EXHIBIT 10.A
ALPHA INDUSTRIES, INC.
1986 LONG-TERM INCENTIVE PLAN
SECTION I. PURPOSE OF THE PLAN
The purpose of this Alpha Industries, Inc. 1986 Long-Term Incentive Plan
(the "Plan") are (i) to provide long-term incentives and rewards to those key
employees (the "Participants") of Alpha Industries, Inc. (the "Company") and its
subsidiaries, who are in a position to contribute to the long-term success and
growth of the Company and its subsidiaries, (ii) to assist the Company in
retaining and attracting key employees with requisite experience and ability,
and (iii) to associate more closely the interests of such persons with those of
the Company's stockholders.
SECTION II. ADMINISTRATION
(a) The Committee. The Plan shall be administered by the Compensation
Committee of the Company's Board of Directors (the "Committee"). No member of
the Committee while a member thereof shall be eligible to participate in the
Plan, nor may any person be appointed to the Committee unless he was not
eligible to participate in the Plan or any other plan of the Company at any time
within the one-year period immediately prior to such appointment as provided in
Rule 16b-3 promulgated under the securities Exchange Act of 1934, as amended
(the "Exchange Act").
(b) Authority and Discretion of Committee. Subject to the express
provisions of the Plan and provided that all actions taken shall be consistent
with the purposes of the Plan, the Committee shall have full and complete
authority and the sole discretion to: (i) determine those key employees of the
Company and its subsidiaries who shall constitute the Participants; (ii) select
the Participants to whom awards shall be granted under the Plan; (iii) determine
the size and the form of the award or awards, if any, to be granted to any
Participant; (iv) determine the time or times such awards shall be granted; (v)
establish the terms and conditions upon which such awards may be exercised
and/or transferred; (vi) alter any restrictions and conditions upon such awards;
and (vii) adopt such rules and regulations, establish, define and/or interpret
any other terms and conditions and make all other determinations (which may be
on a case-by-case basis) deemed necessary or desirable for the administration of
the Plan.
SECTION III. AWARDS
Awards under the Plan may include any or all of the following, as
described herein: (a) Stock Options, with or without (b) Stock Appreciation
Rights; (c) Book Value Awards; or (d) Restricted Share Awards.
(a) Stock Options. "Stock Options" are rights to purchase shares of $.25
par value common stock of the Company ("Common Stock") at a fixed price for a
predetermined period of time.
(i) The Committee may grant Stock Options either alone or in
conjunction with Stock Appreciation Rights as described in paragraph (b)
below. It shall determine the number of shares of Common Stock to be
covered by each such Stock Option.
(ii) In the event of the death, retirement or permanent disability
of the recipient of a Stock Option, the recipient or the recipient's
estate shall have the right, until the earlier of (a) one year subsequent
to such death, retirement or permanent disability, or (b) the expiration
date of the Stock Option, to exercise the Stock Option to the extent such
Stock Option was exercisable on the date of death, retirement or permanent
disability.
(iii) If the employment of the recipient of a Stock Option is
terminated for any reason other than death, retirement or permanent
disability, the recipient shall have the right, until the earlier of (a)
90 days after such termination or (b) the expiration date of the Stock
Option, to exercise the Stock Option, to the extent such option was
exercisable on the date of termination.
(iv) The purchase price of shares purchased pursuant to any Stock
Option shall be determined by the Committee, and shall be paid in full
upon exercise, either (a) in cash, (b) by delivery of shares of Common
Stock (valued at their Fair Market Value on the date of purchase, as
defined in Section V) or (c) a combination of cash and Common Stock.
(v) The Committee, in its discretion, may provide that any Stock
Option shall become immediately and fully exercisable in the event of a
change in control of the Company, notwithstanding any installment schedule
for the exercise of such Stock Option.
(b) Stock Appreciation Rights. "Stock Appreciation Rights" are rights to
receive cash and/or Common Stock in lieu of the purchase of shares under a
related Stock Option. The Committee may grant Stock Appreciation Rights to any
recipient of a Stock Option either at the time of the grant of the Stock Option
or subsequently, by amendment to such grant. All Stock Appreciation Rights shall
be granted under and subject to the following terms and conditions, and any
other terms and conditions as the Committee may establish:
(i) Each Stock Appreciation Right shall be exercisable at the same
times and with regard to the same number of shares as the related Stock
Option is exercisable, except that in addition, in no event shall any
Stock Appreciation Right be exercisable prior to six months and one day
from the date of its grant.
