EXHIBIT 10.D
ALPHA INDUSTRIES EXECUTIVE COMPENSATION PLAN
ARTICLE 1. - INTRODUCTION
1.1. PURPOSE OF PLAN
The Employer has adopted the Plan set forth herein to provide a means by which
certain employees may elect to defer receipt of designated percentages or
amounts of their Compensation and to provide a means for certain other deferrals
of compensation.
1.2. STATUS OF PLAN
The Plan is intended to be "a plan which is unfunded and is maintained by an
employer primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees" within the meaning
of Sections 201(2) and 301(a)(3) of the Employee Retirement Income Security Act
of 1974 ("ERISA"). To the extent possible, it shall be interpreted and
administered in a manner consistent with that intent.
ARTICLE 2. - DEFINITIONS
Wherever used herein, the following terms have the meanings set forth below,
unless a different meaning is clearly required by the context:
2.1. ACCOUNT means, for each Participant, the account established for his or her
benefit under Section 5.1.
2.2. ADDITIONAL EMPLOYER CONTRIBUTION means a discretionary contribution made by
The Employer, as described in Section 4.2.
2.3. CHANGE OF CONTROL means (a) the purchase or other acquisition in one or
more transactions other than from the Employer, by any individual, entity or
group of persons, within the meaning of section 13(d)(3) or 14(d) of the
Securities Exchange Act of 1934 or any comparable successor provisions, of
beneficial ownership (within the meaning of Rule 13d-3 of Securities Exchange
Act of 1934) of 30 percent or more of either the outstanding shares of common
stock or the combined voting power of the Employer's then outstanding voting
securities entitled to vote generally, or (b) the approval by the stockholders
of the employer of a reorganization, merger, or consolidation, in each case,
with respect to which persons who were stockholders of the Employer immediately
prior to such reorganization, merger or consolidation do not immediately
thereafter own more than 50 percent of the combined voting power of the
reorganized, merged or consolidated Employer's then outstanding securities that
are entitled to vote generally in the election of directors or (c) the sale of
substantially all of the Employer's assets.
2.4. CODE means the Internal Revenue Code of 1986, as amended from time to time.
Reference to any section or subsection of the Code includes reference to any
comparable or succeeding provisions of any legislation which amends, supplements
or replaces such section or subsection.
2.5. COMPENSATION with regard to Participant means his or her wages, salaries,
fees for professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer or an Affiliate to the
extent that the amounts are includable in gross income, including,
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but not limited to, commissions paid to salesmen, compensation for services on
the basis of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, reimbursements, and expense allowances, but only to
the extent that such amounts are included in income, and not including those
items excludable from the definition of compensation under Treas. Reg., Section
1.415-2(d)(3), or any successor or replacement provision.
2.6. COMPENSATION COMMITTEE means the Board of Directors or such person or
persons as may be designated by the Board of Directors to serve as the
Compensation Committee hereunder.
2.7. EFFECTIVE DATE means January 1, 1995.
2.8. ELECTION FORM means the participation election form as approved and
prescribed by the Plan Administrator.
2.9. ELECTIVE DEFERRAL means the portion of Compensation which is deferred by a
Participant under Section 4.1.
2.10. ELIGIBLE EMPLOYEE means, on the Effective Date or on any Entry Date
thereafter, each key employee of the Employer selected by the Compensation
Committee.
2.11. EMPLOYER means Alpha Industries, Inc., located at 20 Sylvan Rd., Woburn,
MA 01801, any successor to all or a major portion of the Employer's assets or
business which assumes the obligations of the Employer, and each other entity
that is affiliated with the Employer which adopts the Plan with the consent of
the Employer.
2.12. ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to any section or subsection of ERISA
includes reference to any comparable or succeeding provisions of any legislation
which amends, supplements or replaces such section or subsection.
2.13. INSOLVENT means either (i) the Employer is unable to pay its debts as they
become due, or (ii) the Employer is subject to a pending proceeding as a debtor
under the United States Bankruptcy Code.
2.14. PARTICIPANT means any individual who participates in the Plan in
accordance with Article 3.
2.15. PLAN means this Plan as it may be amended from time to time.
2.16. PLAN ADMINISTRATOR means the Employer, or such person as the Employer
designates, from time to time, in a writing attached to this Plan.
2.17. PLAN YEAR means the calendar year.
2.18. RETIREMENT AGE means 55 years of age.
2.19. TOTAL AND PERMANENT DISABILITY means the inability of a Participant to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months, and the permanence and degree of which shall be
supported by medical evidence satisfactory to the Plan Administrator.
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2.20. TRUST means the trust established by the Employer that identifies the Plan
as a plan with respect to which assets are to be held by the Trustee.
2.21. TRUST AGREEMENT means the agreement between the Employer and the Trustee
establishing the Trust.
2.22. TRUSTEE means the trustee or trustees under the Trust.
2.23. YEAR OF SERVICE means a computation period and service requirement that
may be established by the Employer with notice to the Participants.
