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Exhibit 4.6
[ANALOG DEVICES LOGO]
TRUST AGREEMENT
FOR
DEFERRED COMPENSATION PLAN
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TABLE OF CONTENTS
Section 1............................................................. 1
ESTABLISHMENT OF TRUST
Section 2............................................................. 2
PAYMENTS TO PLAN PARTICIPANTS AND THEIR
BENEFICIARIES
Section 3............................................................. 3
TRUST RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN COMPANY IS INSOLVENT
Section 4............................................................. 4
PAYMENTS TO COMPANY
Section 5............................................................. 4
INVESTMENT AUTHORITY
Section 6............................................................. 5
DISPOSITION OF INCOME
Section 7............................................................. 6
ACCOUNTING BY TRUSTEE
Section 8............................................................. 6
RESPONSIBILITY OF TRUSTEE
Section 9............................................................. 9
COMPENSATION AND EXPENSES OF TRUSTEE
Section 10............................................................ 9
RESIGNATION AND REMOVAL OF TRUSTEE
Section 11............................................................ 10
APPOINTMENT OF SUCCESSOR
Section 12............................................................ 10
AMENDMENT OR TERMINATION
Section 13............................................................ 11
MISCELLANEOUS
Section14............................................................. 12
EFFECTIVE DATE
Appendix A............................................................ 12
ANALOG DEVICES, INC. DEFERRED COMPENSATION PLAN
Appendix B............................................................ 13
RABBI TRUST ADMINISTRATIVE GUIDELINES
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THIS AGREEMENT made this 23rd day of October 1997, by and between Analog
Devices, Inc. ("Analog") and PNC Bank, National Association ("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 the 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.
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 (as defined in Section 13(e) below),
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 pursuant 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.
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. With respect to benefits attributable to the Participant and their
beneficiaries, the Company shall be solely responsible for determining the
amounts of income that are taxable and reportable, determining the nature and
amounts of taxes to be withheld and for withholding, remitting and reporting all
such income and taxes to the applicable government entities. The Trustee shall
have no duties with respect thereto.
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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 payments 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.
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, Trustees 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.
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.
INVESTMENT AUTHORITY.
(a) The Trustee may invest in Common Stock issued by the Company. 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
acceptable to the Trustee for any asset held by the Trust. This right is
exercisable by the Company in nonfiduciary capacity without the approval or
consent of any person in a fiduciary capacity.
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(b) The Trust's assets shall be invested by the Trustee in accordance
with the written investment directions 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. The Company may designate a third party as agent
for the purposes of communicating investment directions to the Trustee and the
Trustee shall be fully protected in acting in accordance with such investment
directions. If no such directions are received by the Trustee or if a Change of
Control as 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 (b) or as otherwise provided in
this Trust Agreement, the Trustee shall have the investment powers outlined in
Appendix B, which is hereby incorporated by reference herein, and authority with
respect to all property constituting a part of the Trust in its discretion.
SECTION 6.
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.
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SECTION 7.
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 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 judgement 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.
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, its
authorized officers, delegee or agents, and provided further, that the Trustee
shall incur no liability to any person for any action or failure to act taken
pursuant to a determination of the existence or non-existence of an event of
Insolvency pursuant to Section 3 hereunder. In the event of a dispute between
Company and a party, Trustee may apply to a court of competent jurisdiction to
resolve the dispute.
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(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,
reasonable 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 or the Trustee 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 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 the Trustee pursuant to the direction of the Company, its authorized
officers, delegees or agents, any Plan administrator or any Investment Manager.
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(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
or third party agents authorized to act for it or with respect to the Plan
including without limitation any third party authorized to communicate
investment directions to the Trustee on behalf of the Company pursuant to
Section 5(b) herein. 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 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.
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(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.
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.
SECTION 10.
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 of 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.
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SECTION 11.
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.
SECTION 12.
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 the 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.
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SECTION 13.
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 Pennsylvania.
(d) Rights Upon a Change of Control. A Change of Control shall be
deemed to have occurred only if any of the following events occurs:
(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, or 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
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(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.
SECTION 14.
EFFECTIVE DATE.
This Trust Agreement is signed on this 23rd day of October, 1997, to be
effective on the 31st day of October, 1997.
ANALOG DEVICES, INC. PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ ------------------------------------
Title: Treasurer Title: Vice President
--------------------------- ---------------------------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Title: Vice President, Finance & Chief Financial Officer
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APPENDIX A
THE COMPANY HAS ADOPTED THE FOLLOWING NON-QUALIFIED DEFERRED COMPENSATION
PLAN(S):
(1) The Analog Devices, Inc. Deferred Compensation Plan.
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[ANALOG DEVICES LOGO]
RABBI TRUST ADMINISTRATIVE GUIDELINES
INTRODUCTION
Analog Devices, Inc. ("Analog") has entered into a Trust Agreement with PNC
Bank, National Association ("PNC Bank") to create a trust (the "Trust") to aid
Analog, except in the 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 ▇▇▇▇ Organization of
Pittsburgh, Inc. ("Consultant") will provide PNC Bank 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, PNC Bank, and the Plan's participants understand
that PNC Bank 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 PNC Bank prior to a Change
in Control, shall govern the actions of Analog and the Trustee subsequent to
such Change in Control. Where these
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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.
