7
8
U.S. Large Cap Value
(a)
4.6
4.6
8
U.S. Mid Cap Growth
(a)
1.3
1.3
2
U.S. Mid Cap Value
(a)
1.3
1.3
2
U.S. Small Cap Growth
(a)
2.8
2.8
5
U.S. Equity Index Fund
(a)
2.7
2.7
4
International Blend
(b)
8.6
8.6
14
Total equity securities
26.0
26.0
43
%
Fixed income:
Guaranteed Deposit Fund
(c)
10.6
10.6
17
Vanguard Inflation-Protected Securities
(d)
5.1
5.1
8
Core Bond Enhanced Index / PIM Fund
(d)
2.3
2.3
4
High Yield Bond / Caywood-Scholl Fund
(d)
5.4
5.4
9
International Corporate Bonds
5.0
5.0
8
Total fixed income
28.4
17.8
10.6
46
%
Real estate
(e)
3.7
3.7
6
%
Total
$
61.0
$
2.9
$
43.8
$
14.3
100
%
(a)
U.S. equity securities are primarily invested in domestic equities. Securities in these funds are typically priced using the closing price from the applicable exchange(s).
(b)
International equity securities are typically priced using the closing price from the appropriate local exchange(s). Securities are evaluated by a third party which
seeks to update
prices in the event there are material market movements between local exchange closing times and the portfolio valuation time (4pm EST each day).
(c)
Assets consist of investments in interest rate-based funds. The value in these assets is calculated by multiplying the balance in the account by an established
interest
rate.
(d)
Assets are typically comprised of U.S. fixed-income securities. Securities are priced by an outside service using inputs such as benchmark yields, reported trades,
broker/dealer
quotes, and issuer spreads. The outside service also monitors market indices and industry and economic events, including credit rating agency actions.
(e)
The fair value of real estate funds is determined through an independent appraisal process. The fair value is based on the conventional approaches to value, all of
which require the
exercise of subjective judgment.
F-36
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
The following table presents the changes in Level 3 Plan assets measured on a recurring basis for the years ended January 1, 2011 and December 26, 2009 (in
millions):
Plan assets
Guaranteed
deposit fund
Real
estate
Balance—December 27, 2008
$
10.6
$
2.1
Transfers into Level 3
1.6
Total gains or losses (realized/unrealized) included in changes in net asset
0.8
1.6
Purchases, issuances, sales and settlements:
Purchases
1.9
Sales
(4.3
)
Balance—December 26, 2009
10.6
3.7
Transfers into Level 3
2.2
Total gains or losses (realized/unrealized) included in changes in net asset
1.5
0.3
Purchases, issuances, sales and settlements:
Purchases
2.9
Sales
(4.4
)
(4.0
)
Balance—January 1, 2011
$
12.8
$
—
A subsidiary of the Company also maintains a 401(k) defined contribution plan for the benefit of its U.S. employees. The Company's matching contributions for
the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008 were $0.5 million, $0.1 million, and $1.5 million, respectively. Effective
February 2009, the Company suspended the 401(k) defined contribution plan matching program in the U.S. The Company resumed the matching program in April 2010.
8. COMMITMENTS AND CONTINGENCIES
Leases
—The Company's principal noncancelable, long-term, operating lease obligations are for land, manufacturing equipment, and office and warehouse
space. Rental expense for the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008, was $3.5 million, $4.3 million, and $5.6 million,
respectively.
Property,
plant, and equipment recorded under capital leases and related accumulated depreciation was $19.6 million and $2.6 million as of January 1, 2011, respectively, and
$21.1 million and $2.1 million as of December 26, 2009, respectively.
F-37
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
Future
minimum lease payments under noncancelable operating and capital leases at January 1, 2011 are as follows (in millions):
Fiscal years ending
Operating
leases
Capital
leases
2011
$
1.4
$
1.3
2012
1.2
1.3
2013
0.7
1.3
2014
0.5
1.3
2015
0.4
1.3
Thereafter
1.8
12.9
Total minimum lease payments
$
6.0
19.4
Less imputed interest
(4.2
)
Present value of minimum lease payments
15.2
Current portion of capital lease obligations (included in other current liabilities)
(0.8
)
Long-term portion of capital lease obligations
$
14.4
The Company received approximately $2.0 million, $2.0 million, and $2.1 million of rental income from the sublease of certain office and
warehouse space during the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008, respectively. Rental income was recorded as a reduction of cost of goods
sold in the consolidated statements of operations. The sublease is expected to provide approximately $2.0 million in rental income during the fiscal year ending December 31, 2011 and
$1.9 million for both fiscal years 2012 and 2013.
Legal Proceedings
—From time to time, the Company is involved in legal proceedings and claims that occur in the normal course of business. Although there can be no
assurance, the Company does not believe the results of these proceedings will have a material effect on its business, results of operations, financial position, or cash flows.
On
February 15, 2010, the Company entered into a settlement agreement with a third party ending a dispute related to the use of patented technology. The agreement resulted in the Company
receiving a settlement from the third party in the amount of $3.0 million which has been recorded in other income in the consolidated statement of operations during the fiscal year ended
January 1, 2011. The agreement also requires the third party to pay royalties during the life of the patent.
9. STOCK-BASED COMPENSATION
Option Plans
—Executives and other key employees have been granted options to purchase partnership units in the sole stockholder of the Company under terms of the
2004 Option Plan ("2004 Plan") and the Partnership 2010 Option Plan ("2010 Plan"). The Plans were adopted in June 2004 and September 2010, respectively, and are administered by a committee appointed
by TPG (the "Committee"). The exercise price of the stock options granted are determined by the Committee.
The options vest annually over a 2- to 5-year period beginning with the first anniversary of the grant date and bear a 10-year contractual life.
F-38
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
Restricted Unit Plan
—Executives and other key employees have been granted restricted units in the Limited Partner Common Units of the sole stockholder of the
Company under terms of the 2007 Restricted Unit Plan ("2007 Unit Plan") as amended and restated as of September 30, 2010. The plan was adopted and is administered by the Committee. The fair
value of the units granted is determined by the Committee at date of issuance. The units vest in accordance with the terms outlined in each individual restricted unit grant agreement. The restricted
units or any such portion thereof that is not vested on the date the participant's services are terminated shall expire on such date.
As
of January 1, 2011 and December 26, 2009, the Committee had authorized the issuance of an aggregate number of options and restricted units under the terms of the Plans discussed above
of 21,697,494 and 6,812,671, respectively. The Company had a combined total of 16,834,000 and 5,184,000 options and restricted units outstanding as of January 1, 2011 and December 26,
2009, respectively.
The
Company adopted the fair value method on January 1, 2006 in recognizing stock-based compensation expense. Under the fair value method, the Company estimates the fair value of each option
award on the grant date using the Black-Scholes option pricing model and certain assumptions. The weighted average assumptions utilized for options granted during the fiscal years ended
January 1, 2011 and December 27, 2008 are noted in the following table:
January 1,
2011
December 27,
2008
Expected dividend rate
0
%
0
%
Expected stock price volatility
65.0
%
71.8
%
Risk free interest rate
1.43
%
3.21
%
Expected term of options
6.0 Years
6.5 Years
No options were granted during the fiscal year ended December 26, 2009.
The
Company based expected volatility on the historical volatility of a peer group of publicly traded entities over a period consistent with the expected terms of the options as the Company did not
have a sufficient trading history to use the volatility of the Company's common stock. The expected term of options represents the period that the options are expected to be outstanding and is based
on management's best estimate. The risk-free interest rate used is based on the United States Treasury yield in effect at the time of grant for zero coupon United States Treasury notes
with maturities approximating each grant's expected life. The Company does not have a history of issuing dividends and does not expect to issue dividends in the foreseeable future.
The
Company calculates employee stock-based compensation expense based on awards ultimately expected to vest as reduced for estimated forfeitures. The fair value method requires forfeitures to be
estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates the forfeiture rate based on an analysis of
actual forfeitures and will continue to evaluate the adequacy of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover behavior, and other factors. The impact from a
forfeiture rate adjustment will be recognized in full in the period of adjustment, and if the actual number of future forfeitures differs from that estimated, the Company may be required to record
adjustments to stock-based compensation expense in future periods.
F-39
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
In
conducting the valuation of the partnership units, the Company used a methodology that is consistent with the methods outlined in the
AICPA Practice Aid Valuation of
Privately-Held-Company Equity Securities Issued as Compensation
. These valuations were prepared beginning in 2004, contemporaneous with the grant of
stock-based payment awards. In preparing the 2010 consolidated financial statements, the Company determined that these historic valuations did not appropriately consider the rights and preferences of
the Company's and the sole stockholder's share and partnership unit classes, respectively. Accordingly, during 2011, the Company engaged a third-party consultant to assist in the determination of the
estimated fair value of the partnership units underlying the stock-based awards, as described in Note 5, and performed retrospective valuations for significant historical stock-based payment
award dates. These retrospective valuations resulted in new estimates of fair value of the partnership units underlying the stock-based payment awards at each respective period. The revised fair
values were utilized to prepare the Company's consolidated financial statements for all periods presented.
All
of the allocated value associated with the Company's common stock and CPCs would be available to the Company's sole stockholder. Similar to the Company enterprise allocation described in
Note 5, the OPM was used to allocate this value among the varying partnership interests, including the partnership units underlying the Company's stock-based payment awards. The Company
allocated this value based on a series of call options using the Black-Scholes option pricing model and assumptions consistent with those selected to value the options to purchase partnership units,
previously discussed. The estimates made with respect to the anticipated timing of a potential liquidity event and volatility were consistent with those associated with the allocation of enterprise
value among the securities that comprise the Company's capital structure.
On
October 8, 2010, certain of the Company's employees holding options (vested or unvested at that date) were given an offer to either retain their existing options with the originally issued
terms or surrender their options for $0.53 in cash for each vested option payable immediately as well as $0.53 in cash for each unvested option payable upon completion of that unvested option's
original service-based vesting condition.
In
addition, on October 8, 2010, the remaining employees of the Company holding options (vested or unvested at that date) were given an offer to surrender all of their existing options (vested
or unvested at that date) in exchange for a combination of new options ("New Options") and new restricted partnership units ("New Restricted Units") to be granted under the 2010 Plan and 2007 Unit
Plan, respectively.
As
of October 8, 2010, 4,562,000 options were outstanding and the holders thereof elected the following:
Action taken
Options
Vested options surrendered for cash
565,000
Unvested options surrendered for cash upon vesting
331,000
Options exchanged for new options and restricted units
3,630,000
Original options retained
36,000
Total
4,562,000
As a result, employees received $299,450 in cash for vested options surrendered and were entitled to $175,430 in cash for unvested options to be earned as those
options vest under their original terms. The
F-40
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
consideration
given for the vested options surrendered was in excess of the surrender date fair value by $175,610 and was recognized as compensation expense in 2010. As future service is required for
payment of the options unvested as of October 8, 2010, the Company determined that the transaction was a modification under ASC 718 that changes the award classification from equity to
liability. Incremental compensation cost for these modified awards, measured as the excess of their fair value over the fair value of the original awards immediately before the terms were modified,
was not material.
A
total of 13,460,500 New Options were issued and 3,337,500 New Restricted Units were issued in connection with the exchanges. Both the New Options and New Restricted Units are graded-vesting awards
(one-third per year beginning on the first anniversary of the grant) containing
only service vesting conditions. Both instruments are non-transferable and contain no voting or distribution rights and unvested awards are forfeited upon employee termination. The New
Options expire 10 years after the grant date and contain no redemption rights. The New Restricted Units contain a feature whereby, upon vesting and the holder obtaining Limited Partner Common
Units pursuant to the 2007 Unit Plan, the Partnership has a call right on those Limited Partner Common Units during the 90-day period after the later of: a) participant termination;
or b) the date on which the participant has held Limited Partner Common Units acquired pursuant to the 2007 Unit Plan for at least 180 days, at fair value measured as of the date such
right is exercised by the Partnership.
The
Company determined the issuance of New Options and New Restricted Units was a modification under ASC 718 for substantially all of the exchanged options. Accordingly, the Company measured the
incremental fair value of consideration given for these modified awards over that of the options tendered and determined there to be $6.8 million of additional value. This additional
stock-based compensation, as well as $1.6 million of unrecognized stock-based compensation related to the options tendered in the modification, will be recognized over the vesting period of the
New Options and New Restricted Units using the straight-line method.
F-41
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
A
summary of option activity as of January 1, 2011, and changes during the three years then ended follows:
Options
Weighted
average
exercise
price
Weighted
average
remaining
contractual
life
(in years)
Aggregate
intrinsic value
Balance outstanding—December 29, 2007
4,377,416
$
1.22
Options granted
2,770,000
1.22
Options exercised
(10,000
)
1.22
Options forfeited
(1,403,416
)
1.22
Balance outstanding—December 27, 2008
5,734,000
1.22
Options granted
Options exercised
Options forfeited
(550,000
)
1.22
Balance outstanding—December 26, 2009
5,184,000
1.22
Options granted
13,460,500
0.49
Options exercised
Options exchanged for cash
(896,000
)
1.22
Options surrendered for new options and restricted units
(3,630,000
)
1.22
Options forfeited
(622,000
)
1.22
Balance outstanding—January 1, 2011
13,496,500
0.49
9.76
$
3,768,940
Balance exercisable—January 1, 2011
24,000
$
1.22
6.05
$
—
The aggregate intrinsic value represents the total pretax intrinsic value (the difference between the exercise price and the sole stockholder's determined unit
value at January 1, 2011, multiplied by the number of units whose fair value exceeded the exercise price at that date) that would have been received by the option holders if the options had
been exercised on January 1, 2011. At January 1, 2011, there were 13,460,500 units whose fair value exceeded the exercise price at that date.
The
weighted average grant date fair value of options granted during the fiscal years ended January 1, 2011 and December 27, 2008, was $0.41 and $1.24 per option, respectively. No
options were exercised during the years ended January 1, 2011 and December 26, 2009. At January 1, 2011, the Company expects approximately 11,590,380 options to vest. At
January 1, 2011, these options have an aggregate intrinsic value of $3,235,730, a weighted average remaining contractual term of 9.76 years and a weighted average exercise price of
$0.49. The total weighted average grant date fair value of options vested during the years ended January 1, 2011, December 26, 2009, and December 27, 2008, was $1,614,060,
$1,981,000, and 1,275,870, respectively.
F-42
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
A summary of restricted unit activity as of January 1, 2011, and changes during the three years then ended follows:
Restricted
units
Balance outstanding—December 29, 2007
7,500
Restricted units granted
15,000
Restricted units vested
(22,500
)
Balance outstanding—December 27, 2008
Restricted units granted
Restricted units vested
Balance outstanding—December 26, 2009
Restricted units granted
3,337,500
Restricted units vested
Balance outstanding—January 1, 2011
3,337,500
The aggregate intrinsic value of restricted units outstanding at January 1, 2011 is $2,569,875.
Granted
but unvested restricted units are forfeited upon termination of employment. At January 1, 2011, the Company expects approximately 2,738,660 restricted units to vest. At
January 1, 2011, these restricted units have an aggregate intrinsic value of $2,108,768, a weighted average remaining contractual term of 2.77 years and a weighted average grant date
fair value of $0.63.
A
summary of the status of the Company's unvested options and restricted units as of January 1, 2011, and changes during the year ended January 1, 2011 follows:
Options
Weighted-
average
grant date
fair value
Unvested at December 26, 2009
2,700,000
$
1.66
Granted
13,460,500
0.41
Vested
(854,000
)
1.89
Forfeited
(102,000
)
1.57
Exchanged for cash
(331,000
)
1.45
Surrendered for new options and restricted units
(1,401,000
)
1.57
Expired
Unvested at January 1, 2011
13,472,500
$
0.41
F-43
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
Restricted
units
Weighted-
average
grant date
fair value
Unvested at December 26, 2009
—
$
0.00
Granted
3,337,500
0.63
Forfeited
Unvested at January 1, 2011
3,337,500
$
0.63
As of January 1, 2011, there was $8,057,775 of total unrecognized compensation expense related to unvested stock-based compensation granted. The cost is
expected to be recognized over a weighted average period of 2.77 years. As of January 1, 2011 and December 26, 2009, 24,000 and 2,484,000 options, respectively, were vested. As of
January 1, 2011, the Company has 13,472,500 options that are unvested and 3,337,500 restricted units that are unvested.