ARTICLE 3. - PARTICIPATION
3.1. COMMENCEMENT OF PARTICIPATION
Any individual who elects to defer part of his or her compensation in accordance
with Section 4.1 shall become a Participant in the Plan as of the date such
deferrals commence in accordance with Section 4.1.
Any individual who is not already a Participant and whose Account is credited
with an Additional Employer Contribution shall become a Participant as of the
date such amount is credited.
3.2. CONTINUED PARTICIPATION
A Participant in the Plan shall continue to be a Participant so long as any
amount remains credited to his or her Account.
ARTICLE 4. - ELECTIVE AND ADDITIONAL EMPLOYER CONTRIBUTIONS
4.1. ELECTIVE DEFERRALS
An individual who is an Eligible Employee on the Effective Date may, by
completing an Election Form and filing it with the Plan Administrator within 30
days following the Effective Date, elect to defer a percentage or dollar amount
of one or more payments of Compensation, on such terms as the Plan Administrator
pay permit, which are payable to the Participant after the date on which the
individual files the Election Form. Any individual who becomes an Eligible
Employee after the Effective Date may, be completing an Election Form and filing
it with the Plan Administrator within 30 days following the date on which the
Plan Administrator gives such individual written notice that the individual is
an Eligible Employee, elect to defer a percentage or dollar amount of one or
more payments of Compensation, on such terms as the Plan Administrator may
permit, which are payable to the Participant after the date on which the
individual files the Election Form. Any eligible Employee who has not otherwise
initially elected to defer compensation in accordance with this paragraph 4.1
may elect to defer a percentage or dollar amount of one or more payments of
Compensation, on such terms as the Plan Administrator may permit, commencing
with compensation paid in the next succeeding Plan Year, by completing an
Election Form prior to the first day of such succeeding Plan Year. In addition,
a Participant may defer all or part of the amount of any elective deferral or
matching contribution made on his or her behalf to the Employer's 401(i) plan
for the prior Plan Year but treated as an excess deferral, an excess
contribution or otherwise limited by the application of the limitations of
sections 401(k), 401(m), 415 or 402(q) of the code, so long as the Participant
so indicates on an Election Form. A Participant's Compensation shall be reduced
in accordance with the Participant's election hereunder and amounts deferred
hereunder shall be paid by the
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employer to the trust as soon as administratively feasible and credited to the
Participant's Account as of the date the amounts are received by the Trustee.
An election to defer a percentage or dollar amount of Compensation for any Plan
Year shall apply for subsequent Plan Years unless changed or revoked. A
Participant may change or revoke his or her deferral election as of the first
day of any Plan Year by giving written notice to the Plan Administrator before
such first day (or any such earlier date as the Plan Administrator may
prescribe).
4.2. ADDITIONAL EMPLOYER CONTRIBUTIONS
The Employer may, in its sole discretion, make Additional Employer Contributions
to the account of Eligible Employees on such terms as the Employer shall specify
at the time it makes the contribution. To the extent that they conflict with the
provisions of this Plan, the terms specified by the Employer shall supersede any
other provision of this Plan with regard to such Additional Employer
Contributions, and earnings or losses with respect thereto. If the Employer does
not specify a method of distribution, the Additional Employer Contribution shall
be distributed in a manner consistent with the election last made by the
particular Participant prior to the year in which the Additional Employer
Contribution is made. The Employer, in its discretion, may permit the
Participant to designate a distribution schedule for a particular Additional
Employer Contribution provided that such designation is made prior to the time
that the Employer finally determines that the Participant will receive the
Additional Employer Contribution.
ARTICLE 5. - ACCOUNTS
5.1. ACCOUNTS
The Plan Administrator shall establish an Account for each participant
reflecting Elective Deferrals, and Additional Employer Contributions, if any,
made for the Participant's benefit together with any adjustments for income,
gain or loss and any payments from the Account. In its discretion, the Plan
Administrator may solicit recommended investments from each Participant and may
maintain records of the income, gain or loss attributable to the Participant's
account in accordance with the performance of such recommended investments or
such other investments as the Plan Administrator may select. In its discretion,
the Plan Administrator may cause the Trustee to maintain and invest separate
asset accounts corresponding to each Participant's Account. The Plan
Administrator shall establish sub-accounts for each Participant that has more
than one election in effect under Section 7 and such other subaccounts as are
necessary for the proper administration of the Plan. As of the last business day
of each calendar quarter, the Plan Administrator shall provide the Participant
with a statement of his or her Account reflecting the income, gains and losses
(realized and unrealized), amounts of deferrals, and distributions of such
Account since the prior statement.
5.2. INVESTMENTS
So long as the Employer is not insolvent, and subject to the provisions of the
Trust Agreement, the assets of the Trust shall be invested in such investments
as the Company shall determine. In the Company's discretion, it may designate
one or more agents in writing to the Trustee, which agents may be designated
with respect to all or a portion of the assets held by the Trustee for the
purpose of making such investments.
