þ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934 |
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934 |
Massachusetts | 04-2348234 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
|
One Technology Way, Norwood, MA | 02062-9106 | |
(Address of principal executive offices) | (Zip Code) |
Common Stock $0.16 2 / 3 Par Value | New York Stock Exchange | |
Title of Each Class | Name of Each Exchange on Which Registered |
Document Description
|
Form 10-K Part | |||
Portions of the Registrants
Proxy Statement for the Annual Meeting of Shareholders to be
held March 13, 2007
|
III |
ITEM 1. | BUSINESS |
1
2
3
4
5
6
7
8
9
ITEM 1A. | RISK FACTORS |
10
11
12
| difficulty integrating acquired technologies, operations and personnel with our existing businesses; | |
| diversion of management attention in connection with both negotiating the acquisitions and integrating the assets; | |
| strain on managerial and operational resources as management tries to oversee larger operations; | |
| the future funding requirements for acquired companies, which may be significant; | |
| potential loss of key employees; | |
| exposure to unforeseen liabilities of acquired companies; and | |
| increased risk of costly and time-consuming litigation. |
13
| actual or anticipated fluctuations in our revenue and operating results; | |
| changes in financial estimates by securities analysts or our failure to perform in line with such estimates; | |
| changes in market valuations of other semiconductor companies; | |
| announcements by us or our competitors of significant new products, technical innovations, acquisitions or dispositions, litigation or capital commitments; and | |
| departures of key personnel. |
ITEM 1B. | UNRESOLVED STAFF COMMENTS |
14
ITEM 2.
PROPERTIES
Principal Properties
Owned:
Use
Floor Space
Wafer fabrication, testing,
engineering, marketing and administrative offices
586,200 sq. ft.
Wafer probe and testing,
warehouse, engineering and administrative offices
465,900 sq. ft.
Wafer fabrication, wafer probe and
testing, engineering and administrative offices
405,000 sq. ft.
Engineering, administrative
offices and warehouse
100,500 sq. ft.
Product testing, engineering and
administrative offices
98,700 sq. ft.
Engineering, administrative offices
76,000 sq. ft
Components assembly and testing,
engineering and administrative offices
74,000 sq. ft.
Principal
Properties
Lease
Leased:
Use
Floor Space
Expiration
Renewals
(fiscal year)
Corporate headquarters,
engineering, components testing, sales and marketing offices
130,000 sq. ft.
2007
3, five-yr.
periods
Wafer fabrication, components
testing and assembly engineering, marketing and administrative
offices
117,000 sq. ft.
2011
None
Wafer fabrication
63,100 sq. ft.
2010
1, five-yr.
period
Engineering and administrative
offices
43,500 sq. ft.
2007
2, five-yr.
periods
Engineering and administrative
offices
41,900 sq. ft.
2008
1, three-yr.
period
(a)
We ceased production at this wafer fabrication facility on
November 9, 2006. For additional information, see
Note 5 in the Notes to our Consolidated Financial
Statements contained in Item 8 of this Annual Report on
Form 10-K.
15
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ITEM 3.
LEGAL
PROCEEDINGS
16
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17
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18
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20
ITEM 4.
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
Age
Position(s)
Business Experience
72
Chairman of the Board
Chairman of the Board since 1973;
Chief Executive Officer from 1973 to November 1996; President
from 1971 to November 1991.
61
President, Chief Executive Officer
and Director
Chief Executive Officer since
November 1996; President and Director since November 1991;
Executive Vice President from 1988 to November 1991; Group Vice
President Components from 1982 to 1988.
60
Vice President, Research and
Development
Vice President, Research and
Development since March 1998; Vice President of Research and
Chief Scientist of Digital Equipment Corp. from 1983 to 1998.
52
Vice President and General
Manager, Micromachined Products Division
Vice President and General
Manager, Micromachined Products Division since January 2003;
President, CEO and Chairman of the Board of Telephotonics Inc.,
an optical components company, from March 2001 to 2003; Vice
President and General Manager of Conexant Systems Inc. from
March 2000 to March 2001; Co-founder, CEO, President, and
Chairman of the Board of Maker Communications Inc. from 1994 to
March 2000.
52
Vice President, Worldwide
Manufacturing
Vice President, Worldwide
Manufacturing since February 1994; Vice President,
Manufacturing, Limerick Site, Analog Devices, B.V.
Limerick, Ireland from November 1991 to February 1994; Plant
Manager, Analog Devices, B.V. Limerick, Ireland from
January 1991 to November 1991.
47
Treasurer
Treasurer since March 1993;
Assistant Treasurer from October 1991 to March 1993; Manager of
Treasury Finance from March 1987 to October 1991; Manager of
International Treasury from October 1985 to March 1987.
19
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Age
Position(s)
Business Experience
47
Vice President, Human Resources
Vice President, Human Resources
since November 2006; Chief Human Resource Officer of Lenevo, an
international computer manufacturer, From January 2005 to June
2006; General Manager of IBM Business Transformation Outsourcing
from September 2003 to April 2005; Vice President, Human
Resources of IBM Asia Pacific Region from December 1999 to
September 2003.
56
Vice President, Analog
Semiconductor Components
Vice President and General
Manager, Analog Semiconductor Components since February 1994;
Vice President and General Manager, Analog Devices,
B.V. Limerick, Ireland from January 1991 to February
1994; Product Line Manager, Analog Devices, B.V.
Limerick, Ireland from October 1988 to January 1991.
56
Vice President, DSP and Systems
Products Group
Vice President, DSP and Systems
Products Group since March 2001; Vice President, Sales from May
1992 to March 2001; Vice President, Sales and
Marketing Europe and Southeast Asia from 1990 to
1992; General Manager, Analog Devices, B.V.
Limerick, Ireland from 1987 to 1990.
59
Vice President, Finance and Chief
Financial Officer
Vice President, Finance and Chief
Financial Officer since November 1991; Vice President since 1988
and Treasurer from 1985 to March 1993; Director of Taxes from
1983 to 1985.
46
Vice President, Worldwide Sales
Vice President, Worldwide Sales
since March 2001; Vice President and General Manager, Silicon
Valley Business Units and Computer & Networking from
1999 to March 2001; Product Line Director from 1995 to 1999;
Product Marketing Manager from 1988 to 1995.
45
Vice President, General Counsel
and Secretary
Vice President, General Counsel
and Secretary since January 2006; Senior Vice President, General
Counsel and Secretary of RSA Security Inc. from January 2000 to
November 2005; Vice President, General Counsel and Secretary of
RSA Security Inc. from June 1998 to January 2000.
Table of Contents
66
ITEM 5.
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Fiscal 2006
Fiscal 2005
High
Low
High
Low
$
40.40
$
34.18
$
41.66
$
33.95
$
41.48
$
36.61
$
39.48
$
32.65
$
37.96
$
29.89
$
41.40
$
33.50
$
33.24
$
26.07
$
41.21
$
31.71
Fiscal 2006
Fiscal 2005
$
0.12
$
0.06
$
0.12
$
0.06
$
0.16
$
0.10
$
0.16
$
0.10
Approximate Dollar
Total Number of Shares
Value of Shares that
Total Number of
Purchased as Part of
May Yet Be Purchased
Shares
Average Price Paid
Publicly Announced
Under the Plans or
Period
Purchased
Per Share(a)
Plans or Programs(b)
Programs
4,074,249
$
29.86
4,074,249
$
547,793,311
4,146,695
$
30.05
4,146,695
$
423,192,897
3,687,044
$
30.04
3,687,044
$
312,442,511
11,907,988
$
29.98
11,907,988
$
312,442,511
(a)
The average price paid per share of stock repurchased under the
stock repurchase program includes the commissions paid to the
brokers.
(b)
Repurchased pursuant to the stock repurchase program publicly
announced on August 12, 2004, as amended on May 11,
2005, under which our Board of Directors authorized the
repurchase of up to an aggregate of $1 billion of our
common stock. On March 14, 2006, our Board of Directors
authorized the repurchase by us of an additional $1 billion
of our common stock, increasing the total amount of our common
stock we can repurchase from $1 billion to $2 billion
of our common stock. Under the repurchase program, we may
repurchase outstanding shares of our common stock from time to
time in the open market and through privately negotiated
21
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transactions. Unless terminated earlier by resolution of our
Board of Directors, the repurchase program will expire when we
have repurchased all shares authorized for repurchase under the
repurchase program.
ITEM 6.
