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EXHIBIT 4.4
[LOGO] ANALOG
DEVICES
TRUST AGREEMENT
FOR
DEFERRED COMPENSATION PLAN
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TABLE OF CONTENTS
Section 1...................................................................1
ESTABLISHMENT OF TRUST.............................................1
Section 2...................................................................2
PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES..............2
Section 3...................................................................3
TRUST RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN COMPANY IS INSOLVENT..............................3
Section 4...................................................................4
PAYMENTS TO COMPANY................................................4
Section 5...................................................................4
INVESTMENT AUTHORITY...............................................4
Section 6...................................................................5
DISPOSITION OF INCOME..............................................5
Section 7...................................................................5
ACCOUNTING BY TRUSTEE..............................................5
Section 8...................................................................6
RESPONSIBILITY OF TRUSTEE..........................................6
Section 9...................................................................8
COMPENSATION AND EXPENSES OF TRUSTEE...............................8
Section 10..................................................................9
RESIGNATION AND REMOVAL OF TRUSTEE.................................9
Section 11..................................................................9
APPOINTMENT OF SUCCESSOR...........................................9
Section 12..................................................................10
AMENDMENT OR TERMINATION...........................................10
Section 13..................................................................10
MISCELLANEOUS......................................................10
Section 14..................................................................12
EFFECTIVE DATE.....................................................12
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TRUST AGREEMENT
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THIS AGREEMENT made this 11th day of December, 1995, by and between
Analog Devices, Inc. ("Analog") and Boatmens' Trust Company ("Trustee);
WHEREAS, Analog and certain of its affiliates (collectively "Company")
have adopted the non-qualified deferred compensation plan(s) as listed in
Appendix A (the "Plans");
WHEREAS, Company has incurred or expects to incur liability under the
terms of such Plan(s) with respect to the individuals participating in such
Plan(s);
WHEREAS, Company wishes to establish a Trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be held therein,
subject to the claims of Company's creditors in the event of Company's
insolvency, as herein defined, until paid to Plan participants and their
beneficiaries in such manner and at such times as specified in the Plan(s);
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the
Plan(s) as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA");
WHEREAS, it is the intention of Company to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of
its liabilities under the Plan(s);
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
SECTION 1.
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ESTABLISHMENT OF TRUST.
(a) Company hereby deposits with Trustee in Trust $______, which shall
become the principal of the Trust to be held, administered and disposed of by
Trustee as provided in this Trust Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor Trust, of which
Company is the grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and
shall be construed accordingly.
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(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used exclusively for
the uses and purposes of Plan participants and general creditors as herein set
forth. Plan participants and their beneficiaries shall have no preferred claim
on, or any beneficial ownership interest in, any assets of the Trust. Any rights
created under the Plan(s) and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against Company.
Any assets held by the Trust will be subject to the claims of Company's general
creditors under federal and state law in the event of insolvency, as defined in
Section 3(a) herein.
(e) Upon a Change of Control, Company shall, as soon as possible, but
in no event longer than thirty (30) days following the Change of Control, as
defined herein, make an irrevocable contribution to the Trust in an amount that
is sufficient to pay each Plan participant or beneficiary the benefits to which
Plan participants or their beneficiaries would be entitled purusant to the terms
of the Plan(s) as of the date on which the Change of Control occurred.
(f) The Plan shall be administered by a plan administrator appointed by
Company or, in the event that no such plan administrator is appointed, by
Company, and Trustee shall not be responsible in any respect for the
administration of the Plan.
(g) Company hereby represents that it has the requisite authority and
is empowered to appoint Trustee to act as trustee with respect to the Plan and
to enter into this Trust Agreement with Trustee.
SECTION 2.
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PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) Company shall deliver, or cause to be delivered, to Trustee a
schedule (the "Payment Schedule") that indicates the amounts payable in respect
of each Plan participant (and his or her beneficiaries), that provides a formula
or other instructions acceptable to Trustee for determining the amounts so
payable, the form in which such amount is to be paid (as provided for or
available under the Plan(s)), and the time of commencement for payment of such
amounts. Except as otherwise provided herein, Trustee shall make payments to the
Plan participants and their beneficiaries in accordance with such Payment
Schedule. The Trustee shall make provision for the reporting and withholding of
any federal, state or local taxes that may be required to be withheld with
respect to the payment of benefits pursuant to the terms of the Plan(s) and
shall pay amounts withheld to the appropriate taxing authorities or determine
that such amounts have been reported, withheld and paid by Company.