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ARTICLE 6. - VESTING
Subject to the provisions of Section 10.1, a Participant shall have a vested
right to all Elective Deferrals and all income and gain attributable thereto,
reduced by losses, if any, as are credited to his or her Account. If the
Employer chooses to make Additional Employer Contributions, then each
Participant's right to the portion of his or her Account attributable to
Additional Employer Contributions and income and gain attributable thereto,
reduced by losses, if any, shall be in accordance with terms determined by the
Employer and provided to the Participant.
ARTICLE 7. - PAYMENTS
7.1. ELECTION AS TO TIME AND FORM OF PAYMENT
A Participant shall elect (on the election Form used to elect to defer
Compensation under Section 4.1) the date at which the Elective Deferrals and
vested Additional Employer Contributions, if any, including any earnings
attributable thereto, reduced by losses, if any, will be paid to the
Participant. The Participant shall also elect thereon for payment to be paid in
either:
a. a single lump-sum payment; or
b. annual installments over a period elected by the Participant up to
10 years, the amount of each annual installment to equal the then
balance of all of the Participant's Account attributable to Elective
Deferrals and any earnings attributable thereto, reduced by losses,
if any, and the vested portion of any Additional Employer
Contributions and earnings attributable thereto, reduced by losses,
if any, as determined immediately prior to the payment of the
installment, and divided by the number of installments then
remaining to be paid.
Each such election will be effective for the Plan Year for which it is made and
succeeding Plan Years, unless changed by the Participant. Except as explicitly
provided herein, any change will be effective only for Elective Deferrals and
Additional Employer Contributions made for the first Plan Year beginning after
the date on which the Election Form containing the change is filed with the Plan
Administrator. Notwithstanding the preceding sentence, the payments due in any
calendar year pursuant to this Section 7.1 shall be paid in the first full
calendar month immediately following the actual date that the Participant ceases
being an employee of the Employer, or the twelve month period commencing in that
month, rather than the month or year originally selected, if the Participant
makes an election in such form as the Plan Administrator may require, and the
election is filed with the Plan Administrator prior to the calendar year in
which the payment otherwise would have been made. Except as provided in Sections
7.2, 7.3, 7.4 or 7.5, or any schedule provided by the Employer to the
Participant for Additional Employer Contributions and income or gain
attributable thereto, reduced by losses, if any, payment of a Participant's
Account shall be made in accordance with the Participant's elections as provided
in this Section 7.1.
7.2. CHANGE OF CONTROL
Unless (i) the Board of Directors of the Employer shall vote to continue this
Plan on substantially the same terms not later than 60 days after a Change in
Control and send notice of such vote to each Participant, then (ii) as soon as
possible following a Change of Control of Employer, each Participant shall be
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paid all of the Participant's Account attributable to Elective Deferrals and any
earnings attributable thereto, reduced by losses, if any, and all of any
Additional Employer Contributions and earnings attributable thereto, reduced by
losses, if any, (whether or not considered vested for any other purpose
hereunder) in a single lump sum.
7.3. TERMINATION OF EMPLOYMENT; TOTAL AND PERMANENT
DISABILITY
Except as provided in Section 7.2, upon termination of a Participant's
employment prior to the Retirement Age, for any reason other than death or
Permanent and Total Disability, all of the Participant's Account attributable to
Elective Deferrals and any earnings attributable thereto, reduced by losses, if
any, and the vested portion of any Additional Employer Contributions and
earnings attributable thereto, reduced by losses, if any, shall be paid to the
Participant in a single lump sum as soon as practicable following the date of
such termination. If a Participant suffers permanent and total disability,
whether or not employed by the Employer at that time, the Plan Administrator, in
its sole discretion, may pay out all of the Participant's Account attributable
to Elective Deferrals and any earnings attributable thereto, reduced by losses,
if any, and the vested portion of any Additional Employer Contributions and
earnings attributable thereto, reduced by losses, if any, in a lump sum, or in
annual installments, regardless of any election made by the Participant and
regardless of whether payments have already commenced under Section 7.1.
7.4. DEATH
If a Participant dies prior to the complete distribution of his or her Account,
all of the Participant's Account attributable to Elective Deferrals and any
earnings attributable thereto, reduced by losses, if any, and the vested portion
of any Additional Employer Contributions and earnings attributable thereto,
reduced by losses, if any, shall be paid as soon as practicable to the
Participant's designated beneficiary or beneficiaries, in the form elected by
the Participant under either of the following options:
a. a single lump-sum payment; or
b. annual installments over a period elected by the Participant up to
10 years, the amount of each annual installment to equal the then
balance of all of the Participant's Account attributable to Elective
Deferrals and any earnings attributable thereto, reduced by losses
if any, and the vested portion of any Additional Employer
Contributions and earnings attributable thereto, reduced by losses,
if any, as determined immediately prior to the payment of the
installment, and divided by the number of installments then
remaining to be paid.
Any designation of beneficiary and form of payment to such beneficiary shall be
made by the Participant on an Election form filed with the Plan Administrator
and may be changed by the participant at any time by filing another Election
Form containing the revised instructions. If no beneficiary is designated or no
designated beneficiary survives the Participant, payment shall be made to the
Participant's surviving spouse, or, if none, to his or her issue per stripes, in
a single payment. If no spouse or issue survives the Participant, payment shall
be made in a single lump sum to the Participant's estate.