10. FAIR VALUE MEASUREMENTS
Fair Value Measurements on Recurring Basis
—The Company measures the fair value of certain assets and liabilities on a recurring basis based upon a fair value
hierarchy in accordance with ASC 820,
Fair Value Measurements and Disclosures
, as follows:
Level 1—Observable
inputs such as quoted prices in active markets;
Level 2—Inputs,
other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3—Unobservable
inputs in which there is little or no market data, which require the Company to develop its own assumptions.
F-44
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
Liabilities
measured at fair value on a recurring basis include interest rate swaps and embedded derivatives. The following table presents information about the Company's liabilities measured at fair
value on a recurring basis as of January 1, 2011 and December 26, 2009 (in millions):
Fair value measurements at
reporting date using
Total
carrying
value
Quoted
prices in
active
markets
for
identical
assets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
January 1, 2011:
Liabilities:
Interest rate swaps
(1)
$
0.6
$
0.6
Embedded derivative liability
66.4
66.4
December 26, 2009:
Liabilities:
Interest rate swaps
(1)
$
0.7
$
0.7
Embedded derivative liability
27.5
27.5
(1)
Included in other liabilities in the consolidated balance sheet.
The Company's interest rate swaps are determined based on market prices for similar instruments in active markets and are classified as Level 2.
Valuations using discounted cash flows are classified within Level 3 as these valuations were determined by valuation techniques based upon assumed conversion feature activity and discounting
those cash flows at a rate reflective of current market conditions and factors specific to the Company. The Company's embedded derivative liabilities are measured using Level 3 inputs.
F-45
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
The
following table presents the changes in Level 3 liabilities measured on a recurring basis for the years ended January 1, 2011 and December 26, 2009 (in millions):
Embedded
derivative
liability
CPCs
Debt
Balance—December 27, 2008
$
—
$
—
Net change in fair value included in earnings
27.5
Translation adjustment
Balance—December 26, 2009
27.5
—
Initial fair value of Class C CPCs
56.3
Initial fair value of Senior Secured and Mezzanine Debt
9.2
Net change in fair value included in earnings
(21.7
)
(3.3
)
Translation adjustment
(1.6
)
Balance—January 1, 2011
$
60.5
$
5.9
Fair Value Measurements on a Nonrecurring Basis
—Certain assets and liabilities are not measured at fair value but are recognized and disclosed at fair value on a
nonrecurring basis. During fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008, such measures of fair value related primarily to the evaluation of
impairment of property, plant, and equipment associated with closed manufacturing facilities and the impairment of goodwill. During fiscal years ended December 26, 2009 and December 27,
2008, property, plant, and equipment was determined to be impaired for certain assets and resulted in impairment charges of $4.1 million and $3.3 million, respectively. There were no
such impairment charges for the fiscal year ended January 1, 2011.
11. RESTRUCTURING COSTS
During fiscal year 2010, the Company continued restructuring activities that began in fiscal year 2008 to streamline the Company's organizational
structure, reduce labor costs and improve manufacturing capacity utilization. The Company recorded restructuring expense of $4.8 million, $18.1 million, and $7.7 million as a
separate line item in the consolidated statements of operations for the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008, respectively. Since the
inception of this restructuring initiative, the Company has incurred costs totaling $30.6 million. All major restructuring activities are substantially complete and the Company expects
restructuring expenses to be minimal in fiscal year 2011.
F-46
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
A
roll forward of accrued restructuring costs for the fiscal years ended January 1, 2011 and December 26, 2009, is presented as follows:
Termination
benefits
Facility
closure
costs
Professional
fees
Total
Balance at December 27, 2008
$
1.2
$
—
$
—
$
1.2
Restructuring expense
2.4
7.5
8.2
18.1
Cash payments
(3.2
)
(3.4
)
(8.2
)
(14.8
)
Noncash charges
(1)
(4.1
)
0.0
(4.1
)
Balance at December 26, 2009
$
0.4
$
—
$
—
$
0.4
Restructuring expense
0.3
1.2
3.3
4.8
Cash payments
(0.5
)
(1.2
)
(3.3
)
(5.0
)
Balance at January 1, 2011
$
0.2
$
—
$
—
$
0.2
12. INCOME TAXES
Geographic sources of income (loss) before taxes from continuing operations for the fiscal years ended January 1, 2011, December 26,
2009, and December 27, 2008 are as follows (in millions):
January 1,
2011
December 26,
2009
December 27,
2008
U.S.
$
(33.1
)
$
(34.8
)
$
(41.7
)
Foreign
62.6
(50.2
)
96.0
Total
$
29.5
$
(85.0
)
$
54.3
F-47
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
Significant components of the Company's income tax provision (benefit) from continuing operations for the fiscal years ended January 1, 2011,
December 26, 2009, and December 27, 2008 are as follows (in millions):
Current
Deferred
Total
Fiscal year ended January 1, 2011
U.S. Federal
$
—
$
—
$
—
Foreign
19.3
4.9
24.2
U.S. State
0.2
0.2
Total
$
19.5
$
4.9
$
24.4
Fiscal year ended December 26, 2009
U.S. Federal
$
—
$
—
$
—
Foreign
7.9
(1.4
)
6.5
U.S. State
Total
$
7.9
$
(1.4
)
$
6.5
Fiscal year ended December 27, 2008
U.S. Federal
$
—
$
—
$
—
Foreign
8.5
(1.8
)
6.7
U.S. State
0.1
0.1
Total
$
8.6
$
(1.8
)
$
6.8
The reconciliation between the Company's effective tax rate on income from continuing operations and the statutory tax rate is as follows for fiscal years 2010,
2009, and 2008:
January 1,
2011
December 26,
2009
December 27,
2008
Income taxes at Luxembourg rate
28.6
%
28.6
%
29.6
%
Foreign income tax rate differential
(0.3
)%
1.3
%
(2.9
)%
Nondeductible expenses
0.0
%
2.8
%
5.7
%
Goodwill impairment
0.0
%
0.0
%
6.2
%
Change in uncertain tax positions
115.3
%
(1.9
)%
11.3
%
Change in valuation allowance
(60.8
)%
(38.4
)%
(37.4
)%
82.8
%
(7.6
)%
12.5
%
The Company's provision for income taxes from discontinued operations was not material for the years ended January 1, 2011, December 26, 2009, and
December 27, 2008.
Deferred
tax benefits recognized in income tax expense resulting from operating loss carryforwards were $0, $2.9 million, and $0.5 million for the years ended January 1, 2011,
December 26, 2009, and December 27, 2008, respectively. Deferred tax benefit of approximately $0.3 million, $0.3 million, and $0.2 million and deferred tax expenses
of approximately $0.3 million, $0.6 million, and $0.1 million were attributable to statutory rate change adjustments for the years ended January 1, 2011,
December 26, 2009, and December 27, 2008, respectively.
F-48
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
An
income tax provision has been recorded related to Taiwan withholding taxes in the amount of $0.8 million and $0.7 million for the years ended January 1, 2011 and
December 26, 2009, respectively. No income tax provision has been made for the remaining amount of undistributed earnings of foreign subsidiaries deemed permanently reinvested or expected to be
distributed in a tax-free transaction. Cumulatively these undistributed earnings were approximately $13.0 million and $10.0 million at January 1, 2011 and
December 26, 2009, respectively.
Deferred
tax assets and liabilities as of January 1, 2011 and December 26, 2009 are comprised of the following (in millions):
January 1,
2011
December 26,
2009
Deferred tax assets:
Accounts receivable
$
0.3
$
0.7
Inventory
1.1
0.8
Property, plant, and equipment
7.2
8.4
Net operating losses
79.3
110.0
Accruals
3.7
3.2
Pensions
10.9
10.1
Derivatives
17.4
7.9
Other
8.5
8.1
Gross deferred tax assets
128.4
149.2
Valuation allowance
(104.9
)
(126.6
)
Total deferred tax assets
23.5
22.6
Deferred tax liabilities:
Property, plant, and equipment
(5.0
)
(6.1
)
Note discount
(10.0
)
0.0
Intangible assets
(0.5
)
(1.3
)
Other
(3.0
)
(5.8
)
Total deferred tax liabilities
(18.5
)
(13.2
)
Net deferred tax assets
$
5.0
$
9.4
As of January 1, 2011, the Company had, for income tax reporting purposes, net operating loss carryforwards of approximately $292.3 million in
various taxing jurisdictions, of which $20.5 million expire in varying amounts between 2011 and 2030.
Internal
Revenue Code Section 382 ("Section 382") imposes limitations on the availability of a company's net operating losses after certain ownership changes occur. The
Section 382 limitation is based upon certain conclusions pertaining to the dates of ownership changes and the value of the Company on the dates of the ownership changes. It was determined that
an ownership change occurred in September 2010. The amount of the Company's net operating losses incurred prior to the ownership change is limited based on the value of the Company on the
ownership change date. Management has determined the amount of net operating losses generated prior to the ownership change available to offset taxable income subsequent to the
F-49
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
ownership
change to be nominal. Therefore, the Company has removed federal net operating loss carryforwards of $77.3 million and state net operating loss carryforwards of $65.5 million
generated prior to the ownership change from its deferred tax assets accompanied by a corresponding reduction of the valuation allowance.
The
Company records a valuation allowance on the deferred tax assets to reduce such assets to an amount management believes is more likely than not to be realized. The valuation decreased by
$21.4 million during 2010. The valuation allowance as of January 1, 2011 and December 26, 2009, was principally to offset certain deferred income tax assets related to net
operating loss ("NOL") carryforwards. Net deferred tax assets have been recognized in tax jurisdictions where management believes it is more likely than not that such assets will be
realized.
A
reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows (in millions):
January 1,
2011
December 26,
2009
Beginning unrecognized tax benefit
$
19.3
$
19.4
Gross increase in tax positions in prior period
18.2
Gross decrease in tax positions in prior period
(0.2
)
(2.4
)
Gross increase in tax positions in current period
15.1
2.5
Lapse of statute
(0.5
)
Settlements
(0.3
)
Foreign exchange differences
(0.8
)
0.3
Ending unrecognized tax benefit
$
51.3
$
19.3
Of the total unrecognized tax benefits for the fiscal years ended January 1, 2011 and December 26, 2009, $50.5 million and
$18.4 million, respectively, represent the amount that, if recognized, and prior to a consideration of the need for a valuation allowance, would have a favorable effect on the Company's
effective tax rate in any future periods.
In
accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company recorded
tax-related interest expense of $0.9 million $0.1 million, and $0.4 million for the years ended January 1, 2011, December 26, 2009, and
December 27, 2008, respectively. The Company recorded no tax-related penalties for the years ended January 1, 2011 and December 29, 2009, and $0.2 million for
the year ended December 27, 2008. The total gross amount of accrued interest is $2.0 million as of January 1, 2011 and $1.1 million as of December 26, 2009. The
gross amount of accrued penalties is $0.2 million as of both January 1, 2011 and December 26, 2009.
The
Company files income tax returns with federal, state, local, and foreign jurisdictions and is subject to reviews and U.S. audits of those returns. Currently, the Internal Revenue Service ("IRS")
is examining the 2008 and 2009 federal income tax returns. The Company is no longer subject to IRS examination for periods prior to 2007, although carryforward attributes that were generated prior to
2007 may still be adjusted upon examination by the IRS if they either have been or will be used in a future period. The Company's German income tax returns are also under examination by taxing
authorities for the years 2004 to 2007. With a few exceptions, the Company is no longer subject to examination for years prior to 2004.
F-50
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
As
a result of the settlements with taxing authorities, it is reasonably possible that the total amounts of unrecognized tax benefits as of January 1, 2011 will decrease by up to
$11.7 million during the next twelve months. The amount of the reduction that would have a favorable impact on the Company's provision for income taxes is $10.9 million.
13. RELATED-PARTY TRANSACTIONS
On September 30, 2010, a subsidiary of the Company entered into the Financing Transaction (see Notes 4 and 5). The Company received
$376.4 million in aggregate proceeds in connection with the Financing Transaction. A syndicate of lenders who obtained an ownership interest in the sole shareholder of the Company as part of
the Financing Transaction provided $369.4 million of the aggregate proceeds.
Certain
subsidiaries of the Company are party to a management services agreement with a related party to provide continuing business strategy, management consulting, and financial advisory services.
The Company recorded $2.1 million in fees related to this agreement during each fiscal year ended January 1, 2010, December 26, 2009 and December 27, 2008, which is
included in selling, general and administrative expense in the consolidated statement of operations. Amounts payable to the related party totaled $1.0 million and $2.0 million at
January 1, 2011 and December 26, 2009, respectively.
In
conjunction with the purchase of the Company in 2004, an exclusive distributorship right for the United States was granted to a noncontrolling owner of the sole stockholder. Sales to the related
party totaled $33.8 million, $23.5 million and $34.8 million during the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008,
respectively. Receivables from the related party totaled $4.4 million and $4.1 million at January 1, 2011 and December 26, 2009, respectively.
14. BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION
The Company manages the business through three reportable operating segments, which are defined by the geographic regions in which the Company
operates (U.S., Europe, and Asia). Each region has separate management teams and reporting structures and provides similar products to a similar set of customers. Segment information is consistent
with how the chief operating decision maker reviews the business, makes investing and resource allocation decisions and assesses overall operating performance. The Company evaluates performance based
upon several factors, of which the primary financial measure is segment operating income (loss). Segment operating income (loss) does not include certain corporate operating costs such as
administrative, legal, sales and marketing, and research and development costs. The Company believes that information about segment operating income (loss) assists all users of the Company's
consolidated financial statements by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from nonoperational factors that affect net income,
thus providing insight into both operations and the other factors that affect reported results. The accounting policies of the segments are the same as those described in Note 1.
F-51
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
The following table presents certain results of operations and balance sheet information by identified segments (in thousands):
Asia
Europe
U.S.
Corporate
Total
Fiscal year ended January 1, 2011
External revenues
$
349,421
$
133,457
$
129,109
$
—
$
611,987
Operating income / (loss)
58,777
3,958
16,900
(14,984
)
64,651
Depreciation and amortization
6,603
4,229
5,564
541
16,937
Segment assets
205,792
73,804
72,580
25,018
377,194
Fiscal year ended December 26, 2009
External revenues
$
226,588
$
89,277
$
100,275
$
—
$
416,140
Operating income / (loss)
21,755
(8,578
)
2,561
(17,211
)
(1,473
)
Depreciation and amortization
7,754
5,803
5,833
447
19,837
Segment assets
193,800
81,191
81,771
1,090
357,852
Fiscal year ended December 27, 2008
External revenues
$
310,379
$
126,967
$
132,987
$
—
$
570,333
Operating income / (loss)
27,684
(6,523
)
(11,884
)
(15,627
)
(6,350
)
Depreciation and amortization
9,335
6,609
7,470
358
23,772
Corporate expenses reflected in operating income (loss) consist primarily of administrative, legal, sales and marketing, and research and development costs.
Operating
loss for the year ended December 27, 2008 reflects goodwill impairment charges of $8.5 million recorded in the U.S. segment. During fiscal years 2009 and 2008, the Company
recorded $4.1 million and $3.3 million, respectively, in asset impairments related to the closure of manufacturing facilities in the Asia and U.S. segments, respectively.
One
customer accounted for $78.0 million, $49.6 million, and $85.1 million of revenue for the fiscal years ended January 1, 2011, December 26, 2009, and
December 27, 2008, respectively. Sales to that customer in the Asia segment were $63.8 million, $38.0 million, and $66.6 million for fiscal years 2010, 2009, and 2008,
respectively. Sales to that customer in the U.S. segment were $14.2 million, $11.6 million, and $18.5 million for fiscal years 2010, 2009, and 2008, respectively. The Europe
segment did not have any sales to the customer for the periods presented.