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(b) The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan(s) shall be determined by Company or
such party as it shall designate under the Plan(s), and any claim for such
benefits shall be considered and reviewed under the procedures set out in the
Plan(s).
(c) Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under the terms of the
Plan(s). Company shall notify Trustee of its decision to make payment of
benefits directly prior to the time amounts are payable to Plan participants or
their beneficiaries. In addition, if the principal of the Trust, and any
earnings thereon, are not sufficient to make payments of benefits in accordance
with the terms of the Plan(s), Company shall make the balance of each such
payment as it falls due. Trustee shall notify Company where principal and
earnings are not sufficient.
SECTION 3.
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TRUST RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN
COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to Plan participants
and their beneficiaries if the Company is insolvent. Company shall be considered
"insolvent" for purposes of this Trust Agreement if (i) Company is unable to pay
its debts as they become due, or (ii) Company is subject to a pending proceeding
as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided
in Section 1(d) hereof, the principal and income of the Trust shall be subject
to claims of general creditors of Company under federal and state law as set
forth below:
(1) The Board of Directors and the Chief Executive Officer of
Analog shall have the duty to inform Trustee in writing of Company's
insolvency. If a person claiming to be a creditor of Company alleges in
writing to Trustee that Company has become insolvent, Trustee shall
determine whether Company is insolvent and, pending such determination,
Trustee shall discontinue payment of benefits to Plan participants or
their beneficiaries.
(2) Unless Trustee has actual knowledge of Company's
insolvency, or has received notice from Company or a person claiming to
be a creditor alleging that Company is insolvent, Trustee shall have no
duty to inquire whether Company is insolvent. Trustee may in all events
rely on such evidence concerning Company's solvency as may be furnished
to Trustee and that provides Trustee with a reasonable basis for making
a determination concerning Company's solvency.
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(3) If at any time Trustee has determined that Company is
insolvent, Trustee shall discontinue payments to Plan participants or
their beneficiaries and shall hold the assets of the Trust for the
benefit of Company's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of Plan participants or their
beneficiaries to pursue their rights as general creditors of Company
with respect to benefits due under the Plan(s) or otherwise.
(4) Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 of
this Trust Agreement only after Trustee has determined that Company is
not insolvent (or is no longer insolvent).
(c) Provided that there are sufficient assets, if Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan(s) for the
period of such discontinuance, less the aggregate amount of any payments made to
Plan participants or their beneficiaries by Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
SECTION 4.
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PAYMENTS TO COMPANY.
Except as provided in Section 3 hereof, Company shall have no right or
power to direct Trustee to return to Company or to divert to others any of the
Trust assets before all payment of benefits have been made to Plan participants
and their beneficiaries pursuant to the terms of the Plan(s).
SECTION 5.
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INVESTMENT AUTHORITY.
(a) In no event may Trustee invest in securities (including stock
or rights to acquire stock) or obligations issued by Company, other than a de
minimis amount held in common investment vehicles in which Trustee invests. All
rights associated with assets of the Trust shall be exercised by Trustee or the
person designated by Trustee, and shall in no event be exercisable by or rest
with Plan participants. Company shall have the right, at anytime, and from time
to time in its sole discretion, to substitute assets of equal fair market value
for any asset held by the Trust.
(b) The Trust's assets shall be invested by the Trustee in
accordance with the written investment guidelines provided, or caused to be
provided, from time to time to the Trustee by the Investment Committee appointed
by the Board of Directors of the Company. If no such guidelines are received by
the Trustee or if a Change of Control as
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hereinafter defined occurs, the assets of the Trust shall be invested in such
investments as determined by the Trustee in accordance with powers contained
herein.
(c) Company may from time to time appoint one or more investment
managers (each such investment manager is referred to as an "Investment
Manager") to manage and invest any part or all of the assets of the Trust and,
with respect to such assets, to direct Trustee with respect to effecting
investment transactions on behalf of the Trust and exercising such other powers
as may be granted to an Investment Manager hereunder. Company shall advise
Trustee in writing of the appointment, removal or resignation of an Investment
Manager and such notice shall remain in force, and Trustee shall be fully
protected in relying upon such notice, until receipt of written notice of
revocation thereof or amendment thereto. Any such Investment Manager may direct
Trustee to invest and reinvest that portion of the Trust under the direction of
such Investment Manager in any securities or other property (including, without
limitation, any mutual, common or commingled investment fund maintained by an
Investment Manager or by Trustee or any affiliate of Trustee). In each case
where such appointment is made, Company shall determine those assets of the
Trust to be allocated to the Investment Manager from time to time and shall
issue appropriate instructions in writing to Trustee with respect thereto.