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7.5. UNFORESEEN EMERGENCY
If a Participant suffers an unforeseen emergency, as defined herein, the Plan
Administrator, in its sole discretion, may pay to the Participant up to and
including the total of that portion, if any, of all of the Participant's Account
attributable to Elective Deferrals and any earnings attributable thereto,
reduced by losses, if any, and the vested portion of any Additional Employer
Contributions and earnings attributable thereto, reduced by losses, if any. The
determination of the amount to be paid shall equal that amount which the Plan
Administrator determines, in its sole discretion, is necessary to satisfy the
emergency need, including any amounts necessary to pay any federal, state or
local income taxes reasonably anticipated to result from the distribution. A
Participant requesting an emergency payment shall apply for the payment in
writing in a form approved by the Plan Administrator and shall provide such
additional information as the Plan
Administrator may require. For purposes of this paragraph, "unforeseen
emergency" means an immediate and heavy financial need resulting from any of the
following:
a. expenses which are not covered by insurance and which the
Participant or his or her spouse or dependent has incurred as a
result of, or is required to incur in order to receive, medical
care;
b. the need to prevent eviction of a Participant from his or her
principal residence or foreclosure on the mortgage of the
Participant's principal residence; or
c. any other circumstance that is determined by the Plan Administrator
in its sole discretion to constitute an unforeseen emergency which
is not covered by insurance and which cannot reasonably be relieved
by the liquidation of the Participant's assets.
7.6. FORFEITURE OF NON-VESTED AMOUNTS
Any amounts credited to a Participant's Account which are attributable to the
non-vested portion of any Additional Employer Contributions, and earnings
attributable thereto, reduced by losses, if any, not vested at the time payments
are commenced pursuant to Sections 7.1, 7.3 or 7.4, shall be forfeited by the
Participant at the time payment begins under such Sections, and may be applied
by the Company as it sees fit, which may include satisfying the Employer's
obligation to make contributions to the Trust.
7.7. TAXES
The Plan Administrator shall withhold or otherwise appropriately provide for all
federal, state or local taxes that the Plan Administrator determines are
required to be withheld or otherwise provided for from any payments made
pursuant to this Article 7.
ARTICLE 8. - PLAN ADMINISTRATOR
8.1. PLAN ADMINISTRATION AND INTERPRETATION
The Plan Administrator shall oversee the administration of the Plan. The Plan
Administrator shall have complete control and authority to determine the rights
and benefits of any and all Participants. Any determinations may be made on a
case-by-case basis or a plan wide basis, as determined by the Plan Administrator
in its sole discretion, including all claims, demands and actions arising out of
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the provisions of the Plan of any Participant, beneficiary, deceased
Participant, or other person having or claiming to have any interest under the
Plan. The Plan Administrator shall have complete discretion to interpret the
Plan and to decide all matters under the Plan. Such interpretation and decision
shall be final, conclusive and binding on all Participants and any person
claiming under or through any Participant. Any individual who is a Participant
and who is serving as Plan Administrator or part of a committee comprising the
Plan Administrator will not vote or act on any matter relating solely to himself
or herself. When making a determination or calculation, the Plan Administrator
shall be entitled to rely on information furnished by a Participant, a
beneficiary, the employer or the Trustee, or such other persons, as it sees fit.
The Plan Administrator shall have the responsibility for complying with any
reporting and disclosure requirements of ERISA.
8.2. POWERS, DUTIES, PROCEDURES, ETC.
The Plan Administrator shall have such powers and duties, may adopt such rules
and tables, may act in accordance with such procedures, may appoint such
officers or agents, may delegate such powers and duties, may receive such
reimbursements and compensation, and shall follow such claims and appeal
procedures with respect to the Plan as it may establish.
8.3. INDEMNIFICATION OF PLAN ADMINISTRATOR
The Employer agrees to indemnify and to defend to the fullest extent permitted
by law any officer(s) or employee(s) who serve as Plan Administrator (including
any such individual who formerly served as Plan Administrator) against all
liabilities, damages, costs and expenses (including attorneys' fees and amounts
paid in settlement of any claims approved by the Employer) occasioned by any act
or omission to act in connection with the Plan, if such act or omission is in
good faith.
ARTICLE 9. - AMENDMENT AND TERMINATION
9.1. AMENDMENTS
The Employer shall have the right to amend the Plan from time to time, subject
to Section 9.3, by an instrument in writing which has been executed on the
employer's behalf by its duly authorized officer.