Revenue
is attributable to geographic regions and countries based on the location where the transaction occurred and the product was manufactured.
F-52
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
The
following table presents revenues according to the country of origin (in thousands):
January 1,
2011
December 26,
2009
December 27,
2008
China
$
139,119
$
99,693
$
121,485
Germany
131,509
87,714
123,934
Taiwan
91,265
52,506
65,616
Hong Kong
68,235
34,366
72,696
Other
52,750
41,586
53,615
Total foreign countries
482,878
315,865
437,346
United States
129,109
100,275
132,987
Totals
$
611,987
$
416,140
$
570,333
The following table presents tangible long-lived assets based on the physical location of the asset:
Long-lived assets
January 1,
2011
December 26,
2009
Taiwan
$
25,881
$
24,371
Germany
26,088
28,144
China
23,671
24,435
Italy
18,813
20,743
Other
12,790
7,259
Total foreign countries
107,243
104,952
United States
32,354
37,988
Totals
$
139,597
$
142,940
15. DISCONTINUED OPERATIONS
During fiscal year 2009, the Company developed plans to cease operations and close one of its subsidiaries located in Italy. Closure of the
subsidiary was necessitated by an increase in excess manufacturing capacity within the European business segment due to the overall decline in the global economy. The closure was completed in
December 2009 when the Company received approval for a Concordato Preventivo from local authorities. A Concordato Preventivo is a legal process whereby the creditors of the Company and the
Company reach a mutual agreement regarding repayment of outstanding debts. Upon approval from local authorities, the Company's interest in the subsidiary is essentially abandoned and all assets of the
subsidiary become property of the courts to liquidate for the benefit of the creditors. For fiscal year 2009, the Company recorded a loss from operations of the subsidiary of $5.6 million and a
loss from the disposal of the subsidiary of $3.6 million. In fiscal 2008, a loss from operations of the subsidiary of $11.7 million was recorded. Revenues from the subsidiary were
$8.1 million and $33.2 million in the fiscal years ended December 26, 2009 and December 27, 2008, respectively. The tax impact for fiscal years 2009 and 2008 was not
material.
F-53
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
16. EARNINGS PER SHARE
Basic earnings per share ("EPS") is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the
period. Diluted EPS is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. The shares
underlying the CPCs were not included in the computation of diluted EPS for any periods presented as the shares were considered contingently issuable (see Note 5).
The
following table summarizes the computation of basic and diluted EPS for the fiscal years ended January 1, 2011, December 26, 2009 and December 27, 2008:
January 1,
2011
December 26,
2009
December 27,
2008
(In thousands, except for share and per share data)
Net income / (loss) from continuing operations
$
5,082
$
(91,549
)
$
47,454
Net income / (loss) from discontinued operations
(9,177
)
(11,655
)
Net income / (loss)
$
5,082
$
(100,726
)
$
35,799
Weighted average common shares outstanding—basic
500
500
500
Weighted average number of common and potential common shares outstanding—diluted
500
500
500
Basic and diluted net income / (loss) per common share
Continuing operations
$
10.16
$
(183.10
)
$
94.91
Discontinued operations
—
(18.35
)
(23.31
)
$
10.16
$
(201.45
)
$
71.60
Unaudited Pro Forma Net Income / (Loss) Per Share
In connection with the Reorganization, all of the outstanding securities of Isola Group S.a.r.l, including the common shares and convertible
preferred certificates, will be contributed by TPG to Isola Group Ltd., which will result in Isola Group Ltd. becoming our new holding company and Isola Group S.a.r.l. becoming a
subsidiary of Isola Group Ltd. The unaudited pro forma basic and diluted net income (loss) per share for the year ended January 1, 2011 reflects the effective conversion of all
outstanding common stock and convertible preferred certificates into ordinary shares of Isola Group Ltd. as though the conversion had occurred as of the beginning of the period or the original
date of issuance, if later. In addition, the pro forma amounts give effect to the termination of all outstanding stock-based awards associated with TPG and the replacement of such awards with awards
of Isola Group Ltd., with substantially the same terms, as of the beginning of the period. The unaudited pro forma basic and diluted net income (loss) per share has been presented in accordance
with SEC Staff Accounting Bulletin Topic I.B.3. The numerator in the pro forma basic and diluted net income (loss) per share calculation has been adjusted (i) to remove gains and losses
resulting from the change in fair value of the embedded derivative liability related to the CPCs, (ii) to remove accreted interest expense related to the CPCs, and (iii) to remove
foreign exchange gains and losses related to the CPCs and the associated embedded derivative liability.
F-54
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 1, 2011 and December 26, 2009, and for the fiscal years ended
January 1, 2011, December 26, 2009, and December 27, 2008
The
following table summarizes the computation of pro forma basic and diluted EPS for the fiscal year ended January 1, 2011
January 1,
2011
(In thousands, except for share and per share data)
Net income / (loss)—basic
Pro forma adjustments
Accreted interest on CPCs and amortization of discount
Embedded derivative gain / (loss)—CPCs
Foreign exchange (gain) loss
Net income / (loss) used to compute pro forma net income / (loss) per share
$
Weighted average ordinary shares outstanding—basic
Pro forma adjustments—basic
Assumed weighted-average effect of conversion of CPCs
Pro forma weighted average ordinary shares outstanding—basic
Pro forma net income / (loss) per ordinary share—basic
$
Pro forma weighted average ordinary shares outstanding—basic
Pro forma adjustments—diluted
Assumed issuance of stock options and restricted units in Isola Group Ltd.
Pro forma weighted average ordinary shares outstanding—diluted
Pro forma net income / (loss) per ordinary share—diluted
$
Pro forma net income / (loss) per share excludes stock-based awards
underlying                           ordinary shares of Isola Group Ltd. expected to be outstanding
subsequent to the Reorganization because their effect would have been anti-dilutive.
17. RESTRICTED NET ASSETS
As specified in the credit arrangements entered into by the Company and its wholly-owned subsidiary, Isola USA Corp, the Company is required to
maintain certain financial and operating covenants (See Note 4 to the consolidated financial statements). As a result of these covenants, the Company's subsidiaries are restricted in their
ability to provide any dividends, loans or advances to the Parent Company, with the exception of limited circumstances, such as payments of regular management fees and
out-of-pocket expenses, which are not to exceed certain dollar limits, and pursuant to a management services agreement entered into with a related party, as well as certain
transactions in the ordinary course of business and consistent with past practices. As of January 1, 2011, the balance of the Subsidiary's restricted net assets amounted to $159.0 million,
representing 94.1% of total consolidated net assets excluding subsidiaries with net liabilities.
******
F-55
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of July 2, 2011 and January 1, 2011
Pro forma
July 2,
2011
July 2,
2011
January 1,
2011
(unaudited)
(unaudited)
(Note 1)
(In thousands, except for share data)
ASSETS
CURRENT ASSETS:
Cash
$
56,010
$
36,733
Restricted cash
5,461
Accounts receivable, net of allowance for doubtful accounts of $3,837 and $3,896 at July 2, 2011 and January 1, 2011, respectively
118,304
103,489
Other receivables
2,294
2,739
Inventories
43,118
45,066
Deferred tax assets
2,783
2,697
Prepaid expenses and other current assets
6,028
5,023
Total current assets
228,537
201,208
RESTRICTED CASH
1,957
1,886
PROPERTY, PLANT, AND EQUIPMENT—Net
139,586
139,597
INTANGIBLE ASSETS—Net
6,796
7,421
DEFERRED TAX ASSETS
7,883
7,747
DEBT ISSUANCE COSTS AND OTHER ASSETS
17,607
19,335
TOTAL ASSETS
$
0
$
402,366
$
377,194
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
CURRENT LIABILITIES:
Accounts payable
$
80,644
$
70,156
Short-term debt and current portion—long-term debt
15,017
21,084
Accrued liabilities
52,396
38,964
Deferred tax liabilities
293
277
Other current liabilities
892
1,122
Total current liabilities
149,242
131,603
LONG-TERM DEBT—Net of current portion
304,168
292,079
CONVERTIBLE PREFERRED CERTIFICATES
224,679
199,136
CAPITAL LEASE OBLIGATIONS—Net of current portion
15,616
14,468
EMBEDDED DERIVATIVE
54,087
66,395
PENSION AND OTHER RETIREMENT BENEFITS
41,670
42,532
UNCERTAIN TAX POSITIONS AND OTHER LIABILITIES
25,306
23,446
DEFERRED TAX LIABILITIES
5,492
5,099
Total liabilities
820,260
774,758
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDER'S DEFICIENCY:
Common stock, 25 Euro par value ($31)—500 shares authorized, issued, and outstanding
15
15
Additional paid-in capital
31,864
30,652
Accumulated deficit
(413,709
)
(394,602
)
Accumulated other comprehensive loss
(36,064
)
(33,629
)
Total stockholder's deficiency
0
(417,894
)
(397,564
)
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY
$
0
$
402,366
$
377,194
See accompanying notes to condensed consolidated financial statements (unaudited).
F-56
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the six months ended July 2, 2011 and June 26, 2010
Six months ended
July 2, 2011
June 26, 2010
(In thousands, except for share and per share data)
REVENUES
$
316,583
$
306,957
COST OF GOODS SOLD
240,433
231,908
GROSS PROFIT
76,150
75,049
OPERATING EXPENSES
Sales, general, and administrative
38,371
31,343
Research and development
5,193
4,817
Restructuring
177
3,464
Total operating expenses
43,741
39,624
OPERATING INCOME
32,409
35,425
OTHER INCOME—Net
1,031
3,005
EMBEDDED DERIVATIVE GAIN / (LOSS)
17,472
(58,162
)
INTEREST EXPENSE
(39,032
)
(26,997
)
INTEREST INCOME
94
159
FOREIGN EXCHANGE GAIN / (LOSS)—Net
(20,402
)
27,863
LOSS BEFORE INCOME TAXES
(8,428
)
(18,707
)
PROVISION FOR INCOME TAXES
(10,679
)
(11,818
)
NET LOSS
$
(19,107
)
$
(30,525
)
NET LOSS PER COMMON SHARE:
Basic
$
(38.21
)
$
(61.05
)
Diluted
$
(38.21
)
$
(61.05
)
WEIGHTED AVERAGE NUMBER OF COMMON AND POTENTIAL COMMON SHARES OUTSTANDING:
Basic
500
500
Diluted
500
500
PRO FORMA NET LOSS PER SHARE (unaudited)
ORDINARY SHARE:
Basic
$
Diluted
$
WEIGHTED AVERAGE NUMBER OF ORDINARY AND POTENTIAL ORDINARY SHARES USED IN COMPUTING PRO FORMA NET LOSS PER SHARE:
Basic
Diluted
See accompanying notes to condensed consolidated financial statements (unaudited).
F-57
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER'S DEFICIENCY AND COMPREHENSIVE LOSS (UNAUDITED)
For the six months ended July 2, 2011
Common stock
Additional
paid-in
capital
Accumulated
other
comprehensive
loss
Total
stockholder's
deficiency
Accumulated
deficit
Shares
Amount
(In thousands, except for share data)
BALANCE—January 1, 2011
500
$
15
$
30,652
$
(394,602
)
$
(33,629
)
$
(397,564
)
Stock-based compensation
1,212
1,212
Comprehensive loss:
Net loss
(19,107
)
(19,107
)
Other comprehensive loss after tax:
Foreign currency translation loss
(2,333
)
(2,333
)
Changes in unamortized benefit plan costs
(102
)
(102
)
Total comprehensive loss
(21,542
)
BALANCE—July 2, 2011
500
$
15
$
31,864
$
(413,709
)
$
(36,064
)
$
(417,894
)
(concluded)
See
accompanying notes to condensed consolidated financial statements (unaudited).
F-58
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the six months ended July 2, 2011 and June 26, 2010
Six months ended
July 2,
2011
June 26,
2010
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(19,107
)
$
(30,525
)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization
8,683
8,464
Provision of doubtful accounts
(265
)
(314
)
Change in fair value of derivatives
(17,472
)
58,339
Foreign currency translation
19,874
(27,939
)
Amortization of debt issuance costs
1,028
618
Accreted interest on debt and amortization of discount
12,211
Accreted interest on convertible preferred certificates and amortization of discount
7,750
4,748
Stock-based compensation expense
1,212
803
Gain on dispositions
(5
)
(302
)
Change in operating assets and liabilities:
Accounts receivable
(12,974
)
(33,933
)
Other receivables
484
(3,135
)
Inventories
2,916
(13,262
)
Prepaid expenses and other current assets
(964
)
(1,091
)
Debt issuance costs and other assets
761
61
Accounts payable
8,983
24,837
Accrued liabilities
12,366
34,798
Other current liabilities
(167
)
1,298
Pension and other postretirement employee benefits
(1,541
)
(525
)
Uncertain tax positions and other liabilities
(47
)
786
Net cash provided by operating activities
23,726
23,726
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from release of restricted cash
5,479
2,390
Payments for acquisition of property, plant and equipment
(4,798
)
(4,236
)
Proceeds from dispositions
392
308
Net cash provided by / (used in) investing activities
1,073
(1,538
)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt
4,027
(73
)
Payments of debt
(10,462
)
0
Payments of capital leases
(261
)
(413
)
Net cash used in financing activities
(6,696
)
(486
)
EFFECT OF EXCHANGE RATES ON CASH
1,174
(2,452
)
NET INCREASE IN CASH
19,277
19,250
CASH—Beginning of period
36,733
38,932
CASH—End of period
$
56,010
$
58,182
F-59
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)
For the fiscal six months ended July 2, 2011 and June 26, 2010
Six months ended
July 2,
2011
June 26,
2010
(In thousands)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash payments during the period for:
Interest
$
18,563
$
1,159
Income taxes
$
5,042
$
7,093
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING TRANSACTIONS:
Acquisition of fixed assets with a corresponding increase in accounts payable
$
562
$
1,142
See accompanying notes to condensed consolidated financial statements (unaudited).
F-60
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
As of July 2, 2011 and for the six months ended July 2, 2011
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
—Isola Group, S.a.r.l. (the "Company") is a holding company incorporated in Luxembourg whose subsidiaries manufacture and sell laminate products
across Europe, Asia, and the United States of America. Corporate headquarters are located in Chandler, Arizona. The Company is a wholly owned subsidiary of TPG Hattrick Partners, L.P. ("TPG" or
the "sole stockholder").
The
Company and certain of its subsidiaries were incorporated by TPG. TPG is a U.S. based limited partnership that was originally funded through cash investments by two Texas Pacific Group private
equity funds and by Redfern Partners, which is an affiliate of Insulectro, one of the Company's largest customers (see Note 11).
Reorganization
—On September 20, 2011, TPG formed a new company, Isola Group Ltd., in the Cayman Islands. Isola Group Ltd. has been authorized by its
board of directors to file a Registration Statement with the Securities and Exchange Commission ("SEC") permitting it to sell its ordinary shares in an initial public offering ("IPO"). Prior to the
IPO the Company will undergo a corporate reorganization that will include the following steps:
–>
all
of the outstanding securities of the Company, including common shares and convertible preferred certificates, will be contributed by TPG to Isola
Group Ltd., which will result in Isola Group Ltd. becoming our new holding company and the Company becoming a subsidiary of Isola Group Ltd.;
–>
TPG,
and TPG's general partner, TPG Hattrick Holdco, LLC, will be liquidated and the ordinary shares of Isola Group Ltd. will be distributed to their
sponsors; and
–>
all
outstanding stock-based awards associated with TPG will be terminated and replaced with new options and restricted units of Isola Group Ltd.
Collectively
we refer to the above transactions as the Reorganization. The pro forma impact of the Reorganization is discussed further below and in Note 13 to the condensed consolidated
financial statements.
