On March 30, 2023, Allegro MicroSystems, Inc. entered into a Termination of the Distribution Agreement (the Termination Agreement") with Sanken Electric Co. Ltd. The Termination Agreement formally terminated the Distribution Agreement dated as of July 5, 2007, by and between the Company and Sanken, effective March 31, 2023. The Distribution Agreement provided Sanken the exclusive right to distribute the Company's products in Japan.

In connection with the termination of the Distribution Agreement and as provided for in the Termination Agreement, the Company made a one-time payment of $5,000,000 to Sanken in exchange for the cancellation of Sanken's exclusive distribution rights in Japan.