Trustee shall be under no duty or obligation to review or question any direction
of any Investment Manager, or otherwise evaluate the performance of any
Investment Manager, or to make recommendations with respect to any investment to
any Investment Manager, and Trustee shall be fully protected for acting in
accordance with, or failing to act in the absence of, any direction of such
Investment Manager.
(d) Except as limited by Section 5(a) or as otherwise provided in this
Trust Agreement, the Trustee shall have the investment powers outlined in
Appendix B and authority with respect to all property constituting a part of the
Trust in its discretion.
SECTION 6.
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DISPOSITION OF INCOME.
(a) During the term of this Trust, all income received by the Trust,
net of expenses and taxes, shall be accumulated and reinvested.
SECTION 7.
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ACCOUNTING BY TRUSTEE.
(a) Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Company and Trustee within sixty (60) days following the close of each calendar
year and within thirty (30) days after the removal or resignation of Trustee,
Trustee shall deliver to Company a written account of its administration of the
Trust during such year or during the period from the close of the
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last preceding year to the date of such removal or resignation, setting forth
all investments, receipts, disbursements and other transactions effected by it,
including a description of all securities and investments purchased and sold
with the cost or net proceeds of such purchases or sales (accrued interest paid
or receivable being shown separately), and showing all cash, securities and
other property held in the Trust at the end of such year or as of the date of
such removal or resignation, as the case may be.
(b) Upon the expiration of one hundred and twenty (120) days from the date
of filing such annual or other account, Trustee shall be forever released and
discharged from all liability and accountability to anyone with respect to the
propriety of all acts and transactions shown in such account, except with
respect to such acts or transactions as to which Company shall within such one
hundred and twenty (120) day period file with Trustee written objections.
Notwithstanding the foregoing, Trustee shall have the right to apply at any time
to a court of competent jurisdiction for the judicial settlement of Trustee's
account, and, in any case, it shall be necessary to join as parties thereto only
Trustee and Company; and any judgment or decree which may be entered therein
shall be conclusive upon all persons having or claiming to have any interest in
the Trust or under a Plan.
SECTION 8.
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RESPONSIBILITY OF TRUSTEE.
(a) Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims, provided, however, that Trustee
shall incur no liability to any person for any action taken pursuant to a
direction, request or approval given by Company which is contemplated by, and in
conformity with, the terms of the Plan(s) or this Trust and is given in writing
by Company. In the event of a dispute between Company and a party, Trustee may
apply to a court of competent jurisdiction to resolve the dispute.
(b) If Trustee undertakes or defends any litigation arising in
connection with this Trust, Company agrees to indemnify Trustee against
Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
such payments. If Company does not pay such costs, expenses and liabilities in a
reasonably timely manner, Trustee may obtain payment from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel for
Company generally) with respect to any of its duties or obligations hereunder.
(d) Trustee may with the consent of the Company, which consent shall
not be unreasonably withheld, hire agents, accountants, actuaries, investment
advisors, financial
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consultants or other professionals to assist it in performing any of its duties
or obligations hereunder, and to pay any such person or entity their reasonable
fees for its services.
(e) Trustee shall have, without exclusion, all powers conferred on
Trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
Trustee shall have no power to name a beneficiary of the policy other than the
Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.
(f) However, notwithstanding the provisions of Section 8(e) above,
Trustee may loan to Company the proceeds of any borrowing against an insurance
policy held as an asset of the Trust.
(g) Notwithstanding any powers granted to Trustee pursuant to this
Trust Agreement or to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
(h) Company shall indemnify and hold harmless Trustee from and
against any loss, cost, damage, expense or liability (including reasonable
attorney fees) it incurs arising out of any alleged or actual act, or failure to
act, on the part of any alleged or actual act, or failure to act, on the part of
the Trustee pursuant to the direction of the Company, any Plan administrator or
any Investment Manager.
(i) Communications and instructions
(i) Any action by Company pursuant to this Trust
Agreement shall be satisfactorily evidenced to Trustee by a certified copy of a
resolution of the Board of Directors of Company or by any certificate, notice,
order, request, instruction, direction or objection of Company. After the
execution of this Trust Agreement, Company shall promptly file with Trustee a
certified list of the names and specimen signatures of the officers of Company
and any delegee authorized to act for it or with respect to the Plan. Company
shall promptly notify Trustee of the addition or deletion of any person's name
to or from such list. Until actual receipt by Trustee of notice that any such
person is no longer authorized to so act, Trustee may continue to rely on the
authority of any such person.