9.2. TERMINATION OF PLAN
This Plan is strictly a voluntary undertaking on the part of the employer and
shall not be deemed to constitute a contract between the Employer and any
eligible Employee (or any other employee) or a consideration for, or an
inducement or condition of employment for, the performance of the services by
any eligible employee (or other employee). The employer reserves the right to
terminate the Plan at any time, subject to Section 9.3, by an instrument in
writing which has been executed on the Employer's behalf by its duly authorized
officer. Upon termination, the employer may (a) elect to continue to maintain
the Trust to pay benefits hereunder as they become due as if the Plan had not
terminated or (b) direct the Trustee to pay promptly to Participants (or their
beneficiaries) all of the Participant's Account attributable to Elective
Deferrals and any earnings attributable thereto, reduced by losses, if any, and
the vested portion of any Additional Employer Contributions and earnings
attributable thereto, reduced by losses, if any,. After Participants and their
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beneficiaries are paid all Plan benefits to which they are entitled, all
remaining assets of the Trust shall be returned to the Employer.
9.3. EXISTING RIGHTS
No amendment or termination of the Plan shall adversely affect the rights of any
Participant with respect to all of the Participant's Account attributable to
Elective Deferrals and any earnings attributable thereto, reduced by losses, if
any, and the vested portion of any Additional Employer Contributions and
earnings attributable thereto, reduced by losses, if any, on the date of such
amendment or termination.
ARTICLE 10. - MISCELLANEOUS
10.1. PARTICIPANTS ARE UNSECURED CREDITORS
The Plan constitutes a mere promise by the Employer to make payments in
accordance with the terms of the Plan and Participants and beneficiaries shall
have the status of general unsecured creditors of the Employer. Nothing in the
Plan will be construed to give any employee or any other person rights to any
specific assets of the Employer or of any other person. In all events, it is the
intent of the Employer that the Plan be treated as unfunded for tax purposes and
for purposes of ERISA.
10.2. NON-ASSIGNABILITY
The benefits, payments, proceeds or claims of any Participant or beneficiary are
not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumberance, attachment, or garnishment by creditors of any
Participant or any beneficiary of any Participant, nor shall any Participant or
beneficiary have any right to anticipate, sell, transfer, assign, pledge, or
encumber any of the benefits or payments or proceeds which he or she may expect
to receive, contingently or otherwise, under the Plan.
10.3. LIMITATION OF PARTICIPANTS' RIGHTS
Nothing contained in the Plan shall confer upon any person a right to be
employed or to continue in the employ of the Employer, or interfere in any way
with the right of the Employer to terminate the employment of a Participant in
the Plan at any time, with or without cause.
10.4. PARTICIPANTS BOUND
Any action with respect to the Plan taken by the Plan Administrator or the
Employer or the Trustee or any action authorized by or taken at the direction of
the Plan Administrator, the employer or the Trustee shall be conclusive upon all
Participants and beneficiaries entitled to benefits under the Plan.
10.5. RECEIPT AND RELEASE
Any payment to any Participant or beneficiary in accordance with the provisions
of the Plan shall, to the extent thereof, be in full satisfaction of all claims
against the employer, the Plan Administrator and the Trustee under the Plan, and
the Plan Administrator may require such Participant or beneficiary, as a
condition precedent to such payment, to execute a receipt and release to such
effect. If any Participant or beneficiary is determined by the Plan
Administrator to be incompetent by reason of physical or mental disability
(including minority) to give a valid receipt and release, the Plan Administrator
may cause the payment or payments becoming due to such person to be made to
another person for his or her benefit without responsibility on the part of the
Plan Administrator the employer or the Trustee to follow the application of such
funds.
10.6. GOVERNING LAW
The Plan shall be construed, administered, and governed in all respects under
and by the laws of the Commonwealth of Massachusetts. If any provision shall be
held by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall continue to be fully effective.
10.7. HEADINGS AND SUBHEADINGS
Headings and subheadings in this Plan are inserted for convenience only and are
not to be considered in the construction of the provisions hereof.
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TRUST FOR THE ALPHA INDUSTRIES EXECUTIVE COMPENSATION PLAN
This Agreement made this day of January 3, 1995 by and between Alpha
Industries, Inc. ("Company") and Merrill Lynch, an Illinois corporation
(Trustee);
WHEREAS, Company has adopted a nonqualified deferred compensation Plan
with the name "The Alpha Industries Executive Compensation Plan".
WHEREAS, Company has incurred or expects to incur liability under the
terms of such Plan with respect to the individuals participating in such Plan.
WHEREAS, Company wishes to establish a trust (the "Trust") and to
contribute to the Trust assets that shall be held therein, subject to the claims
of Company's Insolvency, as herein defined, until paid to Plan participants and
their beneficiaries in such manner and at such time as specified in the Plan;
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
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purpose of Title I of the Employee Retirement Income Security Act of 1974.
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;
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 such cash and/or
marketable securities, if any, listed in Appendix A, 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 is revocable; it shall become
irrevocable upon a Change in Control, as defined herein.
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(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.
(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 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.) Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property in trust with Trustee
to augment the principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional deposits.
(f.) Trustee shall not be obligated to receive property unless prior
thereto Trustee has agreed that such property is acceptable to Trustee and
Trustee has received such reconciliation, allocation, investment or other
information concerning, or representation with respect to, the property as
Trustee may require. Trustee shall have no duty or authority to (a) require any
deposits to be made under the Plan or to Trustee, (b) compute any amount to be
deposited under the Plan to Trustee, or (c) determine whether amounts received
by Trustee comply with the Plan. Assets of the Trust may, in Trustee's
discretion, be held in an account with an affiliate of Trustee.