(ii) Each Stock Appreciation Right shall entitle the holder thereof
to surrender to the Company a portion of or all of the unexercised, but
exercisable, related Stock Option, and to receive with respect to each
share of Common Stock represented by such surrendered portion, cash or
shares of Common Stock of a value equal to the amount by which the Fair
Market Value of each such share on the date of exercise exceeds the option
price provided in the related Stock Option. The recipient shall not be
required to pay the Stock Option exercise price upon surrender of the
Stock Option and exercise of the related Stock Appreciation Right.
(iii) Each surrender of a portion of or all of a Stock Option upon
the exercise of a Stock Appreciation Right shall cause a share for share
reduction in the number of shares of Common Stock covered by the related
Stock Option.
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(iv) Notwithstanding any other provision of the Plan, the Committee
may from time to time determine, subject to Board approval, the maximum
amount of cash or Common Stock which may be paid or issued upon exercise
of Stock Appreciation Rights (A) in any year and/ or (B) to any particular
recipient. Any limitation on payments may be changed by the Committee from
time to time, provided that no such change shall require the holder to
return to the Company any amount theretofore received upon the exercise of
Stock Appreciation Rights.
(c) Book Value Awards. "Book Value Awards" are grants of Book Value Shares
(as defined below) or options to purchase Book Value Shares, with the option
price per share equal to the Book Value of Common Stock.
(i) "Book Value" shall mean the common stockholders' equity per
share as reported in the Company's financial statements contained in
either (A) the immediately preceding annual report to stockholders, or (B)
the immediately preceeding quarterly report to the stockholders, as the
Committee may determine in its discretion.
(ii) "Book Value Shares" are shares of Common Stock subject to the
following restrictions:
(A) Book Value Shares may not be sold, transferred or
otherwise disposed of, pledged or otherwise encumbered, except as
provided in (I) paragraph (c)(ii)(B) below, (II) paragraph
(c)(iii), below, or (III) paragraph (g) of Section V.
(B) Book Value Shares which have not been reacquired by the
Company pursuant to paragraph (c)(iii) below shall be repurchased by
the Company at either (I) the time of the recipient's death,
retirement or permanent disability, at the then Book Value of such
shares, or (II) at the time of the recipient's termination of
employment for any other reason, at the recipient's original
acquisition price.
(C) In the event the recipient of an option to purchase Book
Value Shares is terminated for any reason, any outstanding option to
purchase Book Value Shares shall be exercisable by the recipient or
his estate only under the conditions of paragraph (a)(iii) of this
Section III.
(iii) The Committee may, in its discretion, provide terms pursuant
to which a recipient of Book Value Shares may sell all or a portion of
such shares to the Company prior to the time of such recipient's death,
retirement, permanent disability or other termination of employment.
(iv) Payment for Book Value Shares repurchased hereunder shall be
made in cash, and/ or at the discretion of the Committee, in shares of
Common Stock valued at their Fair Market Value at the date of repurchase.
Such payment may be made either in a lump sum or in installments at the
discretion of the Committee.
(v) At the discretion of the Committee, Book Value Awards may permit
the recipient to elect to receive, instead of Book Value Shares, a number
of shares of Common Stock equal to the number of Book Value Shares awarded
times the ratio of Book Value to Fair Market Value of the Common Stock on
the date of the Book Value Award.
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(d) Restricted Share Awards. "Restricted Share Awards" are grants of
Restricted Shares or options to purchase Restricted Shares. Restricted
Shares may be issued for any lawful consideration and on such terms as may
be determined by the Committee.
(i) "Restricted Shares" are shares of Common Stock acquired by
a Participant subject to the restrictions described in the following
subsections.
