ANALOG DEVICES, INC. AMENDMENT TO EMPLOYEE RETENTION AGREEMENT
EXHIBIT 99.3
ANALOG DEVICES, INC.
AMENDMENT TO EMPLOYEE RETENTION AGREEMENT
Amendment dated as of October 22, 2007 (“Amendment”) to the Employee Retention Agreement dated
as of January 16, 1989 (the “Retention Agreement”) between Analog Devices, Inc. (the “Company”) and
Xxxxxx X. Xxxxxxx (the “Executive”).
WHEREAS, the parties desire to amend the Retention Agreement to reflect changes required by
final regulations issued under Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) and also to reflect the provisions of the Long-Term Retention Agreement of the even date
herewith between the Company and the Executive.
NOW, THEREFORE, for valuable consideration, receipt of which is acknowledged, the parties
agree as follows:
1. | Section 5(c)(i) of the Retention Agreement is amended to delete the provisions of clause (B) so that it shall read in its entirety as follows: |
“(i) the Company shall pay to you your full base salary and all other compensation through
the Date of Termination at the rate in effect at the time the Notice of Termination is
given, no later than the fifth day following the Date of Termination, plus all other amounts
to which you are entitled under any compensation plan of the Company at the time such
payments are due.”
2. | Section 5(c)(iii) of the Retention Agreement is amended by the addition of the following proviso at the end thereof: |
“; provided, however that (i) you must incur such expenses during the Term of the Agreement
or thereafter and before the date on which the statute of limitations has expired, including
any extensions, with respect to any claims arising in connection with such termination or
the payment or provision or failure to pay or provide any rights or benefits under this
Agreement, (ii) such reimbursement must be made no later than the end of the calendar year
following the taxable year in which the expense is incurred, (iii) the expenses eligible for
reimbursement under this provision may not affect the amount of such expenses eligible for
reimbursement in any other taxable year, and (iv) you may not cash out the right to this
reimbursement or exchange it for another benefit.”
3. Section 5(c)(iv) of the Retention Agreement is amended by adding the following language at the end of the sentence that would otherwise end with the words “Notice of Termination”: |
“either by paying the cost of your continued participation in the Company’s health benefit
plans or the cost of comparable health benefits to those you previously received under the
Company health benefit plans, from other sources, if such continued
participation cannot be provided by the Company for the entire period, or, with respect to
life, disability and accident benefits the Company previously provided for you, by paying
you a lump sum, within 30 days, which is equal to the estimated cost to you of obtaining
those benefits to the extent they are available on a commercially reasonable basis, as
determined by the Company, in good faith.”
4. | Section 5(d) of the Retention Agreement is restated in its entirety to read as follows: |
“(d) Any benefits you receive under this Agreement will be treated, as applicable, as part
of the “Payments” covered by Section 3(b) of the Long-Term Retention Agreement entered into
by you and Company, dated October 22, 2007, for purposes of the “Section 4999 Gross-Up
Payment” as defined in such agreement.”
5. | Section 6(a) of the Retention Agreement is amended by adding the following proviso at the end of the second full sentence: |
“; provided that such payments will only be made if the date on which the succession becomes
effective would be considered the date of (i) a change in the ownership of the Company as
defined in Treasury Regulation Section 1.409A-3(i)(5)(v), (ii) a change in effective control
of the Company as defined in Treasury Regulation Section 1.409A-3(i)(5)(vi), or (iii) a
change in the ownership of a substantial portion of the assets of the Company as defined in
Treasury Regulation Section 1.409A-3(i)(5)(vii), as amended or supplemented from time to
time.”
6. | The following new Section 9 shall be added to the Retention Agreement: |
“9. Section 409A.
(a) Benefits provided under this Agreement, except as provided in Section 6(a),
shall only be made on a “separation from service” with the Company as defined in
Section 409A of the Code. If, as of the date of such separation from service, you
are a “specified employee” within the meaning of Section 409A of the Code, then each
payment or benefit due under this Agreement that would, absent this provision be
paid within the six-month period following such “separation from service” shall not
be paid until the date that is six months and one day after such separation from
service (or, if earlier, on your death). Such delayed payments will be credited
with interest at the annual prime rate as set forth in the Eastern edition of the
Wall Street Journal on the date of the “separation from service,” compounded daily,
for the period beginning on the date each such payment or benefit would have paid
during that six month period and ending on the date of such payment. Such interest
payment will be paid within five business days of the end of such six month period.
(b) This Agreement has been amended to comply with the provisions of Section 409A of
the Code, and final Treasury regulations and guidance issued thereunder. It shall be
interpreted and construed in accordance with that intention.”
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, Executive has hereunto set his hand and the Company has caused this
Agreement to be executed, all as of the day and year first above written.
/s/ Xxxxxx X. Xxxxxxx | ||||
Xxxxxx X. Xxxxxxx | ||||
ANALOG DEVICES, INC. |
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By: | /s/ Xxxxx Xxxxxx | |||
Name: | Xxxxx Xxxxxx | |||
Title: | Chairman of the Compensation Committee | |||
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