Unaudited Pro Forma Balance Sheet
—The unaudited pro forma balance sheet gives effect to the Reorganization as if it had occurred on July 2, 2011.
Accordingly, it reflects the conversion of all outstanding common stock and convertible preferred certificates of the Company into ordinary shares of Isola Group Ltd. Additionally, the
unaudited pro forma balance sheet reflects the elimination of the embedded derivative liability associated with the convertible preferred certificates. The pro forma earnings per share impact of the
Reorganization is discussed further in Note 13 to the condensed consolidated financial statements.
Basis of Presentation and Consolidation
—The condensed consolidated financial statements consist of the accounts of the Company and subsidiaries, and reflect the
Company's financial position as of July 2, 2011 and January 1, 2011, and results of operations and cash flows for the six months ended July 2, 2011 and June 26, 2010. The
condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). All intercompany balances and transactions have
been eliminated. The Company operates on either a 52- or 53-week fiscal year that ends on the Saturday closest to December 31. Both of the six month periods ended
July 2, 2011 and June 26, 2010 consisted of 26 weeks.
F-61
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
These
condensed consolidated financial statements are unaudited and should be read in conjunction with the Company's historical annual audited consolidated financial statements and accompanying notes
thereto. In the opinion of management, all adjustments, consisting of normal recurring adjustments, and considered necessary for a fair presentation, have been included in the condensed consolidated
financial statements. The results of operations for the six-month period ended July 2, 2011 are not necessarily indicative of the operating results that may be expected for the full
fiscal year ending December 31, 2011 or any future period. The condensed consolidated balance sheet at January 1, 2011 was derived from the audited consolidated financial statements at
that date
but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
Events
that occurred after July 2, 2011 and through October 31, 2011, the date these financial statements were available to be issued, were considered in the preparation of these
financial statements.
Use of Estimates and Assumptions
—The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting year. Significant items subject to such estimates and assumptions include, but are not limited to, the useful lives of fixed assets and definite lived intangible assets,
allowances for doubtful accounts, the valuation of derivative instruments, the valuation of deferred tax assets, the initial and recurring valuation of certain assets acquired through business
combinations (including goodwill and indefinite lived intangible assets), stock-based compensation, reserves for employee benefit obligations, income tax uncertainties and other contingencies. Actual
results could differ from these estimates under different assumptions or conditions.
Foreign Currency Transactions and Translation
—The Company's functional currency and reporting currency is the U.S. dollar. Gains and losses from foreign currency
transactions are included in the condensed consolidated statement of operations in the period they occur. Foreign currency transaction gains and losses, unrealized translation gains and losses
associated with certain foreign subsidiaries with a U.S. dollar functional currency that maintain their books of records in a currency other than the U.S dollar and unrealized translation gains and
losses on short-term intercompany and operating receivables and payables denominated in a currency other than the functional currency are included in foreign exchange gain / (loss) in the
condensed consolidated statement of operations.
For
the purposes of presenting condensed consolidated financial statements, the assets and liabilities of the Company's foreign operations where the local currency is also the functional currency are
translated into U.S. dollars using exchange rates prevailing at the end of each reporting period. Revenue and expense items are translated at the average exchange rates for the period. Exchange
differences arising, if any, are recognized as foreign currency translation gains or losses in other comprehensive loss on the condensed consolidated balance sheet.
Cash Equivalents and Restricted Cash
—The Company considers all highly liquid debt investments with a maturity of three months or less when purchased to be cash
equivalents. These
investments are stated at cost, which approximates market value. Noncurrent restricted cash primarily relates to support letters of credit and retirement obligations in Germany and restricted cash in
current assets on the condensed consolidated balance sheet represents bank balances pledged as collateral, primarily for an entrustment loan held by the Company's subsidiary in Dalian, China. The loan
was denominated in Chinese Renminbi (see Note 4).
F-62
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
Accounts Receivable
—The Company's accounts receivable are recorded at cost on the condensed consolidated balance sheet, net of allowances. Credit is extended based
on an evaluation of the customer's financial condition. Generally, collateral is not required. Credit risk associated with the Company's accounts receivable is mitigated by ongoing credit evaluations
of and frequent contact with customers, especially the most significant customers, which enables the Company to monitor changes in its customers' business operations and respond accordingly. The
Company estimates credit risk associated with accounts receivable by analyzing the creditworthiness of its customers based on past experience, changes in customer demand, as well as the general
economy and the industry as a whole.
Allowance for Doubtful Accounts
—The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In
establishing the required allowance, management considers historical losses, current receivables aging, general and specific economic conditions, and local market conditions. The Company reviews its
allowance for doubtful accounts monthly. Past due balances meeting certain criteria are reviewed individually for collectability. All other balances are reviewed on a pooled basis. Account balances
are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet
credit exposure related to its customers.
Inventories
—Inventories include the cost of materials, direct labor, and related manufacturing overhead and are stated at the lower of cost (computed using the
first-in, first-out method) or market. The Company adjusts inventory for estimated obsolescence or excess quantities based upon assumptions about future demand and market
conditions.
Property, Plant, and Equipment
—Property, plant, and equipment obtained through
acquisitions are recorded at fair value. All other property, plant, and equipment acquisitions are recorded at cost. Provisions for depreciation are calculated using the straight-line
method over the following estimated useful lives of the assets:
Years
Buildings and improvements
15–40
Machinery and equipment
2–15
Assets held under capital leases are depreciated over their expected useful lives on the same basis as owned assets. If there is not reasonable certainty that
the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the lease term or its estimated useful life. Leasehold improvements are depreciated over
the estimated useful life of the related asset, or over the term of the lease, whichever is shorter.
Long-lived Assets
—The Company reviews long-lived assets such as property, plant, and equipment, and acquired intangible assets subject to
amortization for impairment whenever events and circumstances indicate that the carrying amount may not be recoverable. In performing the review for recoverability, the Company estimates the future
undiscounted cash flows expected to result from the use of the assets and their eventual disposition in accordance with Accounting Standards Codification ("ASC") Property, Plant and Equipment ("ASC
360"). If an asset were deemed impaired, the amount of the impairment loss would be calculated based on the excess of the carrying amount of the asset over the estimated fair value. Fair value is
determined through various valuation techniques including discounted cash flow models, market comparables and other information, as considered necessary. Impairment losses are recorded to expense in
F-63
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
the
period in which they are identified. The estimation of future cash flows requires significant estimates of factors that include future sales growth and gross margin performance. If the Company's
sales growth, gross margin performance or other estimated operating results are not achieved at or
above their forecasted level, the carrying value of asset groups may prove to be unrecoverable and the Company may incur impairment charges in the future.
Intangible
assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was $0.6 million for the six months ended both July 2, 2011
and June 26, 2010.
Debt Issuance Costs and Discounts
—Debt issuance costs and discounts are capitalized and are amortized over the term of the related debt using the effective interest
method. Upon the extinguishment of the related debt, any unamortized debt issuance costs and discounts are immediately expensed. Unamortized debt issuance costs were $17.4 million and
$18.3 million at July 2, 2011 and January 1, 2011, respectively, and are included in other assets in the condensed consolidated balance sheets. Amortization of debt discounts is
discussed further in Note 4.
Fair Value Measurements
—The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the
financial statements on a recurring or nonrecurring basis. Fair value is defined as the amount that would be received from selling an asset or the amount that would be paid to settle a liability in an
orderly transaction between willing market participants in the primary or most advantageous market for that asset or liability.
The
Company's financial instruments that are recognized and disclosed at fair value on a recurring basis are comprised primarily of derivative instruments, which include interest rate swaps and
embedded derivative instruments. The Company accounts for derivative instruments in accordance with the provisions of ASC 815,
Derivative Instruments and Hedging
Activities
("ASC 815"). ASC 815 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in
other contracts and hedging activities. ASC 815 requires the Company to record derivatives at their fair value on the balance sheet. At July 2, 2011 and January 1, 2011, the Company had
embedded derivatives in its convertible preferred certificates (see Note 5) and in its senior and mezzanine credit agreements (see Note 4). Changes in the fair value of these embedded
derivatives are recorded in the condensed consolidated statement of operations.
Certain
non-financial assets and liabilities are measured at fair value on a non-recurring basis, including property, plant, and equipment, goodwill, and intangibles assets.
These assets are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. A description of the valuation methodologies used for assets and liabilities
measured at fair value, including the general classification of such assets and liabilities pursuant to the valuation hierarchy is included in each footnote with fair value measurement present.
The
Company's principal financial instruments are cash, trade receivables, bank lines of credit, short-term bank debt, trade payables and other accrued liabilities, long-term
debt, including CPCs, and derivative instruments. With the exception of the Company's derivative instruments, which are recorded at fair value, and the Company's long-term debt and CPCs,
the carrying value of these financial instruments approximate fair values either because of the short maturities of these instruments, or because the interest rates are based upon variable reference
rates. The fair value of the Company's long-term debt is computed based upon interest rates of similar debt instruments. The Company engaged a third party consultant to assist in the
determination of the estimated fair value of the Company's long-term debt and CPCs.
F-64
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
See
Note 5, Convertible Preferred Certificates, for further discussion regarding the Company's process for estimating fair value with respect to the CPCs.
The
carrying value and the fair value of the Company's long-term debt and CPCs are as follows (in thousands):
July 2, 2011
January 1, 2011
Long-term debt:
Carrying value
$
304.2
$
292.1
Fair value
$
337.7
$
331.8
Convertible preferred certificates:
Carrying value
$
224.7
$
199.1
Fair value
$
224.0
$
161.2
Accounting for Income Taxes
—The Company accounts for income taxes recorded in interim periods in accordance with ASC 740, Income Taxes ("ASC 740") where the income
tax provision is recorded based on an estimated annual effective tax rate applied to pre-tax net income, adjusted for discrete items that occurred during the period. The Company does not
adjust deferred tax assets and liabilities in interim periods.
The
Company follows ASC 740-10,
Income Taxes
("ASC 740-10"), which clarifies the accounting for uncertainty in income taxes
recognized in the financial statements. ASC 740-10 provides that a tax benefit from an uncertain tax position may be recognized based on the technical merits when it is more likely than
not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes. Income tax positions must meet a more likely than not recognition
threshold at the effective date to be recognized upon the adoption of ASC 740-10 and in subsequent periods. This standard also provides guidance on measurement, derecognition,
classification, interest and penalties, accounting in interim periods, disclosure and transition.
The
Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense.
Pension Plans
—The Company sponsors several pension plans that include qualified, noncontributory nonunion pension plans for certain salaried and hourly employees,
and bargaining unit pension plans covering retirees and vested former employees of the Company. The Company uses a December 31 measurement date for its pension and other postretirement employee
benefit plans. The U.S. pension plans were frozen and curtailed prior to the 2004 acquisition of the Company.
Revenue Recognition
—Revenue is recognized and earned when all of the following criteria are satisfied: (a) persuasive evidence of a sales arrangement exists;
(b) price is fixed or determinable; (c) collectability is reasonably assured; and (d) title and the risks and rewards of ownership have substantially transferred to the customer.
For the majority of the Company's sales transactions, revenue is recognized upon shipment of the finished product. Some shipping terms require the goods to be received by the customer before title
passes. In those instances, revenue is not recognized until the customer has received the goods. The Company's sales arrangements do not provide for post-shipment obligations.
F-65
Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
Shipping and Handling Costs
—The Company classifies shipping and handling costs as a part of cost of goods sold. Amounts billed to customers for shipping and
handling costs are included in revenues.
Certain Risks and Concentrations
—Cash is maintained with several financial institutions. Deposits held with banks can exceed the amount of insurance provided on
such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear minimal credit risk. The Company maintains
its primary cash accounts with established banking institutions around the world. The Company estimates that approximately $34.1 million of these deposits were not insured by the Federal
Deposit Insurance Corporation or similar entities outside of the United States as of July 2, 2011.
The
Company sells a significant amount of its products through intermediaries, such as distributors. Revenue from sales to distributors represented 9.5% and 10.5% of total revenues for six months
ended July 2, 2011 and June 26, 2010, respectively. If one of the Company's significant distributors terminates its distribution agreement, the Company could experience a significant
interruption in the distribution of its products.
Concentration
of credit risk with respect to the Company's trade receivables is limited by an ongoing credit evaluation process and the geographical dispersion of sales transactions. Collateral is
generally not required from the Company's customers. The allowance for doubtful accounts is based upon the expected collectability of all trade receivables. The Company had two customers that
accounted for 30.3% of the outstanding receivables at July 2, 2011 and two customers that accounted for 27.6% of the outstanding trade receivables at January 1, 2011. The Company also
had one customer that accounted for 12.5% and 12.8% of revenues for the six months ended July 2, 2011 and June 26, 2010, respectively.
Contingencies
—The Company is subject to a range of claims, lawsuits and administrative proceedings that arise in the ordinary course of business. The Company
accrues a liability and charges expense on the statement of operations for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated, in accordance
with the recognition criteria of ASC Topic 450,
Contingencies
("ASC 450"). Estimating liabilities and costs associated with these matters requires
significant judgment and assessment based upon the professional knowledge and experience of management and its legal counsel.
Stock-based Compensation
—Effective January 1, 2006, the Company adopted the fair value method of accounting for stock-based compensation to employees in
accordance with ASC 718,
Compensation—Stock Compensation
("ASC 718"). Under the fair value recognition provisions of ASC 718, the Company
recognizes stock-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award. The fair value method requires companies to estimate the fair value of
stock-based payment awards on the grant date using an option pricing model. The Company adopted the fair value method using the prospective method which requires nonpublic entities that used the
minimum-value method for either pro forma or financial statement recognition purposes to apply the fair value method to stock-based awards issued on and after the date of adoption. Prior to the
adoption of the fair value method, the Company accounted for stock-based compensation using the minimum-value method for financial statement recognition purposes. For awards that have not yet vested
but were granted prior to the adoption of the fair value method, the Company continues to recognize stock-based compensation expense under the minimum value method. In addition, the Company continues
to amortize any stock-based compensation from awards granted prior to January 1, 2006 and stock-based compensation from awards granted or modified after January 1, 2006 on a
straight-line basis over the service period. The Company has elected to
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
use
the "with and without" approach in determining the order in which tax attributes are utilized. As a result, the Company will only recognize a tax benefit from stock-based awards in additional
paid-in capital if an incremental tax benefit is realized after all other tax attributes currently available to the Company have been utilized. For the six months ended July 2, 2011
and June 26, 2010, the Company incurred stock-based compensation expense of $1.2 million and $0.8 million, respectively.
On
January 22, 2011, the Company granted 96,100 options to purchase partnership units in the sole stockholder of the Company. These options have an exercise price of $0.49 per unit and a grant
date fair value of $0.64 per unit. The options vest annually on the anniversary of the grant date over a three year period and bear a ten year contractual life.
On
January 22, 2011, the Company also granted 54,700 restricted partner units in the limited partner common units of the sole stockholder of the Company. These restricted units have a grant
date fair value of $0.83 per unit and vest annually on the anniversary of the grant date over a three year period.
Accumulated Other Comprehensive Loss
—As of July 2, 2011, the Company's accumulated other comprehensive loss consisted of a cumulative foreign currency
translation loss of $14.5 million, a cumulative loss related to foreign currency impact from changes in uncertain tax positions of $0.9 million, and a cumulative loss from minimum
pension liability adjustments of $20.6 million, which is net of tax effect of $0.4 million. As of January 1, 2011, the Company's accumulated other
comprehensive loss consisted of a cumulative foreign currency translation loss of $12.2 million, a cumulative loss related to foreign currency impact from changes in uncertain tax positions of
$0.9 million, and a cumulative loss from minimum pension liability adjustments of $20.5 million, which is net of tax effect of $0.4 million.
Recent Accounting Pronouncements
—Changes to generally accepted accounting principles are established by the Financial Accounting Standards Board ("FASB") in the
form of accounting standards updates ("ASUs") to the FASB's Accounting Standards Codification.