(ii) Restricted Shares may not be sold, transferred or
otherwise disposed of, pledged or otherwise encumbered, except (I)
if they become Free Shares (as defined below), (II) if the Company
declines to repurchase such shares, as provided in this paragraph,
or (III) as provided in paragraph (g) of Section V. In the event of
the recipient's termination of employment for any reason except
death, retirement or permanent disability, Restricted Shares which
have not become Free Shares shall be delivered to the Company within
30 days following such termination. Within 60 days following a
timely delivery of said shares, the Company may repurchase all or a
portion of said shares by paying to the recipient the original
acquisition price, if any, for the number of shares that the Company
elects to purchase, and the Company will return to the recipient any
shares not so purchased. The restrictions against disposition and
the obligation of resale to the Company shall lapse as to any shares
which the Company declines to purchase. Any of such shares which are
not delivered to the Company within 30 days following the
termination of employment shall be deemed void for all corporate
purposes, and shall remain subject to the restrictions imposed
thereon which restrictions shall not lapse as otherwise provided.
Nothing in this Section shall require the Company to repurchase
shares issued to Participants under the Plan.
(iii) Upon the occurrence of the earlier of the death,
retirement or permanent disability of the recipient of a Restricted
Share Award, the restrictions against disposition and the obligation
of resale to the Company of shares as to which such restrictions and
obligations have not otherwise lapsed shall immediately lapse.
(iv) In addition to the terms provided in paragraph (d)(iii)
above, the Committee may, in its discretion, provide alternate terms
pursuant to which Restricted Shares issued to a Participant shall
become Free Shares. Such terms shall be incorporated into the terms
of the Restricted Share Award at the time of the granting of the
award, and shall also be made a part of an agreement between the
Company and the recipient at the time of the transfer of the
Restricted Shares.
(v) "Free Shares" shall mean Restricted Shares as to which the
restrictions against disposition and the obligation of resale to the
Company have lapsed in accordance with the provisions set forth in
paragraphs (d)(ii), (iii) or (iv) of this Section.
SECTION IV. FURTHER REQUIREMENTS AS TO BOOK VALUE SHARES AND RESTRICTED SHARES
(a) Certificates. Certificates issued in respect of Book Value Shares or
Restricted Shares sold or awarded under the Plan shall be registered in the name
of the recipient but shall bear the following legend:
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"The transferability of this certificate and the shares of stock
represented hereby is restricted and the ares are subject to the further terms
and conditions contained in the 1986 Long-Term Incentive Plan of Alpha
Industries, Inc. and in a repurchase agreement executed pursuant thereto. Copies
of said plan and agreement are on file in the office of the Treasurer of the
Company at the Company's offices in Woburn, Massachusetts."
(b) Escrow Agreements. In order to enforce the restrictions, terms and
conditions on Book Value Shares or Restricted Shares, each recipient thereof
shall, immediately upon receipt of a certificate or certificates representing
such shares, deposit such certificates together with stock powers and other
instructions of transfer as the Committee may require, appropriately endorsed in
blank, with the Company as Escrow Agent under an escrow agreement in such form
as shall be determined by the Committee.
SECTION V. MISCELLANEOUS PROVISIONS
(a) Rights of Recipients of Awards. The holder of Stock Appreciation
Rights or any option granted under the Plan shall have no rights as a
stockholder of the Company with respect thereto unless and until certificates
for shares are issued. Except as otherwise provided herein, the holder of
Restricted Shares or Book Value Shares will be entitled to receive any dividends
on such shares in the same amount and at the same time as declared on shares of
Common Stock of the Company and shall be entitled to vote such shares as a
stockholder of record.
(b) Assignment of Options and Stock Appreciation Rights. No option or
Stock Appreciation Right [ILLEGIBLE] rights or interest of the recipient therein
shall be assignable or transferable by such recipient except by will or the laws
of descent and distribution. During the lifetime of the recipient, such option
or Stock Appreciation Right shall be exercisable only by, or payable only to,
the recipient thereof.
(c) Terms and Price of Options. Options to purchase Common Stock, Book
Value Shares or Restricted Shares hereunder shall be for a period established
by the Committee, but in no event may such options be exercisable (including
provisions, if any, for exercise in installments) more than ten years after the
date of its grant. Furthermore, options hereunder shall be of three types: (i)
those exercisable only within sixty (60) days of grant, (ii) those exercisable
not earlier than one year after grant subject to the right of the Committee as
set forth in paragraph (a)(v) of Section III to provide terms pursuant to which
Stock Options shall become immediately exercisable in full upon a change in
control of the Company and (iii) those exercisable at any time after grant or at
a specified time after grant if granted in exchange for an option or options of
the same type for the same number of shares and such new option or options are
exercisable at dates no earlier than the exercise date of the options for which
they are exchanged. No option to purchase shares shall be granted at a price per
share that is less than Book Value, as defined in paragraph (c)(i) of Section
III.