SELECTED
FINANCIAL DATA
(thousands except per share amounts)
2006
2005
2004
2003
2002
$
2,573,176
$
2,388,808
$
2,633,800
$
2,047,268
$
1,707,508
549,482
414,787
570,738
298,281
105,299
1.53
1.12
1.52
0.82
0.29
1.48
1.08
1.45
0.78
0.28
0.56
0.32
0.20
$
3,986,851
$
4,583,211
$
4,723,271
$
4,097,877
$
4,985,554
1,274,487
*
Acquisition-related goodwill is no longer amortized effective in
fiscal 2003, in accordance with SFAS 142. The Company
includes the expense associated with stock options in the
statement of income effective in fiscal 2006 upon the adoption
of SFAS 123R.
22
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ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (all tabular amounts in thousands except per share
amounts)
Fiscal Year
2006
2005
2004
$
2,573,176
$
2,388,808
$
2,633,800
58.5
%
57.9
%
59.0
%
$
549,482
$
414,787
$
570,738
21.4
%
17.4
%
21.7
%
$
1.48
$
1.08
$
1.45
23
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Fiscal Year
2006
2005
2004
$
1,083,602
$
939,020
$
950,659
42
%
39
%
36
%
15
%
(1
)%
32
%
$
298,844
$
332,062
$
374,362
12
%
14
%
14
%
(10
)%
(11
)%
14
%
$
748,176
$
735,743
$
959,872
29
%
31
%
37
%
2
%
(23
)%
30
%
$
442,554
$
381,983
$
348,907
17
%
16
%
13
%
16
%
9
%
34
%
$
2,573,176
$
2,388,808
$
2,633,800
100
%
100
%
100
%
8
%
(9
)%
29
%
24
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Fiscal Year
2006
2005
2004
$
1,023,499
$
927,720
$
884,421
40
%
39
%
33
%
10
%
5
%
33
%
$
532,050
$
445,734
$
467,223
21
%
19
%
18
%
19
%
(5
)%
26
%
$
219,651
$
214,160
$
264,205
8
%
9
%
10
%
3
%
(19
)%
9
%
$
301,633
$
242,805
$
285,588
12
%
10
%
11
%
24
%
(15
)%
47
%
$
2,076,833
$
1,830,419
$
1,901,437
81
%
77
%
72
%
13
%
(4
)%
29
%
$
205,483
$
186,660
$
175,302
8
%
8
%
7
%
10
%
6
%
10
%
$
14,500
$
54,896
$
56,118
1
%
2
%
2
%
(74
)%
(2
)%
(13
)%
$
238,698
$
266,586
$
432,638
9
%
11
%
16
%
(10
)%
(38
)%
56
%
$
37,662
$
50,247
$
68,305
1
%
2
%
3
%
(25
)%
(26
)%
(10
)%
$
496,343
$
558,389
$
732,363
19
%
23
%
28
%
(11
)%
(24
)%
27
%
$
2,573,176
$
2,388,808
$
2,633,800
8
%
(9
)%
29
%
*
We sold our DSP-based DSL ASIC and network processor product
line in the second quarter of fiscal 2006.
25
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Fiscal Year
2006
2005
2004
25
%
25
%
25
%
22
%
23
%
20
%
19
%
19
%
19
%
13
%
11
%
14
%
21
%
22
%
22
%
Fiscal Year
2006
2005
2004
$
1,506,140
$
1,382,840
$
1,553,801
58.5
%
57.9
%
59.0
%
26
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Fiscal Year
2006
2005
2004
$
536,747
$
497,097
$
514,442
20.9
%
20.8
%
19.5
%
27
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Fiscal Year
2006
2005
2004
$
394,086
$
338,276
$
340,036
15.3
%
14.2
%
12.9
%
Fiscal Year
2006
$
5,500
11,124
5,087
$
21,711
28
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Fiscal Year
2006
2005
2004
$
551,806
$
515,987
$
699,323
21.4
%
21.6
%
26.6
%
29
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Fiscal Year
2006
2005
2004
$
52
$
27
$
224
(100,169
)
(71,688
)
(36,047
)
(10,472
)
(42
)
2,410
$
(110,589
)
$
(71,703
)
$
(33,413
)
Fiscal Year
2006
2005
2004
$
113,661
$
172,903
$
161,998
17.2
%
29.4
%
22.1
%
30
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Fiscal Year
2006
2005
2004
$
549,482
$
414,787
$
570,738
21.4
%
17.4
%
21.7
%
$
1.48
$
1.08
$
1.45
31
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32
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Fiscal Year
2006
2005
2004
$
621,102
$
672,704
$
778,045
24.1
%
28.2
%
29.5
%
Fiscal Year
2006
2005
$
329,393
$
320,523
47
47
$
378,651
$
325,605
128
115
33
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Less than
More than
Total
1 Year
1-3 Years
4-5 Years
5 Years
$
83,634
$
30,311
$
39,777
$
8,570
$
4,976
31,742
1,109
2,204
28,429
7,497
7,497
$
122,873
$
38,917
$
41,981
$
8,570
$
33,405
(a)
Certain of our operating lease obligations include escalation
clauses. These escalating payment requirements are reflected in
the table.
(b)
These payments relate to obligations under our deferred
compensation plan. The deferred compensation plan allows certain
members of management and other highly-compensated employees and
non-employee directors to defer receipt of all or any portion of
their compensation. Prior to January 1, 2005, participants
could also defer gains on stock options and restricted stock
granted before July 23, 1997. The amount in the More
than 5 Years column of the table represents the
remaining total balance under the deferred compensation plan to
be paid to participants who have not terminated employment.
Since we cannot reasonably estimate the timing of withdrawals
for participants who have not yet terminated employment we have
included the future obligation to these participants in the
More than 5 Years column of the table. All
other columns represent installment payments to be made to those
employees who have retired or are on long-term disability.
34
Table of Contents
(c)
Our funding policy for our foreign defined benefit plans is
consistent with the local requirements of each country. The
payment obligations in the table are estimates of our expected
contributions to these plans for fiscal year 2007. The actual
future payments may differ from the amounts presented in the
table and reasonable estimates of payments beyond one year are
not practical because of potential future changes in variables
such as plan asset performance, interest rates and the rate of
increase in compensation levels.
35
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36
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37
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38
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39
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ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
40
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ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
(thousands, except per share amounts)
2006
2005
2004
$
2,573,176
$
2,388,808
$
2,633,800
1,067,036
1,005,968
1,079,999
1,506,140
1,382,840
1,553,801
536,747
497,097
514,442
394,086
338,276
340,036
21,711
1,790
31,480
954,334
866,853
854,478
551,806
515,987
699,323
52
27
224
(100,169
)
(71,688
)
(36,047
)
(10,472
)
(42
)
2,410
(110,589
)
(71,703
)
(33,413
)
662,395
587,690
732,736
142,115
158,299
135,067
(28,454
)
14,604
26,931
113,661
172,903
161,998
748
$
549,482
$
414,787
$
570,738
358,762
371,791
375,031
370,964
383,474
392,854
$
1.53
$
1.12
$
1.52
$
1.48
$
1.08
$
1.45
$
0.56
$
0.32
$
0.20
$
7,714
$
$
34,523
4,870
7,255
33,192
$
75,429
$
4,870
$
7,255
41
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(thousands, except share and per share amounts)
2006
2005
$
343,947
$
627,591
1,784,387
2,078,351
329,393
320,523
378,651
325,605
91,045
86,430
1,109
234,376
82,770
59,580
3,011,302
3,732,456
353,912
345,103
1,371,332
1,323,397
78,976
83,969
109,028
108,345
1,913,248
1,860,814
1,350,623
1,260,908
562,625
599,906
30,579
42,941
850
2,424
256,209
163,373
42,808
4,203
54,734
13,328
27,744
24,580
412,924
250,849
$
3,986,851
$
4,583,211
$
124,566
$
128,317
149,543
121,802
60,956
172,277
1,109
234,376
154,769
162,151
490,943
818,923
3,414
1,735
30,633
44,657
25,851
26,395
59,898
72,787
217
57,001
61,139
380,206
3,378,999
3,269,420
(207
)
(19,264
)
3,435,793
3,691,501
$
3,986,851
$
4,583,211
(1)
Includes $3,703 related to stock-based compensation at
October 28, 2006.