The
Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or not expected to have minimal impact on the Company's
consolidated financial position and results of operations.
In
June 2011, the FASB issued an amendment to the existing guidance on the presentation of comprehensive income. Under the amended guidance, entities have the option to present the components of net
income and other comprehensive income in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Entities no longer have the option of presenting
the components of other comprehensive income within the statement of changes in stockholders' equity. This amendment is effective on a retrospective basis for interim and annual periods beginning
after December 15, 2011, which for the Company begins with the first quarter of 2012. The adoption of this amendment will result in a change to the Company's current presentation of
comprehensive income, but will not have any impact on the Company's consolidated financial position or results of operations.
Standards Issued but Not Yet Effective
—Other new pronouncements issued but not effective until after July 2, 2011 are not expected to have a material impact
on the Company's consolidated financial statements.
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
2. SELECTED CONDENSED CONSOLIDATED BALANCE SHEET DISCLOSURES
The following tables provide details of selected condensed consolidated balance sheet items at July 2, 2011 and January 1, 2011 (in
millions):
July 2, 2011
January 1, 2011
Inventories:
Raw materials
$
21.0
$
24.5
Work in process
9.0
6.7
Finished goods
13.1
13.9
Total inventories
$
43.1
$
45.1
Property, plant, and equipment:
Land
$
29.7
$
28.8
Buildings and improvements
53.3
49.8
Machinery and equipment
153.4
143.8
Construction in progress
4.6
8.6
Total property, plant, and equipment
241.0
231.0
Less accumulated depreciation
101.4
91.4
Total property, plant, and equipment—net
$
139.6
$
139.6
Accrued liabilities:
Personnel related
$
17.0
$
15.5
Operating expenses
13.1
11.4
Tax
17.5
9.7
Management fees
1.1
1.0
Interest
0.4
0.5
Other
3.3
0.9
Total accrued liabilities
$
52.4
$
39.0
The Company capitalized interest expense incurred during the construction period for capital projects, primarily new machinery and equipment. Interest
capitalized during the six months ended July 2, 2011
and June 26, 2010 was $0.4 million and $0.3 million, respectively. Capitalized interest is included in property, plant, and equipment in the condensed consolidated balance sheets.
Depreciation
expense for the six months ended July 2, 2011 and June 26, 2010, was approximately $8.1 million and $7.9 million, respectively.
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
3. INTANGIBLE ASSETS
Intangible
assets consist of the following (in millions):
July 2, 2011
Weighted
average
estimated
useful life
Gross amount
Accumulated
amortization
Net amount
Patented Technology
10 years
$
9.9
$
(5.5
)
$
4.4
Customer Relationship
11 years
6.9
(4.8
)
2.1
Trade Name
11 years
0.9
(0.6
)
0.3
$
17.7
$
(10.9
)
$
6.8
January 1, 2011
Weighted
average
estimated
useful life
Gross amount
Accumulated
amortization
Net amount
Patented Technology
10 years
$
9.9
$
(5.0
)
$
4.9
Customer Relationship
11 years
6.9
(4.7
)
2.2
Trade Name
11 years
0.9
(0.6
)
0.3
$
17.7
$
(10.3
)
$
7.4
The following is a schedule of expected amortization for the intangible assets for the remainder of fiscal year 2011 through fiscal year 2016 (in millions):
2011 (remaining six months)
$
0.6
2012
1.2
2013
1.2
2014
1.2
2015
0.8
2016
0.8
Amortization expense attributed to intangible assets was $0.6 million for the six months ended both July 2, 2011 and June 26, 2010.
Amortization is included in sales, general, and administrative expense on the condensed consolidated statement of operations. The Company found no indication of impairment of its intangible assets in
fiscal year 2010 through the six months ended July 2, 2011.
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
4. DEBT
Debt at July 2, 2011 and January 1, 2011, consists of the following (in millions):
July 2, 2011
January 1, 2011
Senior notes payable—secured, related party, net of unamortized discount of $25.3 million and $27.5 million at July 2 and
January 1, 2011, respectively
$
184.7
$
182.5
Subordinated notes payable—unsecured, related party, net of unamortized discount of $66.2 million and $69.0 million as of July 2 and
and January 1, 2011, respectively
119.5
109.6
Other debt—unsecured
15.0
15.6
Entrustment loan
—
5.5
Total debt outstanding
319.2
313.2
Current portion long-term debt
(15.0
)
(21.1
)
Total long-term debt
$
304.2
$
292.1
The Company is required to make debt service payments under the terms of its debt arrangements. The obligated debt payments for the remaining six months of 2011
are $11.4 million. Future obligated debt payments are $3.6 million in 2012, $210.0 million in 2015 and $185.7 million in 2016.
New Credit Arrangements
—On September 30, 2010, the Company entered into a series of financing transactions including a senior secured credit agreement and a
mezzanine credit agreement, each entered into with a syndicate of lenders, the majority of which are partial owners in an entity that is the Company's sole stockholder (collectively "the New Credit
Arrangements"), as well as the issuance of 43,500,666 Class C CPCs issued to the Company's sole stockholder (collectively "the Financing Transaction"). The Company received
$376.4 million in aggregate proceeds in connection with the Financing Transaction. At the time of issuance, the total proceeds were allocated among the instruments issued based upon the
relative fair value of each instrument, as follows:
As of
September 30,
2010
Senior notes payable
$
181.5
Embedded derivative—senior notes payable
1.1
Subordinated notes payable
104.6
Embedded derivative—subordinated notes payable
8.1
Convertible preferred certificates—Class C (Note 5)
24.8
Embedded derivative—convertible preferred certificates—Class C (Note 5)
56.3
Total allocated value
$
376.4
The borrower under the New Credit Arrangements is the Company's wholly owned subsidiary, Isola USA Corp. The principal terms of each credit arrangement are
described below. The Class C CPCs are discussed in Note 5.
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
Senior Secured Credit Agreement
The senior secured credit agreement consists of $210.0 million senior notes ("Senior Notes"), the full amount of which was drawn at closing on
September 30, 2010. The proceeds were used to refinance part of the then-existing debt, as well as to pay other fees and expenses related to the Senior Notes. The Senior Notes are
secured by a first priority lien on substantially all of the assets of the Company, including a pledge of all of the equity interests of each domestic subsidiary and 65% of the equity interests of the
first-tier foreign subsidiaries. The Company's other secured and unsecured obligations are subordinated in priority to payment of the Senior Notes.
The
Company makes elections as to the interest period term which can be one, two, three, or six months in length. The Company also makes elections as to the loan type on which the interest is based.
The Company can elect a Eurodollar Loan or an ABR Loan or a combination of the two. Eurodollar Loans accrue interest at a rate of LIBOR (with a minimum base rate of 2.0%) plus 8.0%. Eurodollar loan
interest is payable on the last day of the period term elected, provided, in the case of an interest period longer than 3 months, payments shall be due no more than 3 months after the
commencement of the interest period term. ABR Loans accrue interest at a base rate plus 7%. The base rate is defined as the greater of the Prime Rate as identified and published in the Wall Street
Journal or the Federal Funds Effective Rate as published by the Federal Reserve Bank of New York, on the date of election, plus
1
/
2
of 1%. The base rate is to be a minimum of 3.0%. ABR
loan interest is payable March 31, June 30, September 30, and December 31 of each year. As of July 2, 2011, the Company had elected Eurodollar loans for all Senior
Notes, which were accruing interest at the rate of 10.0%, which is equal to the minimum LIBOR rate of 2.0% plus 8.0%.
The
Senior Notes are due in full on September 30, 2015. Voluntary early payments are allowed but payments made prior to the first anniversary date are required to be made at 102% of the
principal amount and payments made subsequent to the first anniversary date but prior to the second anniversary date are required to be made at 101% of the principal amount. Payments made subsequent
to the second anniversary date shall be made at par value of the outstanding debt. The Company is obligated to make prepayments against the Senior Notes resulting from the following transactions or
events as defined in the Senior Notes agreements:
–>
100%
of proceeds from the sale of assets not reinvested in long-term productive assets within one year of the receipt of the sale proceeds, not to exceed
$5.5 million in any fiscal year;
–>
100%
of net insurance/condemnation proceeds in excess of $0.1 million for any casualty event and in excess of $1.0 million for all casualty events in
any fiscal year which are not reinvested in long-term productive assets or used to repair, restore, or replace the assets subject to the applicable casualty event or events within one year
of the receipt of the net proceeds;
–>
net
proceeds of equity issuances by Isola Group S.a.r.l. in an aggregate amount of 75% of such proceeds provided that if, as of the last day of the most
recently ended fiscal quarter, the senior secured leverage ratio shall be 2.50:1.00 or less but greater than 2.00:1.00, the amount shall be reduced to an aggregate amount equal to 50% of such
proceeds, and provided that if, as of the last day of the most recently ended fiscal quarter, the senior secured leverage ratio shall be 2.00:1.00 or less, the amount shall be reduced to an aggregate
amount equal to 25% of such proceeds;
–>
100%
of net proceeds from the incurrence of any indebtedness by Isola Group S.a.r.l. and its subsidiaries not otherwise permitted by the Senior Notes
agreements;
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
–>
75%
of consolidated excess cash flow, provided, that if, as of the last day of the most recently ended fiscal year, the senior secured leverage ratio shall be
2.0:1.0 or less, the amount shall be reduced to 50% of consolidated excess cash flow.
The
Senior Notes were issued at a discount of $28.5 million on September 30, 2010. As of July 2, 2011, there was $210.0 million outstanding principal and
$25.3 million of unamortized discount resulting in a net balance of $184.7 million in the condensed consolidated balance sheet. As of January 1, 2011, there was
$210.0 million of outstanding principal and $27.5 million of unamortized discount resulting in a net balance of $182.5 million in the condensed consolidated balance sheet.
Mezzanine Credit Agreement
The mezzanine credit agreement consists of $175.0 million unsecured notes ("Subordinated Notes"), the full amount of which was drawn at
closing on September 30, 2010. The proceeds were used to refinance part of the then-existing debt, as well as to pay other fees and expenses related to the Subordinated Notes. The
unsecured term loans issued pursuant to the Subordinated Notes agreements are subordinate and junior to the obligations owed under the senior secured credit agreement. Obligations under the mezzanine
credit agreement rank pari passu with the Company's other unsecured and unsubordinated obligations.
The
unsecured term loans under the mezzanine credit agreement bear interest at a rate of 16.0% per annum, with half (8.0% per annum) payable in cash on March 31, June 30,
September 30, and December 31 of each year until maturity and half (8.00% per annum) accreting on the outstanding principal amount of the unsecured term loans, due at maturity. The
Subordinated Notes are due in full on March 24, 2016. Voluntary early payments are allowed subject to the prior discharge of the senior secured credit agreement obligations (except as otherwise
permitted pursuant to the applicable senior secured credit agreement). The Company is obligated to repay the Subordinated Notes in full along with any unpaid interest upon the occurrence of a "Change
in Control", as defined by the mezzanine credit agreement.
The
Subordinated Notes were issued at a discount of $70.4 million on September 30, 2010. As of July 2, 2011, there was $185.7 million of outstanding principal, which
consisted of $175.0 million in term loans and $10.7 million of accreted interest. As of January 1, 2011, there was $178.6 million of outstanding principal, which consisted
of $175.0 million in term loans and $3.6 million of accreted interest. The unamortized discount was $66.2 million and $69.0 million at July 2, 2011 and
January 1, 2011, respectively, resulting in a net balance of $119.5 million at July 2, 2011 and $109.6 million at January 1, 2011 in the condensed consolidated
balance sheet.
Embedded Derivative Liability
In accordance with ASC 815 the mandatory pre-payment features of the Senior and Subordinated Notes are considered embedded derivative
liabilities. The values related to the embedded derivative liabilities are recognized at fair value in the condensed consolidated balance sheet at each reporting period. At July 2, 2011 and
January 1, 2011, the determined fair value of the embedded derivative liabilities was $0.3 million and $5.9 million, respectively. Any change in fair value of the embedded
derivative liability is reflected in the condensed consolidated statement of operations. For the six-month period ended July 2, 2011, the Company's embedded derivative gain related
to the Senior and Subordinated Notes was a combined $5.6 million.
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Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
Covenants
The Company's New Credit Arrangements require it to maintain certain financial and operating covenants. The financial covenants include separate
ratios measuring both interest and secured debt against EBITDA, as defined in the New Credit Arrangements, as well as a limit on capital expenditures. The operating covenants impose limitations on
business decisions, including, but not limited to, the ability to (i) dispose of assets or stock; (ii) incur additional indebtedness and guarantee obligations; (iii) pay certain
dividends; (iv) create liens on assets; (v) make investments, loans or advances; (vi) restrict distributions to the borrowers or guarantors from its subsidiaries;
(vii) engage in mergers or consolidations; (viii) engage in certain transactions with affiliates; (ix) incur additional negative pledges; (x) incur capital expenditures;
(xi) change its fiscal year or accounting practices or the lines of business in which it and its subsidiaries are involved; (xii) enter into sale-leaseback transactions;
(xiii) prepay principal of, premium, or interest on, or redeem, purchase, retire, defease, or create a sinking fund or make a similar payment with respect to, any subordinated indebtedness and
certain other debt; (xiv) change the conduct of business; (xv) conduct activities of any parent holding company or (xvi) amend its organizational documents. The Company was in
compliance with these covenants as of July 2, 2011. The Company was required to file its annual financial statements by April 30, 2011. The Company was not in compliance with this
requirement and obtained a waiver of this covenant through September 30, 2011. The Company was in compliance after filing the audited financial statements on September 29, 2011.
Other Unsecured Debt
—The Company has two unsecured loan agreements from lenders in China that provide for a series of draw-downs as funds are required
at the stated rate ranging from 4.26% to 5.04% per annum. Each draw-down has a one year maturity and is renewable on an annual basis. The Company made draws and repayments on these
facilities and had combined outstanding balances of $15.0 million and $15.1 million at July 2, 2011 and January 1, 2011, respectively.
The
Company had an entrustment loan with $5.5 million outstanding at January 1, 2011. An entrustment loan is a means for one subsidiary to loan cash to another subsidiary with a bank
acting as the intermediary. This is accomplished by a lending subsidiary depositing cash into a bank (which is shown as restricted cash on the consolidated balance sheets) and then requesting the bank
to on-loan the cash to another subsidiary with the terms being specified by the subsidiary depositing the cash. The bank charges a minimal processing fee of 0.15% per annum of the
outstanding balance to provide the service.
Several
of the Company's subsidiaries have open letters of credit for the benefit of third-party vendors. The total letter of credit availability is $5.5 million and $2.1 million at
July 2, 2011 and January 1, 2011, respectively, of which $3.2 million and $1.1 million has been committed as of July 2, 2011 and January 1, 2011,
respectively. The letters of credit expire at various dates.
Several
of the Company's subsidiaries have entered into various lines of credit. These lines of credit provided total availability of $10.5 million and $5.4 million at July 2,
2011 and January 1, 2011, respectively. No balances were outstanding on these lines of credit as of either July 2, 2011 or January 1, 2011. $0.6 million was pledged as
guarantees in addition to the letters of credit as of July 2, 2011 and January 1, 2011, respectively, leaving total credit available under the lines of $6.7 million and
$4.8 million as of July 2, 2011 and January 1, 2011, respectively.
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Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
5. CONVERTIBLE PREFERRED CERTIFICATES
The Company has issued and outstanding three different classes of Convertible Preferred Certificates ("CPCs") as of July 2, 2011. The CPCs
have characteristics of both debt and equity, but are considered to be legal form debt instruments in Luxembourg, and thus are accounted for as debt. For each of the periods ended July 2, 2011
and January 1, 2011, the Company had 420,455 and 95,788,400 Class A and B CPCs authorized, issued and outstanding.
On
September 30, 2010, the Company entered into the Financing Transaction consisting of the issuance of 43,500,666 Class C CPCs and the New Credit Arrangements (see Note 4). The
Company received gross proceeds of $376.4 million in connection with the Financing Transaction which have been allocated among the instruments issued based upon the relative fair value of each
at the time of issuance.