(d) Further Agreements. All Stock Options, Stock Appreciation Rights,
Restricted Stock Awards and Book Value Awards granted under this Plan shall be
evidenced by agreements in such form and containing such terms and conditions
(not inconsistent with this Plan) as the Committee may require.
(e) Legal and Other Requirements. No shares of Common Stock shall be
issued or transferred upon exercise of any award under the Plan unless and until
all legal requirements applicable to the issuance or transfer of such shares and
such other requirements as are consistent with the Plan have
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been complied with to the satisfaction of the Committee. The Committee may
require that prior to the [ILLEGIBLE] or transfer of Common Stock hereunder, the
recipient thereof shall enter into a written agreement to comply with any
restrictions on subsequent disposition that the Committee or the Company deem
necessary or advisable under any applicable law, regulation or official
interpretation thereof. Certificates of stock issued hereunder may be legended
to reflect such restrictions.
(f) Withholding of Taxes. Pursuant to applicable Federal, state, local or
foreign laws, the Company may be required to collect income or other taxes upon
the grant of certain awards or the exercise of an option or Stock Appreciation
Right by a Participant. The Company may deduct from payments made under the
Plan, or require, as a condition to such award, or to the exercise of an option
or Stock Appreciation Right, that the recipient pay the Company, at such time as
the Committee or the Company determine, the amount of any taxes which the
Committee or the Company, in its discretion, determine is required to be
withheld.
(g) Pledge of Shares. Notwithstanding restrictions against disposition of
any award made pursuant to the Plan, the Committee, in its discretion, may
permit any shares acquired under the plan to be pledged or otherwise encumbered
to secure borrowing by the recipient thereof solely for the purpose of obtaining
the acquisition price to be paid for such shares, provided, that the amount of
such borrowing may not exceed the acquisition price of such shares, and the
recipient must provide the Company with a copy of the documents executed in
connection with such borrowing. Any borrowing made by the recipient of an award
pursuant to this paragraph (g) must permit the Company to repay the outstanding
indebtedness and reacquire the pledged shares in the event of a default by the
recipient under the borrowing documents. Nothing in this paragraph (g) shall
require the Company to repay any indebtedness of a Participant or reacquire
shares pledged hereunder.
(h) Right to Awards. No employee of the Company or other person shall have
any claim or right to be a Participant in this Plan or to be granted an award
hereunder. Neither this Plan nor any action taken hereunder shall be construed
as giving any Participant any right to be retained in the employ of the Company.
Nothing contained hereunder shall be construed as giving any Participant or any
other person any equity or interest of any kind in any assets of the Company or
creating a trust of any kind or a fiduciary relationship of any kind between the
Company and any such person. As to any claim for any unpaid amounts under the
Plan, any Participant or any other person having a claim for payments shall be
an unsecured creditor.
(i) Installments. Any option granted hereunder may provide for its
exercise in installments. The right to exercise any option having installment
provisions shall be cumulative, so that to the extent that any portion of an
installment is not exercised when exercisable, that portion of the installment
shall continue to be exercisable at any time thereafter until the expiration of
the term of such option.
j) Fair Market Value. The "Fair Market Value" of Common Stock shall be the
closing price of the Company's Common Stock on the American Stock Exchange on
the date for which Fair Market Value is to be determined, or if this method
results in an unreasonable calculation of the fair market value of the Common
Stock, then as the Committee may determine.
(k) Permanent Disability. "Permanent Disability" shall have the meaning
specified in Section 22(e)(3) of the Internal Revenue Code of 1986 (the "Code").
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(1) Retirement. "Retirement" shall mean an employee's ceasing to be
employed by the Company after such employee has reached 65 years of age, or in
the discretion of the Committee, and on a case-by-case basis, such other age, as
the Committee determines in its discretion, such age being not less than 55
years of age.