(ii) A plan administrator may certify to Trustee the names
of persons authorized to act for it in relation to Trustee. Until actual receipt
by Trustee of notice that any such person is no longer authorized to so act,
Trustee may continue to rely on the authority of any such person.
(iii) Any certificates, notices, orders, requests,
instructions, directions, or objections of Company, any plan administrator, any
Investment Manager or any other person authorized to act pursuant to this Trust
Agreement shall be satisfactorily
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evidenced to Trustee by a signed, written statement (provided, however, that
Trustee may, in its sole discretion, accept oral notices, orders, requests,
instructions, directions and objections subject to confirmation in writing), and
Trustee shall be fully protected for acting in accordance therewith or for
failing to act in the absence thereof.
(iv) Communications to Trustee shall be sent to Trustee's
office or to such other address as Trustee shall specify in writing, and such
communications to Trustee shall be binding upon any certificate, notice, order,
request, instruction, direction or objection purporting to have been signed on
behalf of any authorized person which Trustee believes to be genuine and to have
been executed by any such person.
(v) Notwithstanding anything herein to the contrary,
Trustee shall be fully protected in acting in accordance with any directions or
instructions with respect to securities transactions) including, without
limitation, the affirmation and/or confirmation of such transactions) received
by it through a system or arrangement for the coordination of securities
transaction settlements executed by the Depository Trust Company or by any other
central securities depository, securities clearing organization or book-entry
system which serves to link investment managers, securities brokers and
custodian banks, pursuant to an agreement entered into by Trustee and an
Investment Manager or Company, as the case may be, to the same extent as if any
such directions or instructions were in writing.
(j) Company shall maintain and furnish Trustee with such reports,
documents and information as shall be required by Trustee to perform its duties
and discharge its responsibilities under this Trust Agreement, including without
limitation a certified copy of the Plan and any and all amendments thereto and
written reports setting forth the name, address, date of birth, and social
security and tax identification numbers of Plan participants and their
beneficiaries, and a listing of Plan participants' accrued benefit under the
Plan. Trustee shall be entitled to rely on the most recent reports, documents
and information furnished to it by Company. Company shall be required to notify
Trustee as to the termination of the employment of any Plan participant by
death, retirement or otherwise.
SECTION 9.
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COMPENSATION AND EXPENSES OF TRUSTEE.
Company shall pay all administrative and Trustee's fees and expenses.
If not so paid, the fees and expenses shall be paid from the Trust; provided
however, that in the event the assets of the Trust are insufficient to pay any
such fees or expenses, Company shall promptly pay any such fees or expenses.
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SECTION 10.
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RESIGNATION AND REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to Company, which
shall be effective sixty (60) days after receipt of such notice unless Company
and Trustee agree otherwise.
(b) Prior to a change in control, Trustee may be removed by Company on
thirty (30) days notice or upon shorter notice accepted by Trustee.
(c) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within ninety (90) days after receipt
of notice of resignation, removal or transfer, unless Company extends the time
limit.
(d) If Trustee resigns or is removed, a successor shall be appointed,
in accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraphs (a) or (b) of this section. If no such appointment has
been made, Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.
SECTION 11.
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APPOINTMENT OF SUCCESSOR.
(a) If Trustee resigns or is removed in accordance with Section 10(a)
or (b) hereof, Company may appoint any third party, such as a bank trust
department or other party that may be granted corporate trustee powers under
state law, as a successor to replace Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the new Trustee, who
shall have all of the rights and powers of the former Trustee, including
ownership rights in the Trust assets. The former Trustee shall execute any
instrument necessary or reasonably requested by Company or the successor Trustee
to evidence the transfer.
(b) The successor Trustee need not review the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets, subject to
Sections 7 and 8 hereof. The successor Trustee shall not be responsible for and
Company shall indemnify and defend the successor Trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes successor
Trustee.
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SECTION 12.
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AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument
executed by Trustee and Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan(s) or shall make the Trust
revocable after it has become irrevocable in accordance with Section 1(b)
hereof.
(b) The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan(s), unless sooner revoked in accordance with Section
1(b) hereof. Upon termination of the Trust, any assets remaining in the Trust
shall be returned to Company.
(c) Upon written approval of Plan participants or beneficiaries
entitled to payment of benefits pursuant to the terms of the Plan(s), Company
may terminate this Trust prior to the time all benefit payments under the
Plan(s) have been made. All assets in the Trust at termination shall be returned
to Company.