In
valuing the CPCs, the Company used a methodology that is consistent with the methods outlined in the
AICPA Practice Aid Valuation of
Privately-Held-Company Equity Securities Issued as Compensation
. The enterprise value inputs associated with the Company's valuations were derived using
the income and market approaches. The income approach estimates the enterprise value of the Company by discounting the expected future cash flows of the Company to present value. Under the market
approach, the total enterprise value of the Company is estimated by comparing the Company's business to similar businesses whose securities are actively traded in public markets, or businesses that
are involved in a public or private transaction. The Company has selected valuation multiples derived from trading multiples of public companies that participate in the Company's industry. These
valuation multiples were then applied to the equivalent financial metric of the Company's business, giving consideration to differences between the Company and similar companies for such factors as
company size, leverage, and growth prospects.
The
Company prepared financial forecasts to be used in the computation of the enterprise value for the income approach. The financial forecasts took into account the Company's past experience and
future expectations. There is inherent uncertainty in these estimates. The risks associated with achieving the Company's forecasts were assessed in selecting the appropriate discount rates. If
different discount rates had been used, the valuations would have been different.
The
Company then allocated the resulting enterprise value among the instruments that comprise the Company's capital structure based upon rights and preferences of the instruments using the
Option-Pricing Method ("OPM"). Under the OPM, the Company allocated the value of the CPCs and common stock of the Company based on a series of call options, representing the present value of the
expected future returns for each instrument. The value of these options was estimated using the Black-Scholes option pricing model. The assumptions utilized in the model, including assumptions
associated with volatility, were consistent with those selected to value the options to purchase partnership units, as discussed in Note 9, as the Company's operations represent substantially
all of the net assets of the sole stockholder.
The
OPM involves making estimates of the anticipated timing of a potential liquidity event such as a sale of the Company or an initial public offering, and estimates of the volatility of the Company's
equity securities. The anticipated timing is based on the plans of the board and management. Estimating the volatility of the share price of a privately held company is complex because there is no
readily available market for the shares. The Company estimated the volatility of the stock based on available information on volatility of stocks of publicly traded companies in the industry. Had the
Company used different estimates of volatility, the allocations between common stock and CPCs would have been different.
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Table of Contents
ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
The
43,500,666 certificates of Class C CPCs carry an aggregate par value of 43.5 million Euro. There were no other CPC transactions during the periods ended July 2, 2011 and
January 1, 2011.
Convertible
preferred certificates liability at July 2, 2011 and January 1, 2011 consists of the following (in millions):
July 2,
2011
January 1,
2011
Outstanding Class A and B CPCs
$
139.5
$
128.2
Outstanding Class C CPCs
(1)
, net of unamortized discount of $36.7 and $33.8 million as of July 2 and and January 1, 2011,
respectively
26.5
24.3
Accrued interest:
Class A and B CPCs
55.6
45.7
Class C CPCs
3.1
0.9
Total convertible preferred certificate liability
$
224.7
$
199.1
(1)
Par value 43.5 million Euros
The following is a summary of the rights, preferences and terms of the Company's outstanding series of CPCs:
Redemption and optional redemption
Class A and Class B CPCs mature on June 2, 2044 and Class C CPCs mature on September 30, 2050. The CPCs are
mandatorily redeemable at these maturity dates at a price equivalent to par plus accrued and unpaid interest (the "Redemption Price"). The Company, within 15 days of a conversion event, as
further discussed below, may elect an earlier redemption of any or all of the CPCs at the greater of the Redemption Price or a formula indexed to the adjusted net asset value of the Company, as
further defined in the CPC agreements (the "Optional Redemption Price"). The Redemption Price of the Class A, B and C CPCs totaled $261.4 million and $232.9 million as of
July 2, 2011 and January 1, 2011, respectively. The Company may only elect optional redemption to the extent sufficient funds are available subsequent to redemption to satisfy all of the
Company's other obligations, whether senior or pari passu to the CPCs.
Preferred interest
Class A and Class B CPCs carry a par value of one Euro and earn preferred interest based on the six-month EURIBOR plus
4.875% (6.6% and 6.1% as of July 2, 2011 and January 1, 2011, respectively). Class C CPCs carry a par value of one Euro and earn preferred interest based on the
six-month EURIBOR plus 5.0% (6.7% and 6.3% as of July 2, 2011 and January 1, 2011, respectively). The preferred interest is payable upon declaration by the Board of Directors
and to the extent the Company possesses sufficient funds. Cumulative preferred interest of $58.7 million and $46.6 million has been recorded within convertible preferred certificates on
the condensed consolidated balance sheet as of July 2, 2011 and January 1, 2011, respectively.
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
Liquidation
In the event of liquidation, Class A, B and C CPCs are redeemable at par value plus any accrued but unpaid interest. In liquidation, the CPCs
rank pari passu among each class, rank senior in priority of payment to the Company's common stock and rank subordinate to all other obligations. After the payment of the applicable liquidation
preference to the holders of the CPCs, the residual, if any, will be distributed pro rata among the common stockholders.
Voting and dividend rights
The CPCs do not include voting or dividend rights unless converted into common shares.
Contingent conversion feature
The CPC agreements provide both the Company and the holders certain rights to convert some or all of the CPCs into the Company's common shares upon
the occurrence of certain events. A conversion event is defined as "after payment of or provision for other obligations, the Issuer has funds resulting, among others, from (i) dividend payments
made by the subsidiaries or (ii) a sale of one of the subsidiaries by the Issuer to an affiliated or non-affiliated party or (iii) any recapitalization or refinancing of any
TPG Isola group of companies." During a 15-day period subsequent to the occurrence of a conversion event, the Company shall have the right but not the obligation to convert any or all CPCs
into common shares of the Company by requiring the holder to exchange CPCs for shares. Upon expiration of the Company's conversion rights, and for the following 15-day period each holder
shall have the right (subject to certain limitations) but not the obligation to have any or all of its CPCs converted into common shares of the Company. Any conversions will take place at a price
equal to the conversion price defined in the CPC agreements. The number of common shares into which each CPC is convertible will be determined at the time of conversion and is indexed to the greater
of par value plus accrued and unpaid interest or the adjusted net asset value of the Company, as further defined in the CPC agreements. As of July 2, 2011, the class A, B and C CPCs were
convertible into 587,016; 133,734,451 and 45,601,553 shares, respectively of the Company's common stock based solely upon the par plus accrued and unpaid interest feature of the conversion price.
Embedded derivative feature
In accordance with ASC 815,
Accounting for Derivative Instruments and Hedging Activities
, the
conversion features that are included in the CPC agreements and are discussed above are considered an embedded derivative liability. At July 2, 2011 and January 1, 2011, the fair value
of the embedded derivative liability was determined to be $53.8 million and $60.5 million, respectively, which was bifurcated from the CPCs and is stated separately on the condensed
consolidated balance sheets. The value related to the embedded derivative liability is recognized at fair value at each reporting period and any change in fair value is reflected in the condensed
consolidated statement of operations. For the six months ended July 2, 2011 and June 26, 2010, the change in fair value of the embedded derivative liability related to the CPCs resulted
in income of $11.9 million and a loss of $58.2 million, respectively. Management determined the fair value of the embedded derivative with the assistance of a third-party consultant as
described above.
6. INTEREST RATE SWAPS
In December 2010, a subsidiary of the Company entered into an interest rate swap with a notional amount of $25.0 million which expires on
December 31, 2013. The Company did not designate this swap agreement
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
as
a hedge and therefore, any change in fair value is recorded in the condensed consolidated statement of operations as interest expense. The change in the combined fair value of the change in
interest rate swaps was immaterial for the six-month periods ended July 2, 2011. The Company pays a fixed rate amount of 2.8% per annum and receives a variable rate based on the
greater of 2.0% or the three-month LIBOR. Interest incurred or earned from this agreement is settled quarterly on the last day of March, June, September, and December and commenced on March 31,
2011. The swap agreement is required under the terms of the Company's Senior Notes agreements, which require that a minimum of 50.0% of the principal of the Company's aggregate indebtedness bears
interest at a fixed rate or is protected by an agreement to provide the same effect.
In
May 2007, a subsidiary entered into two interest rate swaps with a combined notional amount of $15.8 million in order to mitigate the risks associated with fluctuations of the interest rate
on a capital lease contract. One of the swaps expires in June 2012 and bears an interest rate of the three-month EURIBOR plus 0.52%, the Company pays a variable rate amount based on the three month
EURIBOR plus 0.52% and receives a variable rate based on the three-month EURIBOR. The second
swap expires in June 2014 and bears a fixed interest rate of 4.65%; the Company pays a fixed rate of 4.65% and receives a variable rate based on the three-month EURIBOR. Settlement dates occur
quarterly on both swaps. The Company did not designate these swap agreements as hedges and therefore, any change in fair value is recorded in the condensed consolidated statement of operations as
interest expense.
The
combined fair value of these interest rate swaps was a liability of $0.6 million at each of July 2, 2011 and January 1, 2011.
7. PENSION AND OTHER RETIREMENT BENEFITS
The Company sponsors a number of defined benefit pension plans covering certain U.S. employees as well as certain non-U.S. employees of
certain subsidiaries. A defined benefit plan specifies the amount of benefits a plan participant is to receive. Plans covering U.S. employees provide benefits of stated amounts generally based on
years of service and compensation history. The qualified U.S. plans had been previously frozen and curtailed prior to the original Isola acquisition in 2004, such that no new participants were
admitted into the plans and no additional benefits were accrued for participants already in the plans. Employees do not contribute to the plans.
In
addition, the Company sponsors a Supplemental Employee Retirement Plan ("SERP"), which covers certain officers and highly compensated employees of the Company designated for participation by the
plan document. In order to comply with changes required by Section 409A of the Internal Revenue Code of 1986, effective January 1, 2008, the Company amended the SERP to require that
retirement benefits be paid in a single lump sum within 30 days following the participant's separation from service. Benefits for previously terminated employees were paid in January 2009.
Also, effective February 1, 2009, participants of the SERP no longer accrue additional benefits. Benefits accrued through February 1, 2009 were not impacted.
The
Company also provides postretirement benefits for certain employees of the Company and its subsidiaries, which include medical and life insurance. For the medical insurance plans, retirees pay
100% of plan premiums. The plan is not eligible for the government subsidy under the
Medicare Prescription Drug, Improvement and Modernization Act of
2003
(the "Act") and the Company does not recognize any reduction in the benefit obligation. The medical insurance benefits are paid as incurred. For the life
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
insurance
plan, retirees do not make contributions. The Company retains the right to change or eliminate these benefits.
The
components of net periodic benefit cost for the six-month periods ended July 2, 2011 and June 26, 2010 are shown in the table below (in millions):
Pension benefits
Other
benefits
U.S. plans
Non-U.S. plans
For six months ended July 2, 2011
Service cost
$
0.2
$
0.3
$
—
Interest cost
2.2
0.4
—
Amortization of net (gain) / loss
0.4
0.1
—
Expected return on plan assets
(2.0
)
(0.2
)
(0.2
)
Net periodic (benefit) / cost
$
0.8
$
0.6
$
(0.2
)
For six months ended June 26, 2010
Service cost
$
0.2
$
0.3
$
—
Interest cost
2.2
0.4
—
Amortization of net (gain) / loss
0.4
0.1
—
Expected return on plan assets
(2.0
)
(0.2
)
(0.2
)
Net periodic (benefit) / cost
$
0.8
$
0.6
$
(0.2
)
8. COMMITMENTS AND CONTINGENCIES
Leases
—The Company's principal non-cancelable, long-term, operating lease obligations are for land, manufacturing equipment, and office and
warehouse space. Rental expense for these operating leases for the six-month periods ended July 2, 2011 and June 26, 2010 was $1.5 million and $1.8 million,
respectively.
Property,
plant, and equipment recorded under capital leases and related accumulated depreciation were $21.4 million and $3.2 million as of July 2, 2011, respectively, and
$19.6 million and $2.6 million as of January 1, 2011, respectively.
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
Future
minimum lease payments under noncancelable operating and capital leases at July 2, 2011, are as follows (in millions):
Fiscal years ending
Operating
leases
Capital
leases
2011 (remaining 6 months)
$
0.7
$
0.7
2012
1.2
1.5
2013
0.7
1.5
2014
0.5
1.5
2015
0.4
1.5
2016
0.4
1.5
Thereafter
1.4
12.4
Total minimum lease payments
$
5.3
20.6
Less imputed interest
(4.3
)
Present value of minimum lease payments
16.3
Current portion of capital lease obligations (included in other current liabilities)
(0.7
)
Long-term portion of capital lease obligations
$
15.6
The Company received approximately $1.1 million and $0.9 million of rental income from the sublease of certain office and warehouse space during
the six-month periods ended July 2, 2011 and June 26, 2010, respectively. Rental income was recorded as a reduction of cost of goods sold in the condensed consolidated
statement of operations. The sublease is expected to provide approximately $1.1 million in rental income during the remainder of the fiscal year ending December 31, 2011.
Legal Proceedings
—From time to time, the Company is involved in legal proceedings and claims that occur in the normal course of business. Although there can be no
assurance, the Company does not believe the results of these proceedings will have a material adverse effect on its business, results of operations, financial position, or cash flows.
9. FAIR VALUE MEASUREMENTS
Fair Value Measurements on Recurring Basis.
The Company measures the fair value of certain assets and liabilities on a recurring basis based upon a fair value
hierarchy in accordance with ASC 820,
Fair Value Measurements and Disclosures
, as follows:
Level 1—Observable
inputs such as quoted prices in active markets;
Level 2—Inputs,
other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3—Unobservable
inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Liabilities
measured at fair value on a recurring basis include interest rate swaps and embedded derivatives.
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
The
following table presents information about the Company's liabilities measured at fair value on a recurring basis as of July 2, 2011 and January 1, 2011 (in millions):
Fair value measurements
at reporting date using
Total
carrying
value
Quoted
prices in
active
markets
for
identical
assets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
July 2, 2011:
Liabilities:
Interest rate swaps
(1)
$
0.6
$
0.6
Embedded derivative liability
54.1
54.1
January 1, 2011:
Liabilities:
Interest rate swaps
(1)
$
0.6
$
0.6
Embedded derivative liability
66.4
66.4
(1)
Included in other liabilities in the consolidated balance sheet.
The Company's interest rate swaps are determined based on market prices for similar instruments in active markets and are classified as Level 2.
Valuations using discounted cash flows are classified within Level 3 as these valuations were determined by valuation techniques based upon assumed conversion feature activity and discounting
those cash flows at a rate reflective of current market conditions and factors specific to the Company. The Company's embedded derivative liabilities are measured using Level 3 inputs.
The
following table presents the changes in Level 3 liabilities measured on a recurring basis for the six months ended July 2, 2011 (in millions):
Embedded
derivative liability
CPCs
Debt
Total
Balance—January 1, 2011
$
60.5
$
5.9
$
66.4
Net change in fair value included in earnings
(11.9
)
(5.6
)
(17.5
)
Translation adjustment
5.2
—
5.2
Balance—July 2, 2011
$
53.8
$
0.3
$
54.1
10. INCOME TAXES
Income tax expense for the six months ended July 2, 2011 and June 26, 2010 is $10.7 million and $11.8 million,
respectively. The Company's forecasted annualized effective rate for the six months ended July 2, 2011 and June 26, 2010 is (146.3)% and (60.3)%, respectively. The Company's interim
income tax
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
provision
is calculated based on an estimated annual effective tax rate applied to pre-tax net income, adjusted for discrete items that occurred within the period. The expense is primarily
a result of tax in the Company's profitable jurisdictions, establishment of valuation allowances in loss jurisdictions and uncertain tax positions.