(m) Change in Control. A "Change in Control" shall mean:
(i) there shall have been consummated (a) any consolidation or
merger of the Company in which the Company is not the continuing or
surviving entity or pursuant to which the Company's Common Stock is
converted into cash, securities or other property, other than a merger of
the Company in which the ownership by the Company's stockholders of the
securities in the surviving entity is in the same proportion as the
ownership by the Company's stockholders of the stock in the Company
immediately prior to the merger or (b) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of the Company; or
(ii) the stockholders of the Company have approved any plan or
proposal for the liquidation or dissolution of the Company; or
(iii) any person (as that term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) has become the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or
more of the Company's outstanding Common Stock; or
(iv) that during any period of two consecutive years, individuals
who, at the beginning of such period, constitute the entire Board of
Directors shall cease, for any reason, to constitute a majority thereof,
unless the election, or the nomination for election by the Company's
stockholders, of each new director was approved by a vote of at least
three-quarters of the directors then still in office who were directors at
the beginning of the period.
(n) Indemnity. Neither the Board of Directors nor the Committee, nor any
members of either, nor any employees of the Company or any subsidiary, shall be
liable for any act, omission, interpretation, construction or determination made
in good faith in connection with their responsibilities with respect to the
Plan, and the Company hereby agrees to indemnify the members of the Board of
Directors, the members of the Committee, and the employees of the Company and
its subsidiaries with respect to any claim, loss, damage, or expense (including
counsel fees) arising from any such act, omission, interpretation, construction
or determination to the full extent permitted by law.
(o) Incentive Stock Options. The aggregate fair market value (determined
as of the time any incentive stock option, as that term is defined in Section
422A of the Code, is granted) of the Common Stock with respect to which
incentive stock options are exercisable for the first time by any employee
during any calendar year under all plans of the Company and its parent and
subsidiary corporation (as such terms are defined in Section 425 of the Code)
shall not exceed $100,000.
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SECTION VI. AMENDMENT AND TERMINATION; ADJUSTMENTS UPON CHANGES IN STOCK
The Board of Directors of the Company may at any time, and from time to
time, amend, suspend or terminate the Plan in whole or in part; provided,
however, that the Board of Directors may not materially increase the benefits
accruing to Participants under the Plan, increase the number of shares of Common
Stock reserved for purposes of the Plan, or materially modify the requirements
as to eligibility for participation in the Plan without further approval by the
affirmative vote of at least a majority of the holders of the outstanding shares
of Common Stock. Except as provided herein, no amendment, suspension or
termination of the Plan may affect the rights of a Participant to whom an award
has been granted without such Participant's consent. If there shall be any
change in the stock subject to the Plan or to any option, Stock Appreciation
Right, Book Value Award or Restricted Share Award granted under the Plan,
through merger, consolidation, reorganization, recapitalization, stock dividend,
stock split or other change in the corporate structure, appropriate adjustments
may be made by the Board of Directors of the Company (or if the Company is not
the surviving corporation in any such transaction, the board of directors of the
surviving corporation) in the aggregate number and kind of shares subject to the
Plan, and the number and kind of shares and the price per share subject to
outstanding options, Stock Appreciation Rights, Book Value Awards or Restricted
Share Awards.
SECTION VII. SHARES OF STOCK SUBJECT TO THE PLAN
The number of shares of Common Stock, Book Value Shares or Restricted
Shares that may be the subject of awards under the Plan shall not exceed an
aggregate of 900,000 shares. Shares to be delivered under the Plan may be either
authorized but unissued shares of Common Stock or treasury shares. Any shares
subject to an option hereunder which for any reason expires unexercised, shares
reacquired by the Company because restrictions do not lapse, shares returned
because payment is made hereunder in stock of equivalent value rather than cash,
or Book Value Shares returned to the Company for repurchase shall, at such time,
no longer count towards the aggregate number of shares which may be subject to
awards hereunder, but shares subject to a Stock Option which are not delivered
as a result of the exercise of related Stock Appreciation Rights shall continue
to count towards the aggregate number of shares which may be so subject.
SECTION VIII. EFFECTIVE DATE AND TERM OF THE PLAN
The effective date of the Plan is December 18, 1986 and awards under the
Plan may be made for a period of ten years commencing on such date. The period
during which an option or other award may be exercised may extend beyond that
time as provided herein.
SECTION IX. APPROVAL OF STOCKHOLDERS
The Plan is subject to the approval of the holders of a majority of the
shares of Common Stock of the Company present and voting (in person or by proxy)
at a meeting of stockholders within one year from the effective date of the
Plan. Awards may be made hereunder prior to the date of, but subject to,
[ILLEGIBLE] approval.
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