(d) No section of this Trust Agreement may be amended by Company for
three (3) years following a change of control, as defined herein.
SECTION 13.
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MISCELLANEOUS.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachussetts.
(d) RIGHTS UPON A CHANGE IN CONTROL. Notwithstanding any other
provision of this Agreement to the contrary, upon a "Change in Control," as
hereinafter defined, this Agreement may not be terminated (except by mutual
consent of the Company and employee) by reason of the termination of the
Employee's employment with the Corporation before the later of (i) the Policy
anniversary date next following the Employee's 65th birthday, or (ii) the
expiration of fifteen (15) Policy years from the date of the Policy, unless the
Parties mutually consent to the continuation of this Agreement at
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that time. For purposes of this Agreement, a "Change in Control" shall be deemed
to have occurred only if any of the following events occur:
(i) any "person," as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (other than
the Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned directly or indirectly by
the stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities; or
(ii) individuals who, as of the date hereof, constitute the Board (as of the
date hereof, the "Incumbent Board") cease for any reason to constitute at least
a majority of the Board, provided that any person becoming a director subsequent
to the date hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual or
threatened election context relating to the election of the directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) shall be, for purposes of this Agreement, considered as though
such person were a member of the Incumbent Board; or
(iii) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 80% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company, (or similar transaction) in which no "person"
(as herein above defined) acquires more than 50% of the combined voting power of
the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
(e) Attached to this Agreement as Appendix B are the administrative
guidelines that will govern the day to day activities of the Trustee. Such
guidelines may be amended at any time upon the mutual consent of the parties.
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SECTION 14.
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EFFECTIVE DATE.
This Trust Agreement is signed on this 11th day of December, 1995, to
be effective on the 11th day of December, 1995.
ANALOG DEVICES, INC. BOATMENS' TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxxxx
-------------------------------- --------------------------------
Title: TREASURER Title: VICE PRESIDENT
----------------------------- -----------------------------
APPENDIX A
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THE COMPANY HAS ADOPTED THE FOLLOWING NON-QUALIFED DEFERRED COMPENSATION
PLAN(S):
(1) The Analog Devices, Inc. Deferred Compensation Plan*.
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* Incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-8 (File No. 33-64849) filed with the Commission on
December 8, 1995.
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Xxxxxxxx X
[LOGO] ANALOG
DEVICES
RABBI TRUST ADMINISTRATIVE GUIDELINES
AS OF DECEMBER 31, 1995
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CONTENTS
INTRODUCTION................................................................ 1
DESCRIPTION OF THE TRUST.................................................... 2
COVERED PLANS............................................................... 2
Analog Devices, Inc. Deferred Compensation Plan.......................... 2
FINANCIAL ASSUMPTIONS UPON A CHANGE OF CONTROL.............................. 3
Applied Rates............................................................ 3
PLAN ASSUMPTIONS............................................................ 4
Analog Devices, Inc. Deferred Compensation Plan.......................... 4
INVESTMENT GUIDELINES....................................................... 5
Purpose.................................................................. 5
Investment Objectives.................................................... 5
Other Investment Powers.................................................. 6
ALLOCATION OF CONTRIBUTIONS AFTER A CHANGE OF CONTROL....................... 8
Allocation After Change in Control Flowchart............................. 9
PROCEDURES.................................................................. 10
EXHIBITS
Exhibit A - Deferred Compensation Plan Document
Exhibit B - Deferred Compensation Plan Participant and Account Balance
List
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INTRODUCTION
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Analog Devices, Inc. ("Analog") has entered into a Trust Agreement with
Boatmen's Trust Company ("Boatmen's") to create a trust (the "Trust") to aid
Analog, except in case of insolvency or bankruptcy, in meeting its obligations
under the terms and conditions of certain unfunded employee benefit plans. These
plans have been established and maintained for the benefit of a select group of
management and/or highly compensated employees and former employees of Analog.
Analog or its benefits consultant, The Xxxx Organization of Pittsburgh, Inc.
("Consultant") will provide Boatmen's in its capacity as ("Trustee"), on at
least an annual basis, with Administrative Guidelines (the "Guidelines") that
will be used by the Trustee in the administration of the Trusts.