42
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Accumulated
Capital in
Other
Common Stock
Excess of
Retained
Comprehensive
(thousands)
Shares
Amount
Par Value
Earnings
Income(Loss )
370,234
$
61,707
$
745,501
$
2,477,900
$
2,966
570,738
(75,007
)
9,433
1,572
123,684
20,279
37
6
955
5,571
783
(3,864
)
(644
)
(136,439
)
375,840
62,641
759,551
2,973,631
3,749
414,787
(118,998
)
5,606
934
89,701
50,374
10
1
541
3,095
(23,013
)
(14,624
)
(2,437
)
(523,056
)
366,832
61,139
380,206
3,269,420
(19,264
)
549,482
(201,451
)
5,824
971
94,408
228,258
77,573
10
2
541
433
19,057
(30,666
)
(5,111
)
(781,419
)
(238,452
)
342,000
$
57,001
$
$
3,378,999
$
(207
)
43
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(thousands)
2006
2005
2004
$
549,482
$
414,787
$
570,738
5,838
(1,595
)
1,328
1,398
(2,461
)
(1,085
)
7,492
(11,586
)
(1,046
)
(436
)
(930
)
1,210
1,090
7,056
(12,516
)
1,254
4,876
(4,718
)
5,526
(111
)
(1,723
)
(6,240
)
4,765
(6,441
)
(714
)
19,057
(23,013
)
783
$
568,539
$
391,774
$
571,521
44
Table of Contents
(thousands)
2006
2005
2004
$
549,482
$
414,787
$
570,738
166,851
153,181
149,920
5,312
2,383
2,710
75,429
4,870
7,255
1,676
(748
)
459
(13,027
)
21,711
784
1,822
2,404
(181,178
)
50,374
20,279
(28,454
)
14,604
26,931
(6,705
)
5,298
(30,723
)
(52,043
)
22,797
(58,637
)
(17,327
)
(7,320
)
(15,472
)
245,629
41,234
(14,543
)
5,682
(5,937
)
70,983
(247,291
)
(43,271
)
13,869
96,336
15,003
27,590
200
2,879
3,065
71,620
257,917
207,307
621,102
672,704
778,045
(129,297
)
(85,457
)
(146,245
)
(2,483,123
)
(3,457,017
)
(4,013,786
)
2,788,717
3,526,871
3,445,015
35,574
1,735
23,070
(157,017
)
723
5,644
(10,449
)
44,808
(9,959
)
(689,891
)
(201,451
)
(118,998
)
(75,007
)
(1,024,982
)
(525,493
)
(137,083
)
94,392
89,402
124,115
181,178
(950,863
)
(555,089
)
(87,975
)
1,309
995
887
(283,644
)
108,651
1,066
627,591
518,940
517,874
$
343,947
$
627,591
$
518,940
45
Table of Contents
1.
Description
of Business
2.
Summary
of Significant Accounting Policies
46
Table of Contents
2006
2005
2004
$
$
532
$
2,712
(7,908
)
(19,967
)
(4,322
)
$
(7,908
)
$
(19,435
)
$
(1,610
)
2006
2005
$
42,944
$
39,271
42,803
417,238
104,925
31,223
153,275
139,859
$
343,947
$
627,591
$
856,196
$
1,008,115
801,821
369,046
1,658,017
1,377,161
126,370
701,190
126,370
701,190
$
1,784,387
$
2,078,351
47
Table of Contents
2006
2005
2004
$
61,099
$
93,185
$
84,987
$
32
$
27
$
224
2006
2005
$
16,430
$
12,414
264,076
240,064
98,145
73,127
$
378,651
$
325,605
Up to 25 years
3-8 years
3-8 years
48
Table of Contents
2006
2005
$
163,373
$
163,373
812
80,641
7,250
4,133
$
256,209
$
163,373
Amortization
TTPCom
Integrant
AudioAsics
Period
$
11,600
$
18,027
$
5,700
5 years
458
2 years
1,600
2,562
2,600
2 or 5 years*
549
5 years
$
13,200
$
21,596
$
8,300
*
Acquisition related customer relationship intangible assets
related to Integrant will be amortized over two years and
customer relationship intangible assets for TTPCom and
AudioAsics will be amortized over five years.
49
Table of Contents
October 28, 2006
October 29, 2005
Gross
Gross
Carrying
Accumulated
Carrying
Accumulated
Amount
Amortization
Amount
Amortization
$
53,177
$
17,714
$
17,423
$
13,567
1,635
995
1,167
820
6,920
707
92
92
6,617
6,125
6,055
6,055
$
68,349
$
25,541
$
24,737
$
20,534
Amortization Expense
$
12,965
$
12,168
$
9,135
$
5,710
$
2,646
$
184
50
Table of Contents
51
Table of Contents
2006
2005
$
(4,346
)
$
2,095
4,876
(4,718
)
(111
)
(1,723
)
$
419
$
(4,346
)
October 28, 2006
October 29, 2005
Carrying
Carrying
Amount
Fair Value
Amount
Fair Value
$
343,947
$
343,947
$
627,591
$
627,591
1,784,387
1,784,387
2,078,351
2,078,351
31,688
31,688
277,317
277,317
850
850
2,424
2,424
77
77
303
303
272
272
(1,443
)
(1,443
)
52
Table of Contents
53
Table of Contents
2006
2005
$
(4,669
)
$
(6,067
)
(5,371
)
(12,427
)
9,414
3,576
419
(4,346
)
$
(207
)
$
(19,264
)
54
Table of Contents
2006
2005
2004
$
549,482
$
414,787
$
570,738
358,762
371,791
375,031
$
1.53
$
1.12
$
1.52
$
549,482
$
414,787
$
570,738
358,762
371,791
375,031
12,202
11,683
17,823
370,964
383,474
392,854
$
1.48
$
1.08
$
1.45
52,054
46,452
14,058
55
Table of Contents
56
Table of Contents
3.
Stock-Based
Compensation and Shareholders Equity
57
Table of Contents
58
Table of Contents
2006
2005
2004
8,752
12,904
12,888
55
$
38.65
$
37.60
$
45.38
$
11.60
$
10.85
$
27.99
$
35.35
NA
NA
NA
$
9.52
$
12.60
28.7
%
27.4
%
69.2
%
5.0
5.0
5.8
4.4
%
3.6
%
3.5
%
1.3
%
0.68
%
0.36
%
59
Table of Contents
60
Table of Contents
2005
2004
$
414,787
$
570,738
3,796
5,653
(305,350
)
(213,266
)
$
113,233
$
363,125
$
1.12
$
1.52
$
0.30
$
0.97
$
1.08
$
1.45
$
0.29
$
0.91
61
Table of Contents
Weighted-
Weighted-
Average
Average
Remaining
Options
Exercise Price
Contractual
Aggregate
Outstanding
Per Share
Term in Years
Intrinsic Value
85,489
$
32.75
8,752
$
38.65
(5,382
)
$
15.32
(1,894
)
$
34.15
(2,504
)
$
44.48
84,461
$
34.09
5.6
$
343,415
61,108
$
33.32
4.6
$
308,347
82,521
$
34.01
5.5
$
342,158
(1)
In addition to the vested options, the Company expects a portion
of the unvested options to vest at some point in the future.
Options expected to vest is calculated by applying an estimated
forfeiture rate to the unvested options.
Weighted-
Restricted
Average Grant
Shares
Date Fair Value
Outstanding
Per Share
55
$
35.35
55
$
35.35
62
Table of Contents
Restricted Awards Outstanding
Options Outstanding
Shares
Weighted
Weighted
Available
Average
Average
for Grant
Number
Price Per Share
Number
Price Per Share
44,592
$
78,564
$
26.66
(12,888
)
12,888
45.38
(9,031
)
12.44
2,145
(2,145
)
34.54
33,849
80,276
31.00
(12,904
)
12,904
37.60
(5,179
)
14.88
2,512
(2,512
)
38.57
23,457
85,489
32.75
15,000
(15,968
)
(165
)
55
35.35
(8,752
)
8,752
38.65
(5,382
)
15.32
4,398
(4,398
)
40.04
17,970
55
$
35.35
84,461
$
34.09
(1)
The 2006 Plan provides that for purposes of determining the
number of shares available for issuance under the 2006 Plan, any
restricted stock award, restricted stock unit or other
stock-based award with a per share or per unit price lower than
the fair market value of our common stock on the date of grant
(a Full-Value Award) will be counted as three shares
for each share subject to the Full-Value Award.
63
Table of Contents
4.