Section 2. Accounting for and Payments to Plan Participants and Their
Beneficiaries.
(a.) At the request of the Company, the Trustee shall maintain and invest
separate asset accounts corresponding to each participant, and such sub-accounts
thereunder as may be requested by the Company. As of the last business day of
each calendar quarter, the Trustee shall provide the Company with a statement of
each participant's account reflecting the income, gains and losses (realized and
unrealized), amounts of deferrals, and distributions of such account since the
prior statement.
(b.) With respect to each Plan participant Company shall deliver to
Trustee a schedule (the "Payment Schedule") that indicates the amounts payable
in respect of the 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), and the time of commencement for payment of such
amounts. The Payment Schedule shall be delivered to Trustee not more than 30
business days not fewer than 15 business days prior to the first date on which a
payment is to be made to the Plan participant. Any change to a Payment Schedule
shall be delivered to Trustee not more than 30 days nor fewer than 15 days prior
to the date on which the first payment is to be made in accordance with the
changed Payment Schedule. Except as otherwise provided herein, Trustee shall
make payments to Plan participants and their beneficiaries in accordance with
such Payment Schedule. The Trustee shall make provisions 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 and shall pay amounts withheld to the appropriate taxing authorities or
11
determine that such amounts have been reported, withheld and paid by Company, it
being understood among the parties hereto that (1) Company shall on a timely
basis provide Trustee specific information as to the amount of taxes to be
withheld and (2) Company shall be obligated to receive such withheld taxes from
Trustee and properly pay and report such amounts to the appropriate taxing
authorities.
(c.) The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan shall be determined by Company or such party as it shall
designate under the Plan, and any claim for such benefits shall be considered
and reviewed under the procedures set out in the Plan.
(d.) Company may make payment of benefits directly to Plan participants or
their beneficiaries as they become due under the terms of the Plan, Company
shall notify Trustee of its decision to make payment of benefits directly prior
to the time amounts are payable to 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, Company shall make the balance of each payment as it falls due. Trustee
shall notify Company where principal and earnings are not sufficient.
(e.) Trustee shall have no responsibility to determine whether the Trust
is sufficient to meet the liabilities under the Plan, and shall not be liable
for payments or Plan liabilities in excess of the value of the Trust's assets.
Section 3. Trustee 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 Company
(or, if there is no Chief Executive Officer, the highest ranking officer) 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 promptly notify Company of such allegation,
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.
(3.) If at any time Trustee has determined that Company is Insolvent,
Trustee
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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 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 for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants provided for hereunder during any such period of discontinuance;
provided that Company has given Trustee the information with respect to such
payments made during the period of discontinuance prior to resumption of
payments by Trustee.
Section 4. Payments to Company.
Except as provided in Section 3 hereof, after the Trust becomes
irrevocable, 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.
Section 5. Investment Authority.
(a.) Trustee may invest in securities (including stock or rights to
acquire stock) or obligations issued by 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 exercised by or rest with Plan participants,
except that voting rights with respect to Trust assets will be exercised by
Company unless an investment adviser has been appointed pursuant to Section 5(c)
and voting authority has been delegated to such investment adviser.
(b.) 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. This right is exercised by Company in a non fiduciary
capacity without the approval or consent of any person in a fiduciary capacity.
(c.) Trustee may appoint one or more investment advisers who are
registered as investment advisers under the Investment Advisers Act of 1940, who
may be affiliates of Trustee, to provide investment advice on a discretionary or
non-discretionary basis with respect to all or a specified portion of the assets
of the Trust.
(d.) Only for the purpose of carrying out the directions of the Company,
or the directions of one or more agents designated in writing by the Company to
the Trustee, which agents may be designated with respect to a portion of the
assets held by the Trustee, the Trustee, or Trustee's designee, is authorized
and empowered:
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(1.) To invest and reinvest Trust assets, together with the income
therefrom, in common stock, preferred stock, convertible preferred
stock, bonds, debentures, convertible debentures and bonds,
mortgages, notes, commercial paper and other evidences of
indebtedness (including those issued by Trustee), shares of mutual
funds (which funds may be sponsored, managed or offered by an
affiliate of Trustee), guaranteed investment contracts, bank
investment contracts, other securities, policies of life insurance,
annuity contracts, options, options to buy or sell securities or
other assets, and all other property of any type (personal, real or
mixed and tangible or intangible);
(2.) To deposit or invest all or any part of the assets of the Trust in
savings accounts or certificates of deposit or other deposits in a
bank or saving and loan association or other depository institution,
including Trustee or any of its affiliates, provided with respect to
such deposits with Trustee or an affiliate the deposits bear a
reasonable interest rate;
(3.) To hold, manage, improve, repair and control all property, real or
personal, forming part of the Trust; to sell, convey, transfer,
exchange, partition, lease for any term, even extending beyond the
duration of this Trust, and otherwise dispose of the same from time
to time;
(4.) To hold in cash, without liability for interest, such portion of the
Trust as is pending investments, or payment of expenses, or the
distribution of benefits;
(5.) To take such actions as may be necessary or desirable to protect the
Trust from loss due to the default on mortgages held in the Trust
including the appointment of agents or trustees in such other
jurisdictions as may seem desirable, to transfer property to such
agents or trustees, to grant to such agents such powers as are
necessary or desirable to protect the Trust, to direct such agent or
trustee, or to delegate such power to direct, and to remove such
agent or trustee;
(6.) To settle, compromise or abandon all claims and demands in favor of
or against the Trust;
(7.) To exercise all of the further rights, powers. options and
privileges granted, provided for, or vested in trustees generally
under the laws of the state in which Trustee is incorporated as set
forth above, so that the powers conferred upon Trustee herein shall
not be in limitation of any authority conferred by law, but shall be
in addition thereto:
(8.) To maintain accounts at, and execute transactions through, any
brokerage or other firm, including any firm which is an affiliate of
Trustee.