The
total unrecognized tax benefits for the six months ended July 2, 2011 and the fiscal year ended January 1, 2011 was $54.0 million and $51.3 million, respectively, of
which $53.2 million and $50.5 million, respectively, represent the amount that, if recognized, and prior to a consideration of the need for a valuation allowance, would have a favorable
effect on the Company's effective tax rate in any future periods. The Company's unrecognized tax benefits increased by $2.7 million for the six months ended July 2, 2011. As a result of
settlements with taxing authorities, it is reasonably possible that the total amounts of unrecognized tax benefits as of July 2, 2011 will decrease by up to $11.7 million during the next
12 months. The amount of the reduction that would have a favorable impact on the Company's provision for income taxes is $10.9 million.
In
accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company has recorded
tax-related accrued interest at July 2, 2011 and January 1, 2011 of $2.2 million and $2.0 million, respectively. The Company has also recorded a gross amount of
accrued penalties at each of July 2, 2011 and January 1, 2011 of $0.2 million.
The
Company files income tax returns with federal, state, local, and foreign jurisdictions and is subject to reviews and U.S. audits of those returns. Currently, the Internal Revenue Service ("IRS")
is examining the 2008 and 2009 federal income tax returns. The Company is no longer subject to IRS examination for periods prior to 2007, although carryforward attributes that were generated prior to
2007 may still be adjusted upon examination by the IRS if they either have been or will be used in a future period. The Company's German income tax returns are also under examination by taxing
authorities for the years 2004 to 2007. With a few exceptions, the Company is no longer subject to examination for years prior to 2004.
11. RELATED-PARTY TRANSACTIONS
On September 30, 2010, a subsidiary of the Company entered into the Financing Transaction (see Notes 4 and 5). The Company received
$376.4 million in aggregate proceeds in connection with the Financing Transaction. A syndicate of lenders who obtained an ownership interest in the sole shareholder of the Company as part of
the Financing Transaction provided $369.4 million of the aggregate proceeds.
Certain
subsidiaries of the Company are party to a management services agreement with a related party to provide continuing business strategy, management consulting, and financial advisory services.
The Company recorded $1.0 million in fees related to this agreement during each of the six-month periods ended July 2, 2011 and June 26, 2010, which is included in
selling, general, and administrative expense in the condensed consolidated statement of operations. Amounts payable to the related party totaled $1.1 million and $1.0 million at
July 2, 2011 and January 1, 2011, respectively.
In
conjunction with the purchase of the Company in 2004, an exclusive distributorship right for the United States was granted to a noncontrolling owner of the sole stockholder. Sales to the related
party totaled $15.1 million and $16.8 million for the six-month periods ended July 2, 2011 and June 26, 2010, respectively. Receivables from the related party
totaled $4.3 million and $4.4 million at July 2, 2011 and January 1, 2011, respectively.
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
12. BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION
The Company manages the business through three reportable operating segments, which are defined by the geographic regions in which the Company
operates (U.S., Europe and Asia). Each region has separate management teams and reporting structures and provides similar products to a similar set of customers. Segment information is consistent with
how the chief operating decision maker reviews the business, makes investing and resource allocation decisions and assesses overall operating performance. The Company evaluates performance based upon
several factors, of
which the primary financial measure is segment operating income (loss). Segment operating income (loss) does not include certain corporate operating costs such as administrative, legal, sales and
marketing, and research and development costs. The Company believes that information about segment operating income (loss) assists all users of the Company's condensed consolidated financial
statements by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from non-operational factors that affect net income, thus
providing insight into both operations and the other factors that affect reported results. The accounting policies of the segments are the same as those described in Note 1.
The
following table presents certain results of operations and balance sheet information by identified segments (in thousands):
Asia
Europe
U.S.
Corporate
Total
Six months ended July 2, 2011
External revenues
$
185,165
$
74,562
$
56,856
—
$
316,583
Operating income / (loss)
32,569
6,299
7,957
(14,416
)
32,409
Segment assets
218,177
92,005
68,775
23,409
402,366
Six months ended June 26, 2010
External revenues
$
176,480
66,730
$
63,747
—
$
306,957
Operating income / (loss)
33,997
1,775
9,696
(10,043
)
35,425
Segment assets
242,591
80,977
88,496
1,007
413,071
Corporate expenses reflected in operating income (loss) consist primarily of administrative, legal, sales and marketing and research and development costs.
13. EARNINGS PER SHARE
Basic earnings per share ("EPS") is computed by dividing net loss by the weighted average number of common shares outstanding during the period.
Diluted EPS is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. The shares underlying
the CPCs were not included in the computation of diluted EPS for any periods presented as the shares were considered contingently issuable (see Note 5). The Company has no potentially dilutive
common shares.
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
The
following table summarizes the computation of basic and diluted EPS for the six-month periods ended July 2, 2011 and June 26, 2010:
Six months ended
July 2,
2011
June 26,
2010
(In thousands, except for share and per share data)
Net loss
$
(19,107
)
$
(30,525
)
Weighted average common shares outstanding—basic
500
500
Weighted average number of common and potential common shares outstanding—diluted
500
500
Basic and diluted net loss per common share
$
(38.21
)
$
(61.05
)
Unaudited Pro Forma Net Loss Per Share
In connection with the Reorganization, all of the outstanding securities of Isola Group S.a.r.l, including the common shares and convertible
preferred certificates, will be contributed by TPG to Isola Group Ltd., which will result in Isola Group Ltd. becoming our new holding company and Isola Group S.a.r.l. becoming a
subsidiary of Isola Group Ltd. The unaudited pro forma basic and diluted net income (loss) per share for the year ended July 2, 2011 reflects the conversion of all outstanding common
stock and convertible preferred certificates into ordinary shares of Isola Group Ltd. as though the conversion had occurred as of the beginning of the period or the
original date of issuance, if later. In addition, the pro forma amounts give effect to the termination of all outstanding stock-based awards associated with TPG and the replacement of such awards with
awards of Isola Group Ltd., with substantially the same terms, as of the beginning of the period. The unaudited pro forma basic and diluted net income (loss) per share has been presented in
accordance with SEC Staff Accounting Bulletin Topic I.B.3. The numerator in the pro forma basic and diluted net income (loss) per share calculation has been adjusted (i) to remove gains and
losses resulting from the change in fair value of the embedded derivative related to the CPCs, (ii) to remove accreted interest expense related to the CPCs, and (iii) to remove foreign
exchange gains and losses related to the CPCs and the embedded derivative liability.
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ISOLA GROUP S.A.R.L. AND SUBSIDIARIES,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of July 2, 2011 and for the six months ended July 2, 2011
The
following table summarizes the computation of pro forma basic and diluted EPS for the six months ended July 2, 2011:
Six months
ended
July 2,
2011
(In thousands, except for share and per share data)
Net income / (loss)—basic
Pro forma adjustments
Accreted interest on CPCs and amortization of discount
Embedded derivative (gain) / loss—CPCs
Foreign exchange (gain) loss
Net income / (loss) used to compute pro forma net income / (loss) per share
$
Weighted average ordinary shares outstanding—basic
Pro forma adjustments—basic
Assumed weighted-average effect of conversion of CPCs
Pro forma weighted average ordinary shares outstanding—basic
Pro forma net income / (loss) per ordinary share—basic
$
Pro forma weighted average ordinary shares outstanding—basic
Pro forma adjustments—diluted
Assumed issuance of stock options and restricted units in Isola Group Ltd.
Pro forma weighted average ordinary shares outstanding—diluted
Pro forma net income / (loss) per ordinary share—diluted
$
Pro forma net loss per share excludes stock-based awards underlying                  ordinary shares of Isola Group Ltd. expected to be
outstanding
subsequent to the Reorganization because their effect would have been anti-dilutive.
********
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ISOLA GROUP LTD.
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Isola Group Ltd.
Chandler, Arizona
We
have audited the accompanying balance sheet of Isola Group Ltd. (the "Company") as of September 20, 2011 (date of incorporation). This financial statement is the responsibility of the
Company's management. Our responsibility is to express an opinion on this financial statement based on our audit.
We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the balance sheet, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
balance sheet presentation. We believe that our audit provides a reasonable basis for our opinion.
In
our opinion, such balance sheet presents fairly, in all material respects, the financial position of the Company as of September 20, 2011, in conformity with accounting principles generally
accepted in the United States of America.
/s/
DELOITTE & TOUCHE LLP
Phoenix, Arizona
September 23, 2011
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Table of Contents
ISOLA GROUP LTD.
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
BALANCE SHEET
As of September 20, 2011
September 20,
2011
TOTAL ASSETS
$
0
TOTAL LIABILITIES
0
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY:
Common stock, $.0001 par value—100,000,000 shares authorized, one share issued and outstanding
0
Preferred stock, $.0001 par value—25,000,000 shares authorized, zero shares issued and outstanding
0
Retained Earnings
0
Total stockholder's equity
0
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY
$
0
See notes to consolidated financial statements.
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ISOLA GROUP LTD.,
A WHOLLY OWNED SUBSIDIARY OF TPG HATTRICK PARTNERS, L.P.
NOTES TO BALANCE SHEET
As of September 20, 2011
1. ORGANIZATION
Isola Group Ltd. (the "Company") was incorporated in the Cayman Islands on September 20, 2011. The Company is a wholly-owned subsidiary
of TPG Hattrick Partners, L.P. ("TPG"). The Company had no operations and has been created for the purpose of effecting a reorganization merger with Isola Group S.a.r.l., a wholly-owned
subsidiary of TPG, further described below.
There
has been no activity and, therefore, the statement of operations, the statement of stockholder's equity and the statement of cash flow are not presented.
2. REORGANIZATION MERGER
On September 20, 2011, TPG formed a new company, Isola Group Ltd., in the Cayman Islands. Isola Group Ltd. has been authorized by its
board of directors to file a registration statement with the Securities and Exchange Commission ("SEC") permitting it to sell its ordinary shares in an initial public offering ("IPO"). Prior to the
IPO the Company will undergo a corporate reorganization that will include the following steps:
–>
all
of the outstanding securities of the Company, including common shares and convertible preferred certificates, will be contributed by TPG to Isola
Group Ltd., which will result in Isola Group Ltd. becoming our new holding company and the Company becoming a subsidiary of Isola Group Ltd.;
–>
TPG
, and TPG's general partner, TPG Hattrick Holdco, LLC, will be liquidated and the ordinary shares of Isola Group Ltd. will be distributed to their
investors; and
–>
all
outstanding stock-based awards associated with TPG will be terminated and replaced with new awards for ordinary shares of Isola Group Ltd. that have the
same value and substantially the same terms.
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Table of Contents
Table of Contents
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.    Other Expenses of Issuance and Distribution.
The following table shows the costs and expenses, other than underwriting discounts and commissions, payable in connection with the
sale and distribution of the securities being registered. Except as otherwise noted, we will pay all of these amounts. All amounts except the SEC registration fee and the FINRA fee are estimated. The
missing amounts will be filed by amendment.
SEC Registration Fee
$
Nasdaq Listing Fee
FINRA Fee
Accounting Fees and Expenses
Legal Fees and Expenses
Printing Fees and Expenses
Blue Sky Fees and Expenses
Miscellaneous
Total
$
Item 14.    Indemnification of Directors and Officers.
A Cayman Islands exempted company is a company incorporated under the laws of the Cayman Islands whose business is conducted mainly
outside the Cayman Islands. As a
Cayman Islands exempted company, the laws of the Cayman Islands will be relevant to the provisions relating to indemnification of our directors and officers. Cayman Islands law does not limit the
extent to which a company's articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be
contrary to public policy, such as to the provision of indemnification against the consequences of committing a crime or against the indemnified person's own fraud or dishonesty.
Our
articles of association provide that each of our directors and officers shall be indemnified out of our assets against any liability, action, proceeding, claim, demand, costs,
damages or expenses incurred by him as a result of any act or failure to act in carrying out his functions other than such liability, if any, that he may incur by his own fraud or knowing or reckless
breach of duty. No such director or officer shall be liable to us for any loss or damage in carrying out his functions unless that liability arises through the fraud or knowing or reckless breach of
duty of such director or officer.
We
have also entered into indemnification agreements with our directors and executive officers under which we have agreed to indemnify each such person and hold him harmless against
expenses, judgments, fines and amounts payable under settlement agreements in connection with any threatened, pending or completed action, suit or proceeding to which he has been made a party or in
which he became involved by reason of the fact that he is or was our director or officer. Except with respect to expenses to be reimbursed by us in the event that the indemnified person has been
successful on the merits or otherwise in defense of the action, suit or proceeding, our obligations under the indemnification agreements are subject to certain customary restrictions and exceptions.
The
underwriting agreement (to be filed as Exhibit 1.1 hereto) will provide for indemnification by the underwriters of us and our executive officers and directors, and
indemnification of the underwriters by us, for certain liabilities, including liabilities arising under the Securities Act of 1933, as amended, in connection with matters specifically provided in
writing by the underwriters for inclusion in the registration statement.
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In
addition, we maintain standard policies of insurance under which coverage is provided to our directors and officers against loss rising from claims made by reason of breach of duty or
other wrongful act, and to us with respect to payments which may be made by us to such directors and officers pursuant to the above indemnification provision or otherwise as a matter of law.
Item 15.    Recent Sales of Unregistered Securities.
Isola Group Ltd.
During the three years preceding the filing of this registration statement, Isola Group Ltd., the registrant, has not sold any
of its securities without registration under the Securities Act of 1933, as amended, except as described below:
•
On September 20, 2011, Isola Group Ltd. issued one ordinary share to Reid Services Limited at par value in
connection with its incorporation under the laws of the Cayman Islands. The offer, sale and issuance of this security was deemed to be exempt from registration under the Securities Act under
Section 4(2) of the Securities Act as transactions by an issuer not involving any public offering. No underwriters were involved in the foregoing sale of the security. Reid Services Limited
subsequently transferred the one ordinary share held by it to the Sponsor Limited Partnership.
•
On                  , 2011, Isola Group Ltd. issued 9,999 ordinary shares to the
Sponsor Limited Partnership at par
value. The offer, sale and issuance of these securities was deemed to be exempt from registration under the Securities Act under Section 4(2) of the Securities Act as transactions by an issuer
not involving any public offering. No underwriters were involved in the foregoing sale of securities.
•
Immediately prior to the completion of this offering and in connection with the corporate reorganization described in
"Summary—Concurrent Transactions—Corporate Reorganization," all of the ordinary shares of Isola Group Ltd. will be contributed (i) first, to the Sponsor Holding
Company in connection with the liquidation of the Sponsor Limited Partnership, and (ii) second, to the Sponsors in connection with the liquidation of the Sponsor Holding Company. The offer,
sale and issuance of these securities will be deemed to be exempt from registration under the Securities Act under Section 4(2) of the Securities Act as transactions by an issuer not involving
any public offering or Section 3(a)(9) of the Securities Act as securities exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is
paid or given directly or indirectly for soliciting such exchange. No underwriters will be involved in the foregoing sales of securities.
•
Immediately prior to the completion of this offering and in connection with the corporate reorganization described in
"Summary—Concurrent Transactions—Corporate Reorganization," Isola Group Ltd. will grant options to
purchase                        ordinary shares to certain shareholders,
directors, employees and former service providers of Isola in exchange for the termination of all outstanding options held by such persons to purchase equity interests in the Sponsor Limited
Partnership and Sponsor Holding Company. The offer, sale and issuance of these securities will be deemed to be exempt from registration under the Securities Act under Section 4(2) of the
Securities Act as transactions by an issuer not involving any public offering, Section 3(a)(9) of the Securities Act as securities exchanged by the issuer with its existing security holders
exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange or Rule 701 promulgated under the Securities Act as offers and sale of
securities pursuant to certain compensatory benefit plans and contracts relating to compensation in compliance with Rule 701. No underwriters will be involved in the foregoing sales of
securities.