Industry
and Geographic Segment Information
64
Table of Contents
2006
2005
2004
$
653,093
$
598,518
$
649,515
573,104
546,970
513,625
487,545
454,471
508,941
334,835
260,397
378,688
524,599
528,452
583,031
1,920,083
1,790.290
1,984,285
$
2,573,176
$
2,388,808
$
2,633,800
$
234,489
$
268,676
$
302,873
191,252
209,807
229,297
4,496
2,993
3,491
210
638
840
123,786
112,245
125,570
707
771
737
7,685
4,776
4,971
328,136
331,230
364,906
$
562,625
$
599,906
$
667,779
5.
Special
Charges
Reorganization of
Closure of Wafer
Product Development and
Total Special
Fabrication Facility
Support Programs
Charges
$
20,315
$
11,165
$
31,480
$
20,315
$
11,165
$
31,480
$
$
554
$
554
459
459
462
462
(2,029
)
(2,029
)
2,344
2,344
$
(2,029
)
$
3,819
$
1,790
65
Table of Contents
Reorganization of
Closure of Wafer
Product Development and
Total Special
Fabrication Facility
Support Programs
Charges
$
20,315
$
10,708
$
31,023
(2,029
)
3,819
1,790
(12,383
)
(8,175
)
(20,558
)
(459
)
(459
)
(455
)
(455
)
(462
)
(462
)
$
5,903
$
4,976
$
10,879
Table of Contents
6.
Acquisitions
67
Table of Contents
68
Table of Contents
7.
Deferred
Compensation Plan Investments
2006
2005
$
18,883
$
249,329
3,039
14,250
9,766
13,738
$
31,688
$
277,317
8.
Other
Investments
69
Table of Contents
9.
Accrued
Liabilities
2006
2005
$
84,792
$
70,668
10,879
31,023
59,098
60,460
$
154,769
$
162,151
10.
Debt and
Credit Facilities
11.
Deferred
Compensation Plan Liability and Other Noncurrent
Liabilities
12.
Lease
Commitments
70
Table of Contents
Operating
Leases
$
30,311
20,891
18,886
7,131
1,439
4,976
$
83,634
13.
Commitments
and Contingencies
71
Table of Contents
72
Table of Contents
73
Table of Contents
14.
Retirement
Plans
2006
2005
2004
$
10,572
$
8,231
$
7,108
7,214
6,521
5,690
(7,097
)
(7,307
)
(6,518
)
116
185
178
(27
)
69
(37
)
1,548
648
350
$
12,326
$
8,347
$
6,771
$
81
$
$
$
$
$
194
$
1,394
$
$
633
74
Table of Contents
2006
2005
$
163,230
$
132,092
10,572
8,231
7,214
6,521
1,394
2,310
2,299
(188
)
(238
)
(10,807
)
25,231
(3,370
)
(3,460
)
7,620
(7,446
)
$
177,975
$
163,230
$
108,091
$
89,277
12,100
18,268
11,228
6,723
2,310
2,299
(188
)
(238
)
(3,370
)
(3,460
)
5,773
(4,778
)
$
135,944
$
108,091
$
(42,031
)
$
(55,139
)
2,404
726
(19
)
26
25,131
41,153
25
137
$
(14,490
)
$
(13,097
)
$
(21,698
)
$
(22,580
)
25
149
7,183
9,334
$
(14,490
)
$
(13,097
)
$
(2,151
)
$
3,785
75
Table of Contents
2006
2005
4.79
%
4.36
%
3.70
%
3.61
%
6.71
%
6.32
%
$
7,497
$
2,598
$
2,544
$
2,612
$
2,003
$
4.500
$
25,988
2006
Strategic Target
66.39
%
67.20
%
28.16
%
28.29
%
0.57
%
0.09
%
4.66
%
4.21
%
0.22
%
0.21
%
100.00
%
100.00
%
76
Table of Contents
15.
Income
Taxes
2006
2005
2004
35.0
%
35.0
%
35.0
%
$
231,838
$
205,692
$
256,458
(83,987
)
(79,131
)
(88,733
)
48,688
(35,158
)
7,150
937
437
1,424
(1,513
)
(10,982
)
(8,600
)
207
988
1,361
(45
)
72
1,382
61
16
$
113,661
$
172,903
$
161,998
2006
2005
2004
$
201,987
$
96,745
$
184,485
460,408
490,945
548,251
$
662,395
$
587,690
$
732,736
2006
2005
2004
$
98,072
$
85,760
$
51,934
42,748
69,912
80,942
1,295
2,627
2,191
$
142,115
$
158,299
$
135,067
$
(22,619
)
$
14,480
$
29,981
(5,835
)
124
(3,050
)
$
(28,454
)
$
14,604
$
26,931
77
Table of Contents
2006
2005
$
30,302
$
32,315
20,696
19,124
23,833
32,495
42,583
42,196
4,164
10,265
40,704
14,322
6,896
4,862
5,559
188,362
141,954
(42,583
)
(42,196
)
145,779
99,758
920
(1,981
)
(3,414
)
(674
)
(3,414
)
(1,735
)
$
142,365
$
98,023
78
Table of Contents
16.
Related
Party Transactions
17.
Gain on
Sale of Product Line
18.
Subsequent
Events
79
Table of Contents
80
Table of Contents
4Q06
3Q06
2Q06
1Q06
4Q05
3Q05
2Q05
1Q05
644,342
663,660
643,872
621,302
622,130
582,416
603,726
580,536
269,770
273,550
263,201
260,515
259,455
244,178
257,327
245,008
374,572
390,110
380,671
360,787
362,675
338,238
346,399
335,528
58
%
59
%
59
%
58
%
58
%
58
%
57
%
58
%
137,550
136,061
131,848
131,288
123,704
119,217
126,642
127,534
100,710
99,663
97,432
96,281
84,715
84,407
85,813
83,341
16,211
5,500
777
1,013
31,480
255,248
241,224
229,280
228,582
239,899
203,624
212,455
210,875
40
%
36
%
36
%
37
%
39
%
35
%
35
%
36
%
119,324
148,886
151,391
132,205
122,776
134,614
133,944
124,653
19
%
22
%
24
%
21
%
20
%
23
%
22
%
22
%
17
4
21
10
5
10
12
(24,301
)
(26,716
)
(25,895
)
(23,257
)
(21,285
)
(19,156
)
(16,684
)
(14,563
)
(211
)
435
(13,351
)
2,655
(610
)
94
(94
)
568
(24,495
)
(26,277
)
(39,225
)
(20,592
)
(21,890
)
(19,062
)
(16,768
)
(13,983
)
143,819
175,163
190,616
152,797
144,666
153,676
150,712
138,636
22
%
26
%
30
%
25
%
23
%
26
%
25
%
24
%
6,148
30,478
44,795
32,240
76,325
32,272
33,113
31,193
748
138,419
144,685
145,821
120,557
68,341
121,404
117,599
107,443
22
%
22
%
23
%
19
%
11
%
21
%
19
%
19
%
0.40
0 .40
0.40
0 .33
0.18
0 .33
0.32
0.29
0 .39
0.39
0.39
0.32
0.18
0.32
0.31
0.28
346,803
357,887
364,225
366,135
369,945
370,985
370,674
375,561
357,164
369,542
376,811
380,337
380,607
382,830
382,337
388,107
0.16
0.16
0.12
0.12
0.10
0.10
0.06
0.06
81
Table of Contents
ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS
AND PROCEDURES
Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions
of the assets of the company;
Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made
only in accordance with authorizations of management and
directors of the company; and
Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the
companys assets that could have a material effect on the
financial statements.
82
Table of Contents
83
Table of Contents
ITEM 9B.
OTHER
INFORMATION
84
Table of Contents
ITEM 10.
DIRECTORS
AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11.
EXECUTIVE
COMPENSATION
ITEM 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
ITEM 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 14.
PRINCIPAL
ACCOUNTING FEES AND SERVICES
85
Table of Contents
ITEM 15.
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
(a)
The
following are filed as part of this Annual Report on
Form 10-K:
1.