These Guidelines are designed to provide Analog, its executives, consultant and
the Trustee with the necessary financial and benefit administrative direction to
be applied to the determination and administration of benefits immediately prior
to and subsequent to a change in control. In addition to administrative
guidelines, Analog and/or its benefits consultant shall maintain and will
provide the Trustee with individual participant data necessary for the Trustee
to determine, subsequent to a Change in Control, (as defined in the Trust
Agreement and hereinafter referred to as a "Change in Control") the time and
form of payment of benefits, if any, payable to individual participants. Analog,
its executives and consultant, Boatmen's, and the Plan's participants understand
that Boatmen's as Trustee is not a Party to any of the Plans and has no duties
or obligations with respect to the administration and operation of the Plans.
Moreover, the Trustee will not be responsible for the actual determination of
benefits. Benefit determination will be made by Analog and/or its consultant.
The Guidelines are to be reviewed by Analog no less frequently than yearly. The
most recent revision of the Guidelines delivered to Boatmen's, prior to a Change
in Control, shall govern the actions of Analog and the Trustee subsequent to
such Change in Control. Where these Guidelines may conflict with the Trust
Agreements, the covered plans or applicable state and federal law, the Trust
Agreements, the covered plans and/or applicable law shall govern.
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DESCRIPTION OF THE TRUST
------------------------
The Trust is intended to be a grantor trust with the corpus and income of the
Trust treated as assets and income of Analog for federal income tax purposes.
The Trust shall be irrevocable, and except as provided in Section 3 of the
Trust, Trust assets shall be held for the exclusive purpose of providing
benefits to participants and their beneficiaries. Except as provided in Section
3 of the Trust, no part of the income or corpus of the Trust shall be
recoverable by or for the benefit of Analog.
COVERED PLANS
-------------
The Trust will cover the Analog employee benefit plan listed below. This plan is
intended to be a "non-qualified" plan covering a select group of present and/or
former highly compensated or management employees, and to be "unfunded" for
ERISA and tax purposes. The list of covered plans may be modified by Analog from
time to time, prior to a Change in Control, as plans are added or terminated at
the discretion of Analog management.
ANALOG DEVICES, INC. DEFERRED COMPENSATION PLAN
The corporation provides eligible executives with the opportunity to defer
compensation above the qualified plan limits and provides for employer
matching contributions denied due to government limits. The restoration
portion provides retirement benefits to the extent that contributions made
under the Analog TIP are limited by either government limits on maximum
benefits (Section 415) or government limits on the maximum amount of
compensation that can be included when determining benefits (Section
401(a)(17)).
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FINANCIAL ASSUMPTIONS UPON A CHANGE OF CONTROL
----------------------------------------------
This section is designed to provide the applicable financial assumptions to be
used by Analog and/or its consultants to determine the amount of benefits and
the present value thereof upon the occurrence of a Change in Control. These
assumptions affect the level of funds required to meet benefits due participants
and beneficiaries as to present values, assumed future interest earnings, future
interest credits on deferral accounts, actuarial tables, etc.
APPLIED RATES
Escalation of Government Limits 3.00%
Escalation of Government Benefits 3.00%
Salary Escalation Assumption 6.50%
Earnings of the Trust (Net) 5.00%
FUTURE GROWTH ON DEFERRED COMPENSATION ACCOUNTS
* Actual return credited by the underlying TIP mutual funds mirrored in
the Deferred Compensation Plan.
* Xxxxx'x index account as defined in the Deferred Compensation Plan
document.
MORTALITY TABLE(S)
1983 Group Annuity Mortality Table for Males (1983 XXXX)
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PLAN ASSUMPTIONS
----------------
ANALOG DEVICES, INC. DEFERRED COMPENSATION PLAN
ELIGIBILITY
Analog Employees and/or retirees, who are executives or highly compensated,
with a benefit in any covered plan and/or plans as of the date of Change in
Control, provided such employee has been identified as a participant in
said plan or plans.
BENEFIT PAYMENT
As per the provisions of the nonqualified plan under which the deferral was
made.
FUTURE INTEREST CREDITS UNTIL BENEFITS ARE PAID
Future interest credits should be based on the applicable plan's provisions
to determine Analog's obligation to the participant.
DEFERRAL PLAN CREDITING RATES
Deferred awards will be credited with interest credits based upon the
investment allocation selected in writing by the plan participant.
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INVESTMENT GUIDELINES
---------------------
PURPOSE
The purpose of these guidelines is to provide the Trustee with the necessary
parameters to establish and implement an investment policy consistent with the
objectives of the covered plans, at a level of risk the Company deems acceptable
to the participants of said plans.
INVESTMENT OBJECTIVES
The Trust assets must be invested with the care, skill and diligence that a
prudent man acting in this capacity would undertake. The Investment Managers'
primary objective will be to provide stability of principal and income. The
Company prefers consistency of year-to-year results rather than subjecting the
Trust assets to a high degree of volatility.