(9.) to register securities, or any other property, in its name or in the
name of any nominee, including the name of any affiliate or the
nominee name designated by any affiliate, with or without indication
of the capacity in which property shall be held, or to hold
securities in bearer form and to deposit any securities or other
property in an depository or clearing corporation;
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(10.) to make, execute and deliver, as Trustee, any and all deeds, leases,
mortgages, conveyances, waivers, releases or other instruments in
writing necessary or appropriate for the accomplishment of any of
the powers listed in this Trust Agreement; and
(11.) generally to do all other acts necessary or appropriate for the
protection of the property held by the Trust.
Section 6. Additional Powers of Trustee. To the extent necessary or which
it deems appropriate to implement its powers under Section 5 or otherwise to
fulfill any of its duties and responsibilities as trustee of the Trust, Trustee
shall have the following additional powers and authority This is former
subsection (b). to designate and engage the services of, and to delegate powers
and responsibilities to, such agents, representatives, advisers, counsel and
accountants ("Agents") as Trustee considers necessary or appropriate, any of
whom may be an affiliate of Trustee or a person who renders services to such an
affiliate, and, as a part of its expenses under this Trust Agreement, to pay
their reasonable expenses and compensation, provided that the Trustee shall not
retain any Agent without the prior consent of the Company, unless either (i)
there are exigent circumstances that require the action before it would be
reasonably practical for the Trustee to first obtain the Company's approval, or
(ii) if the Company is insolvent, as provided in Section 3(a).
Section 7. Disposition of Income.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
Section 8. 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 90 days following the close of each calendar year
and within 90 days after 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. Trustee may satisfy its obligation under this Section 8 by
rendering to Company monthly statements setting forth the information required
by this Section separately for the month covered by the statement.
Section 9. Responsibility and Indemnity 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 a
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
15
approval given by Company which is contemplated by, and in conformity with,
the terms of the Plan and this Trust and is given in writing by Company. Trustee
shall also incur no liability to any person for any failure to act in the
absence of direction, request or approval from Company which is contemplated by,
and in conformity with, the terms of this Trust. 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.) Company hereby indemnifies Trustee and each of its affiliates
(collectively, the "Indemnified Parties") against, and shall hold them harmless
from, any and all loss, claims, liability, and expense, including reasonable
attorneys' fees, imposed upon or incurred by any Indemnified Party as a result
of any acts taken, or any failure to act, in accordance with the directions from
Company or any designee of Company, or by reason of the Indemnified Party's good
faith execution of its duties with respect to the Trust, including, but not
limited to, its holding of assets of the Trust, Company's obligations in the
foregoing regard to be satisfied promptly by Company, provided such act or
failure to act does not arise from the negligence, gross negligence, or willful
misconduct of the Trustee. 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 hire agents, accounts, actuaries, investment advisors,
financial consultants or other professionals to assist it in performing any of
its duties or obligations hereunder.
(e.) Trustee shall have, without exclusion, all powers conferred on
Trustee 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 9(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 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.
Section 10. Compensation and Expenses of Trustee.
Company shall pay all administrative expenses, but if not so paid, after
written notice by Trustee to Company, the expenses shall be paid from the Trust.
Section 11. Resignation and Removal of Trustee.
(a.) Trustee may resign at any time by written notice to Company, which
shall be effective 30 days after receipt of such notice unless Company and
Trustee agree otherwise.
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(b.) Trustee may be removed by Company on 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 60 days after receipt of notice of
resignation, removal or transfer, unless Company extends the time limit, and
provided that Trustee is provided assurance by Company reasonably satisfactory
to Trustee that all fees and expenses reasonably anticipated will be paid.
(d.) If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 12 hereof, by the effective date or resignation or
removal under paragraph(s) (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.
(e.) Upon settlement of the account and transfer of the Trust assets to
the successor Trustee, all rights and privileges under this Trust Agreement
shall vest in the successor Trustee and all responsibility and liability of
Trustee with respect to the Trust and assets thereof shall terminate subject
only to the requirement that Trustee execute all necessary documents to transfer
the Trust assets to the successor Trustee.