Financial
Statements
Consolidated Statements of Income for the years ended
October 28, 2006, October 29, 2005 and
October 30, 2004
Consolidated Balance Sheets as of October 28, 2006 and
October 29, 2005
Consolidated Statements of Shareholders Equity for the
years ended October 28, 2006, October 29, 2005 and
October 30, 2004
Consolidated Statements of Comprehensive Income for the years
ended October 28, 2006, October 29, 2005 and
October 30, 2004
Consolidated Statements of Cash Flows for the years ended
October 28, 2006, October 29, 2005 and
October 30, 2004
(b)
Exhibits
(c)
Financial
Statement Schedules
86
Table of Contents
87
Table of Contents
Balance at
|
Additions
|
Balance at
|
||||||||||||||
Beginning of
|
Charged to
|
End of
|
||||||||||||||
Description
|
Period | Income Statement | Deductions | Period | ||||||||||||
Accounts Receivable Reserves
and Allowances:
|
||||||||||||||||
Year ended October 30, 2004
|
$ | 2,728 | $ | 9,575 | $ | 7,335 | $ | 4,968 | ||||||||
Year ended October 29, 2005
|
$ | 4,968 | $ | 4,421 | $ | 5,950 | $ | 3,439 | ||||||||
Year ended October 28, 2006
|
$ | 3,439 | $ | 3,872 | $ | 4,358 | $ | 2,953 | ||||||||
88
90
By:
Chairman of the Board
November 20, 2006
President,
Chief Executive Officer
and Director (Principal Executive Officer)
November 20, 2006
Vice President-Finance
and Chief Financial Officer
(Principal Financial and Accounting Officer)
November 20, 2006
Director
November 20, 2006
Director
November 20, 2006
Director
November 20, 2006
Director
November 20, 2006
Director
November 20, 2006
Director
November 20, 2006
89
Table of Contents
Director
November 20, 2006
Director
November 20, 2006
Table of Contents
Exhibit
3
.1
Restated Articles of Organization
of Analog Devices, Inc., as amended, filed as an exhibit to the
Companys Quarterly Report on
Form 10-Q
(File
No. 1-7819)
for the quarterly period ended May 1, 2004 as filed with
the Commission on May 18, 2004 and incorporated herein by
reference.
3
.2
Amended and Restated By-Laws of
Analog Devices, Inc., filed as an exhibit to the Companys
Current Report on
Form 8-K
(File
No. 1-7819),
as filed with the Commission on December 13, 2004 and
incorporated herein by reference.
*10
.1
Analog Devices, Inc. Amended and
Restated Deferred Compensation Plan, filed as an exhibit to the
Companys Quarterly Report on
Form 10-Q
(File
No. 1-7819)
for the quarterly period ended January 28, 2006 as filed
with the Commission on February 15, 2006 and incorporated
herein by reference.
*10
.2
Trust Agreement for Deferred
Compensation Plan dated as of October 1, 2003 between
Analog Devices, Inc. and Fidelity Management Trust Company filed
as an exhibit to the Companys Annual Report on
Form 10-K
for the fiscal year ended November 1, 2003 (File
No. 1-7819)
as filed with the Commission on December 23, 2003 and
incorporated herein by reference.
*10
.3
First Amendment to
Trust Agreement for Deferred Compensation Plan between
Analog Devices, Inc. and Fidelity Management Trust Company dated
as of January 1, 2005.
*10
.4
Restated 1988 Stock Option Plan of
Analog Devices, Inc., filed as an exhibit to the Companys
Quarterly Report on
Form 10-Q
for the fiscal quarter ended May 3, 1997 (File
No. 1-7819)
as filed with the Commission on June 17, 1997 and
incorporated herein by reference.
*10
.5
1994 Director Option Plan of
Analog Devices, Inc., as amended, filed as an exhibit to the
Companys
Form 10-K
for the fiscal year ended November 2, 2002 (File
No. 1-7819)
as filed with the Commission on January 29, 2003 and
incorporated herein by reference.
*10
.6
1998 Stock Option Plan of Analog
Devices Inc., as amended, filed as an exhibit to the
Companys
Form 10-K
for the fiscal year ended November 2, 2002 (File
No. 1-7819)
as filed with the Commission on January 29, 2003 and
incorporated herein by reference.
10
.7
Analog Devices, Inc. 2001
Broad-Based Stock Option Plan, as amended, filed as an exhibit
to the Companys
Form 10-K
for the fiscal year ended November 2, 2002 (File
No. 1-7819)
as filed with the Commission on January 29, 2003 and
incorporated herein by reference.
*10
.8
2006 Stock Incentive Plan of
Analog Devices, Inc., incorporated herein by reference to
Appendix A of the Companys Definitive Proxy Statement
on Schedule 14A filed with the Commission on
February 8, 2006 (File
No. 1-7819).
*10
.9
Amendment No. 1 to 2006 Stock
Incentive Plan of Analog Devices, Inc..
*10
.10
Form of Confirming Memorandum for
Grants of Non-Qualified Stock Options to Employees for usage
under the Registrants 2006 Stock Incentive Plan, filed as
an exhibit to the Companys Current Report on
Form 8-K
(File
No. 1-7819),
as filed with the Commission on September 25, 2006 and
incorporated herein by reference.
*10
.11
Form of Restricted Stock Agreement
for usage under the Registrants 2006 Stock Incentive Plan,
filed as an exhibit to the Companys Current Report on
Form 8-K
(File
No. 1-7819),
as filed with the Commission on September 25, 2006 and
incorporated herein by reference.
*10
.12
Form of Restricted Stock Unit
Confirming Memorandum for usage under the Registrants 2006
Stock Incentive Plan, filed as an exhibit to the Companys
Current Report on
Form 8-K
(File
No. 1-7819),
as filed with the Commission on September 25, 2006 and
incorporated herein by reference.
*10
.13
Analog Devices BV (Ireland)
Employee Stock Option Program, as amended, filed as an exhibit
to the Companys
Form 10-K
for the fiscal year ended November 2, 2002 (File
No. 1-7819)
as filed with the Commission on January 29, 2003 and
incorporated herein by reference.
10
.14
BCO Technologies plc Unapproved
Share Option Scheme, filed as an exhibit to the Companys
Registration Statement on
Form S-8
(File
No. 333-50092)
as filed with the Commission on November 16, 2000 and
incorporated herein by reference.
10
.15
BCO Technologies plc Approved
Share Option Scheme, filed as an exhibit to the Companys
Registration Statement on
Form S-8
(File
No. 333-50092)
as filed with the Commission on November 16, 2000 and
incorporated herein by reference.
10
.16
ChipLogic, Inc. Amended and
Restated 1998 Stock Plan, filed as an exhibit to the
Companys Registration Statement on
Form S-8
(File
No. 333-53314)
as filed with the Commission on January 5, 2001 and
incorporated herein by reference.
Table of Contents
Exhibit
10
.17
Staccato Systems, Inc. 1998 Stock
Plan, filed as an exhibit to the Companys Registration
Statement on
Form S-8
(File
No. 333-53828)
as filed with the Commission on January 17, 2001 and
incorporated herein by reference.
10
.18
Various individual stock
restriction and similar agreements between the registrant and
employees thereof relating to ChipLogic, Inc., filed as an
exhibit to the Companys Registration Statement on
Form S-8
(File
No. 333-57444)
as filed with the Commission on March 22, 2001, as amended
by Amendment No. 1 filed as an exhibit to the
Companys Post-Effective Amendment to Registration
Statement on
Form S-8
(File
No. 333-57444)
as filed with the Commission on March 23, 2001 and
incorporated herein by reference.
*10
.19
Employment Agreement dated
November 14, 2005 between Jerald G. Fishman and Analog
Devices, Inc., filed as an exhibit to the Companys Current
Report on
Form 8-K
(File
No. 1-7819)
as filed with the Commission on November 15, 2005 and
incorporated herein by reference.
*10
.20
Letter Agreement between Analog
Devices Inc. and Jerald G. Fishman dated June 21, 2000
relating to acceleration of stock options upon the occurrence of
certain events, filed as an exhibit to the Companys Annual
Report on
Form 10-K
for the fiscal year ended October 28, 2000 (File
No. 1-7819)
as filed with the Commission on January 26, 2001 and
incorporated herein by reference.
*10
.21
Description of Executive
Performance Bonus Plan for fiscal year 2006, incorporated herein
by reference to Item 1.01 in the Companys Current
Report on
Form 8-K
(File
No. 1-7819)
filed January 25, 2006.
*10
.22
Form of Employee Retention
Agreement, as amended, filed as an exhibit to the Companys
Annual Report on
Form 10-K
for the fiscal year ended November 1, 1997 (File
No. 1-7819)
as filed with the Commission on January 28, 1998 and
incorporated herein by reference.