RESTRICTIONS
In the event that the Company fails to provide the Trustee with written
investment guidelines or if a Change of Control as herein defined in Section
13(d) occurs, the assets of the trust shall be invested subject to the following
restrictions:
1. The trust may make unlimited purchases of U.S. Treasury obligations or
issues of agencies guaranteed by the U.S. Government.
2. The trust may invest no more than 25% of the portfolio at market in
Commercial Paper, and no more than 5% of the portfolio at market in the
securities of a single company. Commercial Paper must have S&P "A-1" or
Xxxxx'x "P-1" rating or higher.
3. The trust may invest no more than 25% of the portfolio in Certificates
of Deposit and no more than 5% of the portfolio in a single bank. Any
bank used must have capitalization of $500,000,000 or more and have a
Xxxxx'x long term deposit rating of A-1 or better.
4. The trust may invest no more than 25% of the portfolio at market in
Corporate Debt issues and no more than 5% of the portfolio at market in
the debt issues of a single company. Issues purchased by the Trustee
must have an S&P's "AA" or Xxxxx'x "Aa" rating or higher.
5. The trust may invest no more than 50% of the portfolio at market in
mutual funds whose stated investment objective is to replicate the
return of the S&P500 stock index.
6. The trust may invest no more than 25% of the portfolio at market in bond
mutual funds whose stated investment objective is to replicate the
return of the Xxxxxx Brothers Single A Intermediate Corporate Bond
Index.
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7. Investment managers are prohibited from investing in private placements,
from speculating in fixed income or interest rate futures, and from
arbitrage or other specialized investments.
OTHER INVESTMENT POWERS
1. To be the owner of any individual life insurance contracts or individual or
group annuity contracts and to take such action with respect to such
contracts as the Trustee deems necessary to carry out the terms of the Trust
Agreement, including but not limited to payment of insurance premiums and
repayment of any policy loans.
2. To make, execute, and deliver, as Trustee, any and all deeds, leases, notes,
bonds, guarantees, mortgages, conveyances, contracts, waivers, releases or
other instruments in writing necessary or proper for the accomplishment of
any of the foregoing powers.
3. To cause the securities or other property which may comprise the trust
estate, in whole or in part, to be registered in the name of Trustee, or in
the name of Trustee as Trustee, or in the name of a nominee or nominees,
with or without disclosing the Trust, or (in the case of securities) to take
and keep the same unregistered and to retain them or any part of them in
such manner that they will pass by delivery.
4. To open and maintain one or more separate brokerage accounts for the proper
investment of the securities of the trust estate; and to instruct any broker
or brokerage firm utilized by Trustee to open and maintain such separate
brokerage accounts.
5. To exercise, or refrain from the exercise of, all conversion, subscription,
voting and other rights of any nature pertaining to any securities of any
corporation held as part of the trust estate, (including securities of
Trustee or any affiliate of Trustee) to participate in foreclosures,
mergers, liquidations and similar transactions with respect to such
securities; to grant proxies, discretionary or otherwise, in respect of such
securities; and to take all actions in complying with applicable securities
laws and regulations.
(6) To determine whether any money or other property coming into the hands of
Trustee shall be considered as part of the principal or income of the trust
estate, and to apportion between such principal and income any loss or
expenditure in connection with the trust estate as Trustee deems just and
equitable (including the right to specifically allocate to any beneficiary
for any fiscal year capital gains incurred during such fiscal year.
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(7) To accept by transfer or conveyance any property, satisfactory to Trustee,
from any source, to be added to and become a part of the trust estate,
subject to all of the terms and conditions provided in this Trust
Agreement.
(8) To maintain in the trust estate an amount or amounts of uninvested cash,
from time to time, as may be reasonably necessary to provide for future
payments to be made from the trust estate.
(9) To commence or defend suits or legal proceedings and to represent the Trust
in suits or legal proceedings in any court or before any other body or
tribunal provided, however, that Trustee shall have no obligation to take
any such action unless it shall be first indemnified to its satisfaction.
(10) To appoint one or more individuals or corporations as a custodian or
subtrustee of any property, and as part of its reimbursable expenses under
this Trust Agreement, to pay the reasonable compensation and expenses of
any such custodian or subtrustee.
(11) Generally to do all acts, exclusive of acts involving administration of the
Plan, which Trustee may deem necessary or desirable for the protection of
the Trust.