Section 12. Appointment of Successor.
(a.) If Trustee resigns or is removed in accordance with Section 11(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 fights 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 examine the records and act 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 13. 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 or shall make the Trust revocable since the
Trust is 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. Upon termination of the Trust any assets remaining in
the Trust shall be returned to Company.
(c.) Upon written approval of participants or beneficiaries entitled to
17
payment of benefits pursuant to the terms of the Plan, Company may terminate
this Trust prior to the time all benefit
payments under the Plan have been made. All assets in the Trust at termination
shall be returned to Company.
Section 14. 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 state in which Trustee is incorporated as set forth above.
(d.) The provisions of Sections 2(d), 3(b)(3), 9(b) and 15 of this
Agreement shall survive termination of this Agreement.
(e.) The rights, duties, responsibilities, obligations and liabilities of
Trustee are as set forth in this Trust Agreement, and no provision of the Plan
or any other documents shall affect such rights, responsibilities, obligations
an liabilities. If there is a conflict between provisions of the Plan and this
Trust Agreement with respect to any subject involving Trustee including but not
limited to the responsibility, authority, or powers of Trustee, the provisions
of this Trust Agreement shall be controlling.
(f.) For purposes of this Trust, Change of Control shall mean: The
purchase or other acquisition by any person, entity or group of persons, within
the meaning of section 13(d) or 14(d) of the Securities Exchange Act of 1934
("Act"), or any comparable successor provisions, of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Act) of 30 percent or more of
either the outstanding shares of common stock or the combined voting power of
Company's then outstanding voting securities entitled to vote generally, or the
approval by the stockholders of Company of a reorganization, merger, or
consolidation, in each case, with respect to which persons who were stockholders
of Company immediately prior to such reorganization, merger or consolidation do
not immediately thereafter, own more than 50 percent of the combined voting
power entitled to vote generally in the election of directors of the
reorganized, merged or consolidated Company's then outstanding securities, or a
liquidation or dissolution of Company or of the sale of all or substantially all
of Company's assets.
Section 15. Arbitration.
- Arbitration is final and binding on the parties.
- The parties waiving their right to seek remedies in court, including the
right to jury trial.
- Pre-arbitration discovery is generally more limited than and different
from court proceedings.
18
- The arbitrators' award is not required to include factual findings or
level reasoning and any party's right to appeal or seek modification of rulings
by the arbitrators is strictly limited.
- The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry.
Company agrees that all controversies which may arise between Company and either
or both the Trustee and its affiliate Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("MLPF&S") in connection with the Trust, including, but not limited
to, those involving any transactions, or the construction, performance, or
breach of this or any other agreement between Company and either or both the
Trustee and MLPF&S, whether entered into prior, on, or subsequent to the date
hereof, shall be determined by arbitration. Any arbitration under this agreement
shall be conducted only before the New York Stock Exchange, Inc., the American
Stock Exchange, Inc., or arbitration facility provided by any other exchange of
which MLPF&S is a member, the National Association of Securities Dealers, Inc.,
or the Municipal Securities Rulemaking Board, and in accordance with its
arbitration rules then in force. Company may elect in the first instance whether
arbitration shall be conducted before the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., other exchange of which MLPF&S is a member, the
National Association of Securities Dealers. Inc. or the Municipal Securities
Rulemaking Board, but if Company fails to make such election, by registered
letter or telegram addressed to Merrill Lynch Trust Company, Employee Benefit
Trust Operations, P.O. Box 30532, New Brunswick, New Jersey 08989-0532, before
the expiration of five days after receipt of a written request from MLPF&S
and/or the Trustee to make such election then MLPF&S and/or the Trustee may make
such election. Judgment upon the award of arbitrators may be entered in any
court, state or federal, having jurisdiction. No person shall bring a putative
or certified class action to arbitration, nor seek to enforce any pre-dispute
arbitration agreement against any person who has initiated in court a putative
class action; who is a member of putative class who has not opted out of the
class with respect to any claims encompassed by the putative class action until:
(i) the class certification is denied;
(ii) the class is decertified; or
(iii) the customer is excluded from the class by the court. Such
forbearance to enforce an agreement to arbitrate shall not constitute a waiver
of any rights under this agreement except to the extent stated herein.
Section 16. Effective Date.
The effective date of this Trust Agreement shall be January 3, 1995.
IN WITNESS WHEREOF, Company and the Trustee have executed this Trust
Agreement each by action of a duly authorized person,
By signing this Agreement, the undersigned Company acknowledges (1) that,
in accordance with Section 15 of this Agreement, Company is agreeing in advance
to arbitrate any controversies which may arise with either or both the Trustee
or LPF&S (2) receipt of a copy of this Agreement.
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(Company) Alpha Industries, Inc.
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By:
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Name/Title: John A. Hanna, Jr./Treasurer
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(Trustee)
-----------------------------------
By:
-----------------------------------
Name/Title: Chris Rosin/Trust Officer
-----------------------------------
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