*10
.23
Employee Change in Control
Severance Policy of Analog Devices, Inc., as amended, filed as
an exhibit to the Companys Annual Report on
Form 10-K
for the fiscal year ended October 30, 1999 (File
No. 1-7819)
as filed with the Commission on January 28, 2000 and
incorporated herein by reference.
*10
.24
Senior Management Change in
Control Severance Policy of Analog Devices, Inc., as amended,
filed as an exhibit to the Companys Annual Report on
Form 10-K
for the fiscal year ended October 30, 1999 (File
No. 1-7819)
as filed with the Commission on January 28, 2000 and
incorporated herein by reference.
10
.25
Amended and Restated Lease
Agreement dated May 1, 1992 between Analog Devices, Inc.
and the trustees of Everett Street Trust relating to the
premises at 3 Technology Way, Norwood, Massachusetts, filed as
an exhibit to the Companys Annual Report on
Form 10-K
for the fiscal year ended November 1, 1997 (File
No. 1-7819)
as filed with the Commission on January 28, 1998 and
incorporated herein by reference.
10
.26
Guaranty dated as of May 1,
1994 between Analog Devices, Inc. and Metropolitan Life
Insurance Company relating to the premises at 3 Technology Way,
Norwood, Massachusetts, filed as an exhibit to the
Companys Annual Report on
Form 10-K
for the fiscal year ended October 30, 1999 (File
No. 1-7819)
as filed with the Commission on January 28, 2000 and
incorporated herein by reference.
10
.27
Letter Agreement dated as of
May 18, 1994 between Analog Devices, Inc. and Metropolitan
Life Insurance Company relating to the premises at 3 Technology
Way, Norwood, Massachusetts, filed as an exhibit to the
Companys Annual Report on
Form 10-K
for the fiscal year ended October 30, 1999 (File
No. 1-7819)
as filed with the Commission on January 28, 2000 and
incorporated herein by reference.
10
.28
Reimbursement Agreement dated
May 18, 1992 between Analog Devices, Inc. and the trustees
of Everett Street Trust, filed as an exhibit to the
Companys Annual Report on
Form 10-K
for the fiscal year ended November 1, 1997 (File
No. 1-7819)
as filed with the Commission on January 28, 1998 and
incorporated herein by reference.
10
.29
Lease Agreement dated
August 8, 1990 between Precision Monolithics, Inc. and
Bourns, Inc. relating to the premises at 1525 Comstock Road,
Santa Clara, California, filed as an exhibit to the
Companys Annual Report on
Form 10-K
for the fiscal year ended November 3, 2001 (File
No. 1-7819)
as filed with the Commission on January 28, 2002 and
incorporated herein by reference.
Table of Contents
Exhibit
10
.30
Lease Amendment dated May 1,
1996 to the Lease Agreement dated August 8, 1990 between
Analog Devices, Inc. and Bourns, Inc., relating to premises
located at 1525 Comstock Road, Santa Clara, California,
filed as an exhibit to the Companys Annual Report on
Form 10-K
for the fiscal year ended November 3, 2001 (File
No. 1-7819)
as filed with the Commission on January 28, 2002 and
incorporated herein by reference.
10
.31
Lease Agreement dated
June 16, 1995 between Analog Devices, Inc. and Ferrari
Brothers, relating to the premises at 610 Weddell Drive,
Sunnyvale, California, filed as an exhibit to the Companys
Annual Report on
Form 10-K
for the fiscal year ended November 3, 2001 (File
No. 1-7819)
as filed with the Commission on January 28, 2002 and
incorporated herein by reference.
10
.32
First amendment dated
March 1, 1996 to the Lease Agreement dated June 16,
1995 between Analog Devices, Inc. and Ferrari Brothers, relating
to premises located at 610 Weddell Drive, Sunnyvale, California,
filed as an exhibit to the Companys Annual Report on
Form 10-K
for the fiscal year ended November 3, 2001 (File
No. 1-7819)
as filed with the Commission on January 28, 2002 and
incorporated herein by reference.
10
.33
Second amendment dated
March 21, 2000 to the Lease Agreement dated June 16,
1995 between Analog Devices, Inc. and Ferrari Brothers, relating
to premises located at 610 Weddell Drive, Sunnyvale, California,
filed as an exhibit to the Companys Annual Report on
Form 10-K
for the fiscal year ended November 3, 2001 (File
No. 1-7819)
as filed with the Commission on January 28, 2002 and
incorporated herein by reference.
10
.34
Lease Agreement dated
February 8, 1996 between Analog Devices, Inc. and
Massachusetts Institute of Technology, relating to premises
located at 21 Osborn Street, Cambridge, Massachusetts, filed as
an exhibit to the Companys Annual Report on
Form 10-K
for the fiscal year ended November 3, 2001 (File
No. 1-7819)
as filed with the Commission on January 28, 2002 and
incorporated herein by reference.
10
.35
First amendment dated
December 13, 1996 to Lease Agreement dated February 8,
1996 between Analog Devices, Inc. and Massachusetts Institute of
Technology, relating to premises located at 21 Osborn Street,
Cambridge, Massachusetts.
10
.36
Second Amendment dated
December 20, 1996 to Lease Agreement dated February 8,
1996 between Analog Devices, Inc. and Massachusetts Institute of
Technology, relating to premises located at 21 Osborn Street,
Cambridge, Massachusetts.
10
.37
Third Amendment dated May 27,
1997 to Lease Agreement dated February 8, 1996 between
Analog Devices, Inc. and Massachusetts Institute of Technology,
relating to premises located at 21 Osborn Street, Cambridge,
Massachusetts.
10
.38
Lease Agreement dated
November 14, 1997, as amended, between Analog Devices, Inc.
and Liberty Property Limited Partnership, relating to premises
located at 7736 McCloud Road, Greensboro, North Carolina.
14
Analog Devices, Inc. Code of
Business Conduct and Ethics, filed as an exhibit to the
Companys
Form 10-K
for the fiscal year ended November 1, 2003 (File
No. 1-7819)
as filed with the Commission on January 29, 2003 and
incorporated herein by reference.
21
Subsidiaries of the Company.
23
Consent of Ernst & Young
LLP, Independent Registered Public Accounting Firm.
31
.1
Certification Pursuant to
Rule 13a-14(a)
and
15d-14(a)
of
the Exchange Act, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
31
.2
Certification Pursuant to
Rule 13a-14(a)
and
15d-14(a)
of
the Exchange Act, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
32
.1
Certification Pursuant to
18 U.S.C. Section 1350 (Chief Executive Officer)
32
.2
Certification Pursuant to
18 U.S.C. Section 1350 (Chief Financial Officer)
Filed herewith.
*
Management contracts and compensatory plan or arrangements
required to be filed as an Exhibit pursuant to Item 15(b)
of
Form 10-K.
EXHIBIT 10.3
FIRST AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
ANALOG DEVICES, INC.
THIS FIRST AMENDMENT, dated and effective as of the first day of January, 2005, by and between Fidelity Management Trust Company (the "Trustee") and Analog Devices, Inc. (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a Trust Agreement dated October 1, 2003 with regard to the Analog Devices, Inc. Deferred Compensation Plan (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said Trust Agreement as provided for in Section 14 thereof;
NOW THEREFORE, in consideration of the above premises, the Trustee and the Sponsor hereby amend the Trust Agreement by:
(1) Deleting the seventh "Whereas" clause, which reads as follows:
WHEREAS, the Sponsor (the "Administrator") is the administrator of the Plan; and
(2) Amending and restating the eighth "Whereas" clause to read as follows:
WHEREAS, the Trustee is willing to perform recordkeeping and administrative services for the Plan if the services are purely ministerial in nature and are provided within a framework of plan provisions, guidelines and interpretations conveyed in writing to the Trustee by the Administrator, as hereinafter defined.
(3) Amending and restating paragraph 1(a) to read as follows:
(a) "Administrator" shall mean the Sponsor.
(4) Replacing the term "Named Fiduciary" in the fourth sentence of Section 5(d) with "Sponsor".
(5) Restating the definition of "Change in Control" in Section 16(a), in its entirety, as follows:
(a) Definition. A "Change in Control" means a Change in Control Event as defined in the Plan document, which is intended to be consistent with Internal Revenue Service Notice 2005-1, as modified from time to time.
Other than the revisions stated above, the remaining provisions of the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this First Amendment to be executed by their duly authorized officers effective as of the day and year first above written.