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)).
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
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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 Assumptions 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.
- ▇▇▇▇▇'▇ index account as defined in the Deferred Compensation Plan
Document
MORTALITY TABLE(S)
1983 Group Annuity Mortality Table for males (1983 ▇▇▇▇)
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 non-qualified 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. These guidelines shall be effective only to
the extent that the Company or its delegee or agent fails to provide investment
directions to the Trustee pursuant to Section 5(b) of the Trust Agreement or if
a Change of Control occurs.
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 Mangers'
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 ▇▇▇▇▇'▇ "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 ▇▇▇▇▇'▇ 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
▇▇▇▇▇'▇ "Aa" rating or higher.
5. The trust may invest no more than 50% of the portfolio
at market in
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mutual funds whose stated investment objective is to replicate
the return of the S&P 500 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 ▇▇▇▇▇▇ Brothers Single A
Intermediate Corporate Bond Index.
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
instruments.
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, 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 invest all or any portion of the Trust assets in registered
investment companies or mutual funds for which the Trustee or its
affiliates receive compensation for providing investment advisory,
custodial, transfer agency or other services. (Analog acknowledges that
interests in such registered investment companies or mutual funds are
not bank deposits and are not insured by, guaranteed by, obligations of,
or otherwise supported by the United States of America, the Federal
Deposit Insurance Corporation, PNC Bank, National Association, or any
bank or government entity.)
8. 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.
9. 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.
10. 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.
11. 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.
12. 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.
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
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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.
ALLOCATION AFTER CHANGE IN CONTROL FLOWCHART
TRUST ASSETS AFTER CHANGE IN CONTROL
STEP 1 ACTUARIALLY DETERMINE VESTED DEFERRED COMPENSATION PLAN BALANCES
FOR ALL ACTIVE AND RETIRED PARTICIPANTS
STEP 2 COMPARE TRUST ASSETS WITH VESTED PLAN BALANCES UNDER THE PLAN
STEP 3 COMPANY CONTRIBUTES SHORTFALL, IF ANY, IN ACCORDANCE WITH SEC.
10.1 OF PLAN DOCUMENT, AS MAY BE AMENDED FROM TIME TO TIME
STEP 4 ((TOTAL TRUST ASSETS LESS RESERVE FOR TRUST EXPENSES)/VESTED PLAN
BALANCES) - PAYOUT % FOR THE NEXT CALENDAR YEAR
INSUFFICIENT ASSETS? EXCESS ASSETS?
REDUCE ALL PARTICIPANT BENEFITS PARTICIPANTS RECEIVE
PROPORTIONATELY MAXIMUM BENEFITS
PER PLAN PROVISIONS
PARTICIPANTS RECEIVE
PRO RATA MAKE UP FOR
BENEFITS REDUCED IN
PRIOR YEARS
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 ▇▇▇▇▇▇▇ ▇▇▇▇, Esq., Assistant Counsel
Tax ▇▇▇▇ ▇▇▇▇▇▇, Director of Taxes
Finance ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Treasurer
Employee Benefits ▇▇▇▇▇ ▇▇▇▇▇▇▇, Benefits Manager
Actuarial Current Actuary Towers ▇▇▇▇▇▇
▇▇▇▇ Organization Engagement Principal ▇▇▇▇ ▇. ▇▇▇▇▇▇
Director of Client Services ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
PNC Bank Trust Officer or Liaison
Task Force Leader ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Treasurer
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COMPASS CAPITAL FUND(SM)
EMPLOYEE BENEFIT PLAN
INVESTMENT AND VOTING DIRECTION FORM
The undersigned, an independent fiduciary of the employee benefit plan
identified below ("Plan"), acknowledges having received a Disclosure Statement,
accompanied by Prospectuses, describing each of the investment portfolios (the
"Portfolios") listed below established pursuant to Declarations of Trust under
the name of the "Compass Capital Funds(SM). (The Compass Capital Funds(SM) are
herein referred to as the "Funds".) The undersigned further acknowledges that
he, she or it is independent of PNC Bank Corp. and its affiliates ("PNC"), the
Compass Capital Funds(SM) and their affiliates and that he, she or it will not
receive direct or indirect compensation for their personal account in
connection with this investment.
Based upon these materials, including the Disclosure Statement and the
Prospectuses mentioned above, the undersigned hereby directs and approves the
investment in shares of any of the Portfolios listed below for investment
purposes where the undersigned currently has investment discretion and
authority as specified in the governing Plan and Trust documents. This
direction shall remain in full force and effect until written notice of
revocation is provided to PNC.
COMPASS CAPITAL FUND(SM)
PORTFOLIOS AVAILABLE FOR INVESTMENT
Money Market Portfolio
The undersigned independent fiduciary directs PNC to vote proxies for Fund
shares in accordance with the recommendations made by the Funds' Boards of
Trustees. Such direction may result in PNC voting to approve contracts between
it or its affiliate(s) or to approve fees to be paid to it or its affiliate(s)
by the Funds. The undersigned independent fiduciary acknowledges that voting of
proxies for the Funds' shares shall remain the responsibility of the
independent fiduciary.
10/20/97 Analog Devices Deferred Compensation Plan
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Date Name of Plan
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Fiduciary's Name (Printed) Signature