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Luxembourg Holding Company
During the three years preceding the filing of this registration statement, the Luxembourg Holding Company, the predecessor of Isola
Group Ltd. and the holding company of Isola immediately prior to the completion of this offering (See "Summary—Concurrent Transactions—Corporate Reorganization") has not
sold its securities without registration under the Securities Act of 1933, as amended, except as described below:
•
On September 30, 2010 the Luxembourg Holding Company issued 43,500,666 class C convertible preferred
certificates ("Class C CPCs") with a nominal value of EUR 1.- per Class C CPC for a total amount of EUR 43,500,666 to the Sponsor Limited Partnership. The offer, sale and issuance of
these securities were deemed to be exempt from registration under the Securities Act under Section 4(2) of the Securities Act as transactions by an issuer not involving any public offering. No
underwriters were involved in the foregoing sales of securities.
Item 16.    Exhibits and Consolidated Financial Statement Schedules.
(a)
Exhibits
Exhibit No.
Exhibit Description
1.1
**
Form of Underwriting Agreement among Isola Group Ltd. and the Underwriters.
3.1
*
Memorandum and Articles of Association of Isola Group Ltd.
4.1
**
Shareholders and Registration Rights Agreement dated as of                  , 2011 by and between Isola Group Ltd. and the
shareholders party thereto.
4.2
**
Contribution Agreement dated as of                  , 2011 by and between Isola Group Ltd. and TPG Hattrick Partners,
 L.P.
4.3
**
Specimen of Ordinary Share certificate.
5.1
**
Opinion of DLA Piper LLP (US).
5.2
**
Opinion of Appleby (Cayman Islands).
10.1
**
Form of Indemnification Agreement.
10.2
**
Isola Group Ltd. 2011 Equity Incentive Plan.
10.3
**
Form of Share Option Agreement (U.S. Participant).
10.4
**
Form of Share Option Agreement (Non-U.S. Participant).
10.5
**
Form of Restricted Shares Agreement (U.S. Participant).
10.6
**
Form of Restricted Shares Agreement (Non-U.S. Participant).
10.7
**
Amended and Restated Employment Agreement dated as of August 11, 2008 by and between Isola USA Corp. and Raymond P. Sharpe.
10.8
**
Amendment to Amended and Restated Employment Agreement dated as of September 30, 2010 by and between Isola USA Corp. and Raymond P. Sharpe.
10.9
**
Employment Agreement dated as of June 30, 2009 by and between Isola USA Corp. and F. Gordon Bitter.
10.10
**
Employment Agreement dated as of April 30, 2007 by and between Isola USA Corp. and Mathew R. LaRont.
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Exhibit No.
Exhibit Description
10.11
**
Restated Employment Agreement dated as of October 1, 2004 by and between Isola USA Corp. and Tarun Amla.
10.12
**
Employment Agreement dated as of July 21, 2011 by and between Isola USA Corp. and Robert Chaney.
10.13
**
Employment Agreement dated as of February 17, 2006 by and between Isola GmbH and Karl Stollenwerk.
10.14
**
Credit and Guaranty Agreement dated as of September 30, 2010 by and between Isola USA Corp., Isola Group, Hattrick Lux No. 2 S.á.r.l., Hattrick Lux No. 4 S.á.r.l., Hattrick Holdings U.S.
Inc, the Lenders party thereto from time to time, and Goldman Sachs Lending Partners LLC, as syndication agent, as administrative agent, as collateral agent and as documentation agent.
10.15
**
Waiver and Amendment No. 1 dated as of May 19, 2011 to the Credit and Guaranty Agreement dated as of September 30, 2010 by and between Isola USA Corp., Isola Group, Hattrick Lux No. 2
S.á.r.l., Hattrick Lux No. 4 S.á.r.l., Hattrick Holdings U.S. Inc., the Lenders party thereto, and Goldman Sachs Lending Partners LLC, as administrative agent.
10.16
**
Waiver and Amendment No. 2 dated as of June 30, 2011 to the Credit and Guaranty Agreement dated as of September 30, 2010 by and between Isola USA Corp., Isola Group, Hattrick Lux No. 2
S.á.r.l., Hattrick Lux No. 4 S.á.r.l., Hattrick Holdings U.S. Inc., the Lenders party thereto, and Goldman Sachs Lending Partners LLC, as administrative agent.
10.17
**
Mezzanine Credit and Guaranty Agreement dated as of September 30, 2010 by and between Isola USA Corp., Isola Group, Hattrick Lux No. 2 S.á.r.l., Hattrick Lux No. 4 S.á.r.l., Hattrick
Holdings U.S. Inc. and the Lenders party thereto.
10.18
**
Waiver and Amendment No. 1 dated as of May 19, 2011 to the Mezzanine Credit and Guaranty Agreement dated as of September 30, 2010 by and between Isola USA Corp., Isola Group, Hattrick Lux No. 2
S.á.r.l., Hattrick Lux No. 4 S.á.r.l., Hattrick Holdings U.S. Inc. and the Lenders party thereto.
10.19
**
Waiver and Amendment No. 2 dated as of June 24, 2011 to the Mezzanine Credit and Guaranty Agreement dated as of September 30, 2010 by and between Isola USA Corp., Isola Group, Hattrick Lux No. 2
S.á.r.l., Hattrick Lux No. 4 S.á.r.l., Hattrick Holdings U.S. Inc. and the Lenders party thereto.
21
**
Subsidiaries of Isola Group Ltd.
23.1
**
Consent of DLA Piper LLP (US) (included in Exhibit 5.1).
23.2
*
Consent of Deloitte & Touche LLP.
23.3
*
Consent of Deloitte & Touche LLP.
24.1
*
Powers of Attorney (included on signature pages of Part II to this Registration Statement).
*
Filed
herewith
**
To
be filed by amendment
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(b)
Financial Statement Schedules
Schedule 1—Financial
Statements of Parent Company as of January 1, 2011 and December 26, 2009
Financial Information of Parent Company
Isola Group S.a.r.l.
CONDENSED BALANCE SHEETS
As of January 1, 2011 and December 26, 2009
January 1,
2011
December 26,
2009
(In thousands,
except share amounts)
ASSETS
CURRENT ASSETS:
Cash
$
6
$
3
Receivables from subsidiaries
23
24
Total current assets
29
27
TOTAL ASSETS
$
29
$
27
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
CURRENT LIABILITIES:
Accounts payable
—
44
Payables to subsidiaries
5
7
Accrued taxes payable
359
274
Total current liabilities
364
325
OBLIGATION FROM INVESTMENT IN SUBSIDIARY—NET
137,634
193,952
CONVERTIBLE PREFERRED CERTIFICATES
199,136
176,595
EMBEDDED DERIVATIVE
60,459
27,513
Total liabilities
397,593
398,385
STOCKHOLDER'S DEFICIENCY:
Common stock, 25 Euro par value ($31)—500 shares authorized, issued, and outstanding
15
15
Additional paid-in capital
30,652
28,160
Accumulated deficit
(394,602
)
(399,684
)
Accumulated other comprehensive loss
(33,629
)
(26,849
)
Total stockholder's deficiency
(397,564
)
(398,358
)
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY
29
27
See
notes to condensed financial statements.
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Financial Information of Parent Company
Isola Group S.a.r.l.
CONDENSED STATEMENTS OF OPERATIONS
For the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008
January 1,
2011
December 26,
2009
December 27,
2008
(In thousands)
OPERATING EXPENSES
Sales, general, and administrative
$
165
$
177
$
94
Total operating expenses
165
177
94
OPERATING LOSS
(165
)
(177
)
(94
)
OTHER INCOME—Net
212
132
116
INTEREST EXPENSE
(10,631
)
(10,454
)
(15,079
)
INTEREST INCOME
10,890
11,115
15,116
INCOME / (LOSS) ON EQUITY INVESTMENT IN SUBSIDIARIES
4,863
(101,245
)
35,939
FOREIGN EXCHANGE GAIN / (LOSS)—Net
(1
)
1
(23
)
INCOME / (LOSS) BEFORE TAXES
5,167
(100,628
)
35,975
PROVISION FOR INCOME TAXES
(85
)
(98
)
(176
)
NET INCOME / (LOSS)
$
5,082
$
(100,726
)
$
35,799
See
notes to condensed financial statements.
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Financial Information of Parent Company
Isola Group S.a.r.l.
CONDENSED STATEMENTS OF CASH FLOWS
For the fiscal years ended January 1, 2011, December 26, 2009, and December 27, 2008
January 1,
2011
December 26,
2009
December 27,
2008
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income / (loss)
$
5,082
$
(100,726
)
$
35,799
Adjustments to reconcile net income / (loss) to cash used in operating activities:
Equity in net (income) / loss of subsidiaries
(4,863
)
101,245
(35,939
)
Foreign currency translation
—
0
20
Accreted interest expense on convertible preferred certificates and amortization of discount
10,631
10,454
15,079
Accreted interest income on convertible preferred certificates in subsidiary and amortization of discount
(10,890
)
(11,115
)
(15,116
)
Change in operating assets and liabilities:
Receivables from subsidiaries
2
(1
)
1
Account payable
(44
)
(7
)
35
Accrued taxes payable
85
98
176
Net cash used in operating activities
3
(52
)
55
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in subsidiary
(57,707
)
—
—
Net cash used in investing activities
(57,707
)
—
—
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from financing transactions
57,130
Proceeds of capital contributions
577
—
—
Net cash provided by / (used in) financing activities
57,707
—
—
CASH—Beginning of year
3
55
0
CASH—End of year
$
6
$
3
$
55
See
notes to condensed financial statements.
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Financial Information of Parent Company
Isola Group S.a.r.l.
NOTES TO CONDENSED FINANCIAL STATEMENTS
As of January 1, 2011 and December 26, 2009, and for the fiscal years
ended
January 1, 2011, December 26, 2009, and December 27, 2008
1. BASIS OF PRESENTATION
Isola Group S.a.r.l. (the "Parent Company") is a holding company incorporated in Luxembourg whose subsidiaries manufacture and sell
laminate products across Europe,
Asia, and the United States of America. Substantially all of its business operations are conducted through its subsidiaries. We refer to the Parent Company and its subsidiaries collectively as the
Company.
The
accompanying condensed financial statements of the Parent Company have been prepared in accordance with Rule 12-04, Schedule I of
Regulation S-X, as the restricted net assets of the Parent Company's subsidiaries exceed 25% of the consolidated net assets of the Company. Accordingly, these statements have been
prepared on a "parent-only" basis.
Under
presentation on a parent-only basis, the Parent Company's investment in its consolidated subsidiaries is presented using the equity method of accounting.
Certain
information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. As such, these
parent-only statements should be read in conjunction with the notes to the consolidated financial statements of the Company included elsewhere herein.
2. CONVERTIBLE PREFERRED CERTIFICATES
Convertible Preferred Certificates ("CPCs") were issued to the sole shareholder of the Parent Company. In conjunction with each
issuance of CPCs to the sole shareholder, the Parent Company was issued CPCs from its subsidiary with the equivalent terms, interest rates, conditions and amounts, with the exception of the original
issuance of Class A and Class B CPCs. A CPC liability and embedded derivative liability with an offsetting CPC asset and embedded derivative asset were recorded with the issuance of the
Class C CPCs. See Note 5 to the consolidated financial statements. The following table presents the carrying value of the CPCs at January 1, 2011 and December 26, 2009:
Investment in CPCs
CPC Liability
January 1, 2001
Class A & B, combined
$
128,797
$
128,249
Class C
24,293
24,294
Accreted interest
47,524
46,593
Total, January 1, 2011
$
200,614
$
199,136
December 26, 2009
Class A & B, combined
$
138,548
$
137,958
Accreted interest
39,352
38,637
Total, December 26, 2009
$
177,900
$
176,595
The
investment in CPCs is included in the Obligation from Investment in Subsidiary—net on the consolidated balance sheet as there is a right of offset. Due to the offsetting
effect of the embedded derivative asset and liability, the change in the fair value of the derivative is zero and not presented on the statement of operations.
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3. COMMITMENTS AND CONTINGENCIES
Obligation from investment in subsidiary
—The carrying value of an investment in one of the Company's subsidiaries reflects a negative balance as a
result of the recognition of cumulative reported losses. As the Company has the intention to fund current and any future losses, the Company continues to apply the equity method of accounting for the
investment in the subsidiary.
The
Parent Company's subsidiary, Isola USA Corp., entered into a series of financing transactions on September 30, 2010, including a senior secured credit agreement and a
mezzanine credit agreement, with a syndicate of lenders, the majority of which are partial owners in an entity that is the Parent Company's sole stockholder (collectively "the Credit Agreements"). The
Parent Company guarantees the obligations of the borrower, Isola USA Corp., under the Credit Agreements. As of January 1, 2011, there was $210.0 million of outstanding principal
related to the senior secured credit agreement. As of January 1, 2011, there was $178.6 million of outstanding principal, which consisted of $175.0 million in term loans and
$3.6 million of accreted interest related to the mezzanine credit agreement. Additionally, see Note 8 of the Company's consolidated financial statements for a discussion of its
commitments and contingencies.
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Schedule 2—Valuation
and Qualifying Accounts
The
following table provides details of the Company's valuation and qualifying accounts (in millions):
Beginning
Ending
balance
Balance
Additions
Deductions
Other
(1)
Fiscal Year Ended January 1, 2011
Valuation allowance for doubtful accounts
$
3.8
$
—
$
—
$
0.1
$
3.9
Valuation allowance for deferred income taxes
126.6
19.9
(43.3
)
1.7
104.9
Fiscal Year Ended December 26, 2009
Valuation allowance for doubtful accounts
$
21.3
$
0.6
$
(17.0
)
$
(1.1
)
$
3.8
Valuation allowance for deferred income taxes
121.2
35.0
(26.2
)
(3.4
)
126.6
Fiscal Year Ended December 27, 2008
Valuation allowance for doubtful accounts
$
17.0
$
6.7
$
(2.0
)
$
(0.4
)
$
21.3
Valuation allowance for deferred income taxes
154.6
26.5
(68.4
)
8.5
121.2
(1)
Includes foreign currency translation amounts and other comprehensive loss adjustments
Item 17.   Undertakings.
(a)
The
undersigned Registrant hereby undertakes:
(1)
That,
for the purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as a part of this
registration statement in reliance upon Rule 430A and conformed in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)
That,
for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the security offered therein and the offering of such securities on such form shall be deemed to be the initial bona fide offering
thereof.
(b)
The
undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Chandler, State of Arizona, on October 31, 2011.
ISOLA GROUP LTD.
By:
/s/ RAYMOND P. SHARPE
Name:
Raymond P. Sharpe
Title:
President and Chief Executive Officer
(Principal Executive Officer)
By:
/s/ F. GORDON BITTER
Name:
F. Gordon Bitter
Title:
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
By:
/s/ NINA HARALAMBIDIS
Name:
Nina Haralambidis
Title:
Vice President, Corporate Controller and Chief Accounting Officer
(Principal Accounting Officer)
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints F. Gordon Bitter and
Michael S. Rafford, or any one of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name,
place, and stead, in any and all capacities, to sign any and all amendments to this registration statement, including post-effective amendments thereto and any registration statements
filed pursuant to Rule 462 under the Securities Act of 1933, and to file the same, with all exhibits hereto, and other documents in connection therewith, with the Securities and Exchange
Commission, and does hereby grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ RAYMOND P. SHARPE
Raymond P. Sharpe
Director, President and Chief Executive Officer
October 31, 2011
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Signature
Title
Date
/s/ KEVIN R. BURNS
Kevin R. Burns
Director
October 31, 2011
/s/ DONALD A. COLVIN
Donald A. Colvin
Director
October 31, 2011
/s/ H. MCINTYRE GARDNER
H. McIntyre Gardner
Director
October 31, 2011
/s/ JORDON L. KRUSE
Jordon L, Kruse
Director
October 31, 2011
/s/ JEFFREY S. MCCREARY
Jeffrey S. McCreary
Director
October 31, 2011
/s/ ERIC W. NOETH
Eric W. Noeth
Director
October 31, 2011
/s/ CASSIDY J. TRAUB
Cassidy J. Traub
Director
October 31, 2011
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