ANALOG DEVICES, INC. FIDELITY MANAGEMENT TRUST COMPANY By: /s/ Joseph E. McDonough By: /s/ illegible --------------------------------- ------------------------------------ Joseph E. McDonough Date 2/28/05 Its Authorized Signatory Date 3/7/05 V.P., Finance & CFO |
EXHIBIT 10.9
ANALOG DEVICES, INC.
FIRST AMENDMENT TO THE 2006 STOCK INCENTIVE PLAN
The Analog Devices, Inc. 2006 Stock Incentive Plan, pursuant to Section 13(d) thereof, is hereby amended as follows:
VOTED: That, the Corporation hereby adopts and approves an amendment to the Corporation's 2006 Stock Incentive Plan in substantially the form attached hereto as Exhibit E (such amendment referred to as "Amended Appendix A - Israel") to permit the Corporation's Israeli employees (specifically, employees, advisors and consultants of Analog Devices (Israel) Ltd. and Analog Development (Israel) 1999 Ltd.) to qualify for certain tax benefits under the tax laws of the country of Israel; and further that the CHAIRMAN OF THE BOARD, THE PRESIDENT AND CHIEF EXECUTIVE OFFICER, VICE PRESIDENT, FINANCE AND CHIEF FINANCIAL OFFICER, AND THE TREASURER OF THE CORPORATION, each of them acting singly, are hereby authorized and empowered to execute any document necessary or proper to give effect to "Amended Appendix A - Israel" under the laws and regulations of the country of Israel; and further, the aforementioned officers be, and each acting singly hereby is, authorized in the name and on behalf of the Corporation to sign, acknowledge, swear to and deliver any affidavit, agreement or other documents, each in such form as the authorized person or persons executing the same shall determine to be in the best interest of the Corporation to give proper effect to such "Amended Appendix A - Israel", the execution of any such documents to be sufficient evidence of such determination; and that the Secretary of the Corporation be authorized to attest, co-sign and affix the Corporate seal to such documents.
Approved by the Board of Directors on March 14, 2006.
ANALOG DEVICES INC.
AMENDED APPENDIX A - ISRAEL
TO THE 2006 STOCK INCENTIVE PLAN
A. 1. GENERAL
1.1. This appendix (the "APPENDIX") shall apply only to optionees who are employees/advisors/consultants of one of the two following companies, Analog Devices (Israel) Ltd., Analog Development (Israel) 1996 Ltd, and are residents of the state of Israel for the payment of tax. The provisions specified hereunder shall form an integral part of the 2006 Stock Incentive Plan of Analog Devices Inc. (hereinafter: the "PLAN"), which applies to the issuance of options to purchase Common Stock of Analog Devices Inc. (hereinafter: the "COMPANY"). According to the Plan, options to purchase the Company's Common Stock may be issued to employees, directors and consultants and advisors of the Company or its Affiliates
1.2 This Appendix is effective with respect to Options granted as of March 14, 2006 and shall comply with Amendment no. 132 of the Israeli Tax Ordinance.
1.3. This Appendix is to be read as a continuation of the Plan and only modifies Options granted to Israeli optionees so that they comply with the requirements set by the Israeli law in general, and in particular with the provisions of Section 102 (as specified herein), as may be amended or replaced from time to time. For the avoidance of doubt, this Appendix does not add to or modify the Plan in respect of any other category of optionees.
1.4. The Plan and this Appendix are complimentary to each other and shall be deemed as one. In any case of contradiction, whether explicit or implied, between the provisions of this Appendix and the Plan, the provisions set out in the Appendix shall prevail.
1.5. Any capitalized terms not specifically defined in this Appendix shall be construed according to the interpretation given to it in the Plan.
B. 2. DEFINITIONS
2.1 "AFFILIATE" means any "employing company" within the meaning of Section 102(a) of the Ordinance. 2.2 "APPROVED 102 OPTION" means an Option granted pursuant to Section 102(b) of the Ordinance and held in trust by a Trustee for the benefit of the optionee. 2.3 "CAPITAL GAIN OPTION (CGO)" means an Approved 102 Option elected and designated by the Company to qualify under the capital gain tax treatment in accordance with the provisions of Section 102(b)(2) of the Ordinance. 2.4 "CONTROLLING SHAREHOLDER" shall have the meaning ascribed to it in Section 32(9) of the Ordinance. 2.5 "EMPLOYEE" means a person who is employed by the Company or its Affiliates, including an individual who is serving as a director or an office holder, but excluding any Controlling Shareholder. 2.6 "ITA" means the Israeli Tax Authorities. 2.7 "NON-EMPLOYEE" means a consultant, adviser, service provider, Controlling Shareholder or any other person who is not an Employee. 2.8 "ORDINARY INCOME OPTION (OIO)" means an Approved 102 Option elected and designated by the Company to qualify under the ordinary income tax treatment in accordance with the provisions of Section 102(b)(1) of the Ordinance. 2.9 "OPTION" means an option to purchase one or more Common Stock of the Company pursuant to the Plan. 2.10 "102 OPTION" means any Option granted to Employees pursuant to Section 102 of the Ordinance. 2.11 "3(i) OPTION" means an Option granted pursuant to Section 3(i) of the Ordinance to any person who is a Non- Employee. 2.12 "OPTION AGREEMENT" means the share option agreement between the Company and a optionee that sets out the terms and conditions of an Option. 2.13 "ORDINANCE" means the 1961 Israeli Income Tax Ordinance [New Version] 1961 as now in effect or as hereafter amended. 2.14 "SECTION 102" means section 102 of the Ordinance and any regulations, rules, orders or procedures promulgated there under as now in effect or as hereafter amended. |
2.15 "TRUSTEE" means any individual or entity appointed by the Company to serve as a trustee and approved by the ITA, all in accordance with the provisions of Section 102(a) of the Ordinance. 2.16 "UNAPPROVED 102 OPTION" means an Option granted pursuant to Section 102(c) of the Ordinance and not held in trust by a Trustee. C. 3. ISSUANCE OF OPTIONS 3.1 The persons eligible for participation in the Plan as optionees shall include any Employees and/or Non-Employees of the Company or of any Affiliate; provided, however, that (i) Employees may only be granted 102 Options; and (ii) Non-Employees and/or Controlling Shareholders may only be granted 3(i) Options 3.2 The Company may designate Options granted to Employees pursuant to Section 102 as Unapproved 102 Options or Approved 102 Options. 3.3 The grant of Approved 102 Options shall be made under this Appendix adopted by the Board, and shall be conditioned upon the approval of this Appendix by the ITA. 3.4 Approved 102 Options may either be classified as Capital Gain Options ("CGOs") or Ordinary Income Options ("OIOs"). 3.5 No Approved 102 Options may be granted under this Appendix to any eligible Employee, unless and until, the Company's election of the type of Approved 102 Options as CGI or OIO granted to Employees (the "ELECTION"), is appropriately filed with the ITA. Such Election shall become effective beginning the first Grant Date of an Approved 102 Option under this Appendix and shall remain in effect until the end of the year following the year during which the Company first granted Approved 102 Options. The Election shall obligate the Company to grant only the type of Approved 102 Option it has elected, and shall apply to all optionees who were granted Approved 102 Options during the period indicated herein, all in accordance with the provisions of Section 102(g) of the Ordinance. For the avoidance of doubt, such Election shall not prevent the Company from granting Unapproved 102 Options simultaneously. 3.6 All Approved 102 Options must be held in trust by a Trustee, as described in Section 4_below. 3.7 For the avoidance of doubt, the designation of Unapproved 102 Options and Approved 102 Options shall be subject to the terms and conditions set forth in Section 102. |
D. 4. TRUSTEE 4.1 Approved 102 Options which shall be granted under this Appendix and/or any Common Stock allocated or issued upon exercise of such Approved 102 Options and/or other shares received subsequently following any realization of rights, including bonus shares, shall be allocated or issued to the Trustee and held for the benefit of the optionees for such period of time as required by Section 102 or any regulations, rules or orders or procedures promulgated there under (the "Holding Period"). In the case the requirements for Approved 102 Options are not met, then the Approved 102 Options shall be regarded as Unapproved 102 Options, all in accordance with the provisions of Section 102. 4.2 Notwithstanding anything to the contrary, the Trustee shall not release any Common Stock allocated or issued upon exercise of Approved 102 Options prior to the full payment of the optionee 's tax liabilities arising from Approved 102 Options which were granted to him and/or any Common Stock allocated or issued upon exercise of such Options. 4.3 Upon receipt of Approved 102 Option, the optionee will sign an undertaking to release the Trustee from any liability in respect of any action or decision duly taken and bona fide executed in relation with this Appendix, or any Approved 102 Option or Ordinary Share granted to him there under. 4.4 With respect to any Approved 102 Option, subject to the provisions of Section 102 and any rules or regulation or orders or procedures promulgated thereunder, an Optionee shall not sell or release from trust any Share received upon the exercise of an Approved 102 Option and/or any share received subsequently following any realization of rights, including without limitation, bonus shares, until the lapse of the Holding Period required under Section 102 of the Ordinance. Notwithstanding the above, if any such sale or release occurs during the Holding Period, the sanctions under Section 102 of the Ordinance and under any rules or regulation or orders or procedures promulgated thereunder shall apply to and shall be borne by such Optionee. E. 5. THE OPTIONS |
The terms and conditions upon which the Options shall be issued and exercised, shall be as specified in the Option Agreement to be executed pursuant to the Plan and to this Appendix. Each Option Agreement shall state, inter alia, the number of Common Stock to which the Option relates, the vesting provisions and the exercise price.