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ALLOCATION OF CONTRIBUTIONS AFTER A CHANGE OF CONTROL
-----------------------------------------------------
Analog intends that Trust assets be applied in proportion to the present value
of the respective accrued benefits under the covered plan. Accordingly, Analog's
consultant will annually determine the vested account balances, which represent
the present value of the aggregate benefit liabilities under the covered plan,
and compare such liabilities to the value of the assets in the Trust.
Subsequent to a Change of Control and to the extent that Trust assets are not
equal to the net present value of liabilities for all benefits under the covered
plan as of the date of an accredited actuary's valuation immediately subsequent
to such Change of Control, payment of each benefit (in pay status) for the
ensuing year will be reduced based on the ratio of the present value of such
benefit to the total benefit liabilities times the percent that the total
liabilities are funded (not to exceed 100%).
To the extent that Trust assets exceed the net present value of liabilities of
all benefits under the covered plan as of any such annual valuation, the excess
assets will be applied pro rata to make up, to the extent possible, any deficits
in benefit payments to participants in prior years arising from the operations
of the preceding paragraph. Excess assets remaining after all plan liabilities
have been satisfied will revert to the Company.
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ALLOCATION AFTER CHANGE IN CONTROL FLOWCHART
--------------------------------------
TRUST ASSETS AFTER CHANGE IN
CONTROL
--------------------------------------
--------------------------------------
ACTUARIALLY DETERMINE VESTED
DEFERRED COMPENSATION PLAN
STEP 1 BALANCES FOR ALL ACTIVE AND
RETIRED PARTICIPANTS
--------------------------------------
--------------------------------------
COMPARE TRUST ASSETS WITH VESTED
STEP 2 PLAN BALANCES UNDER THE PLAN
--------------------------------------
--------------------------------------
COMPANY CONTRIBUTES SHORTFALL,
IF ANY, IN ACCORDANCE WITH SEC. 10.1
STEP 3 OF PLAN DOCUMENT, AS MAY BE
AMENDED FROM TIME TO TIME
--------------------------------------
--------------------------------------
((TOTAL TRUST ASSETS LESS RESERVE
STEP 4 FOR TRUST EXPENSES)/VESTED PLAN
BALANCES)=
PAYOUT % FOR THE NEXT CALENDAR
YEAR
STEP 5 --------------------------------------
-------------------------------- -------------------------------
EXCESS ASSETS?
INSUFFICIENT ASSETS? PARTICIPANTS RECEIVE MAXIMIMUM
BENEFITS PER PLAN PROVISIONS.
PARTICIPANTS RECEIVE PRO RATA
MAKE UP FOR BENEFITS REDUCED IN
REDUCE ALL PARTICIPANT BENEIFITS PRIOR YEARS
PORPORTIONATELY
EXCESS ASSETS RETURNED TO
COMPANY
-------------------------------- -------------------------------
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PROCEDURES
----------
Prior to and at Change in Control a great number of tasks will have to be
performed. These include everything from notifying the Trustee that a Change in
Control has taken place, to the calculation of benefits, to the transfer of
dollars and benefit detail.
This section spells out these procedures and lists those parties responsible for
completion/execution.
CHANGE IN CONTROL IS THREATENED
Once a Change in Control is threatened, as determined by the CEO and General
Counsel, the Change in Control task force will be mobilized. This task force is
to include appropriate representatives from the following departments and
consulting firms:
Analog Legal Xxxxxxx Xxxx, Esq.
Assistant Counsel
Tax Xxxx Xxxxxx,
Director of Taxes
Finance Xxxxxxx X. Xxxxxx,
Treasurer
Employee Benefits Xxxxx Xxxxxxx,
Benefits Manager
Actuarial Current Actuary Towers Xxxxxx
Xxxx Organization Engagement Principal Xxxx X. Xxxxxx
Director of Client Services Xxxxxxx Xxxxxxxxxx
Boatmen's Trust Officer or Liaison
Task Force Leader Xxxxxxx X. Xxxxxx,
Treasurer
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EXHIBITS
--------
28
EXHIBIT A TO RABBI TRUST ADMINISTRATIVE GUIDELINES:
DEFERRED COMPENSATION PLAN DOCUMENT*
---------------
* Incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-8 (File No. 33-64849) filed with the Commission on
December 8, 1995.
29
EXHIBIT B TO RABBI TRUST ADMINISTRATIVE GUIDELINES:
DEFERRED COMPENSATION PLAN PARTICIPANT AND ACCOUNT BALANCE LIST