6. OPTION EXERCISE PRICE
Solely for the purpose of determining the tax liability pursuant to Section 102(b)(3) of the Ordinance, if at the date of grant the Company's shares are listed on any established stock exchange or a national market system or if the Company's shares will be registered for trading
within ninety (90) days following the date of grant of the CGOs, the option exercise price of the Common Stock at the date of grant shall be determined in accordance with the average value of the Company's New York Stock Exchange closing share price on the thirty (30) trading days preceding the date of grant or on the thirty (30) trading days following the date of registration for trading, as the case may be. In no case, however, shall the option exercise price be less than the closing share price of the Company's stock on the date of grant.
F. 7. EXERCISE OF OPTIONS
1. Options shall be exercised by the optionee by giving notice to the
Company and/or to any third party designated by the Company (the
"REPRESENTATIVE"), in such form and method as may be determined by the Company
and, when applicable, by the Trustee, in accordance with the requirements of
Section 102, which exercise shall be effective upon receipt of such notice by
the Company and/or the Representative and the payment of the exercise price for
the number of Common Stock with respect to which the option is being exercised,
at the Company's or the Representative's principal office. The notice shall
specify the number of Common Stock with respect to which the option is being
exercised.
G. 8. ASSIGNABILITY AND SALE OF OPTIONS
8.1. Notwithstanding any other provision of the Plan, no Option or any right with respect thereto, purchasable hereunder, whether fully paid or not, shall be assignable, transferable or given as collateral or any right with respect to them given to any third party whatsoever, and during the lifetime of the optionee each and all of such optionee's rights to purchase Common Stock hereunder shall be exercisable only by the optionee.
Any such action made directly or indirectly, for an immediate validation or for a future one, shall be void.
8.2 As long as Options or Common Stock purchased pursuant to thereto are held by the Trustee on behalf of the optionee, all rights of the optionee over the shares are personal, can not be transferred, assigned, pledged or mortgaged, other than by will or laws of descent and distribution.
H. 9. INTEGRATION OF SECTION 102 AND TAX ASSESSING OFFICER'S PERMIT
9.1. With regards to Approved 102 Options, the provisions of the Plan and/or the Appendix and/or the Option Agreement shall be subject to the provisions of Section 102 and the Tax Assessing Officer's permit, and the said provisions and permit shall be deemed an integral part of the Plan and of the Appendix and of the Option Agreement.
9.2. Any provision of Section 102 and/or the said permit which is necessary in order to receive and/or to keep any tax benefit pursuant to Section 102, which is not expressly specified in the Plan or the Appendix or the Option Agreement, shall be considered binding upon the Company and the optionees.
I. 10. DIVIDEND
With respect to all Shares (but excluding, for avoidance of any doubt, any unexercised Options) allocated or issued upon the exercise of Options purchased by the Optionee and held by the Optionee or by the Trustee, as the case may be, the Optionee shall be entitled to receive dividends in accordance with the quantity of such Shares, subject to the provisions of the Company's Incorporation Documents (and all amendments thereto) and subject to any applicable taxation on distribution of dividends, and when applicable subject to the provisions of Section 102 and the rules, regulations or orders promulgated thereunder.
J. 11. TAX CONSEQUENCES
11.1 Any tax consequences arising from the grant or exercise of any Option, from the payment for Common Stock covered thereby or from any other event or act (of the Company, and/or its Affiliates, and the Trustee or the optionee), hereunder, shall be borne solely by the optionee. The Company and/or its Affiliates, and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the optionee shall agree to indemnify the Company and/or its Affiliates and/or the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the optionee. 11.2 The Company and/or, when applicable, the Trustee shall not be required to release any share certificate to an optionee until all required payments have been fully made. |
* * *
Exhibit 10.35
AMENDMENT # 1 TO THE LEASE BETWEEN ANALOG DEVICES, INC. ("LESSEE") AND
MASSACHUSETTS INSTITUTE OF TECHNOLOGY ("LESSOR") DATED FEBRUARY 8, 1996
WHEREAS, Analog Devices, Inc. ("Analog") and Massachusetts Institute of Technology ("MIT") entered into a lease agreement (the "Lease") dated February 8, 1996 for the premises, as defined in Section 1.1 of the Lease, at 21 Osborn Street in Cambridge, Massachusetts; and
WHEREAS, Analog and MIT wish to amend the Lease.
NOW, THEREFORE, the Lease is hereby amended by replacing the second sentence of
Section 1.3 with the following sentence, effective as of December 13, 1996:
"This option may be exercised by the Lessee by notice thereof to Lessor, dispatched not less than thirty (30) days prior to the date on which Lessee will take occupancy of the additional space, and upon the exercise of this option, the Premises shall include such space."
Executed as of the 13th day of December, 1996.
ANALOG DEVICES, INC. MASSACHUSETTS INSTITUTE OF TECHNOLOGY By: By: --------------------------------- ------------------------------------ Name: Name: ------------------------------- ---------------------------------- Title: Title: ------------------------------ --------------------------------- |
Exhibit 10.36
SECOND AMENDMENT TO LEASE
Agreement made as of the 20th day of December 1996 between MASSACHUSETTS
INSTITUTE OF TECHNOLOGY ("Lessor") and ANALOG DEVICES, INC. ("Lessee").
WHEREAS: Lessor is the lessor and Lessee the lessee under a lease agreement (the "Lease") dated February 8, 1995 with respect to the basement, first and second floors of the building at 21 Osborn Street, Cambridge, Massachusetts (the "Building");
WHEREAS: Lessee holds an option ("Expansion Option") to expand the leased premises (the "Premises") under the Lease to include the third and fourth floors of the Building on terms set forth in the Lease;
WHEREAS: Lessee desires to exercise the Expansion Option with respect to both the third and fourth floors but on terms and conditions different from those set forth in the Lease; and
WHEREAS: Lessor has agreed to modify the Lease as set forth below:
NOW THEREFORE: the parties agree as follows:
1. Lessee has effectively exercised its Expansion Option to lease the third and fourth floors of the Building on the terms and conditions set forth in the Lease as amended hereby.
2. Lessee shall be entitled to take possession of the third floor of the Building on January 7, 1997 and shall be entitled to take possession of the fourth floor of the Building on June 1, 1998.
3. Commencing February 13, 1997, Lessee shall pay all Taxes for the Building and the Land.
4. Lessee shall commence payment of Basic Rent for the third floor of the Building commencing July 1, 1997 and shall commence payment of Basic Rent for the fourth floor of the Building commencing December 1, 1998.
5. Notwithstanding Section 1.3 of the Lease or anything to the contrary set forth in the Lease, except for Lessee's assumption of the responsibility to pay real estate taxes as set forth in paragraph 3 above, the Premises shall not include the fourth floor of the Building until June 1, 1998. Prior to that date, Lessee shall not have the right of access to the fourth floor except as expressly authorized from time to time by Lessor.
6. Except as set forth herein, the terms of the Lease are hereby confirmed to be in full force and effect.
Executed as a sealed instrument as of the date first above written.
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
By: /s/ Philip A. Trussell ------------------------------------ Philip A. Trussell, its Director of Real Estate and Assistant Treasurer |
ANALOG DEVICES, INC.
By: /s/ William A. Martin ------------------------------------ William A. Martin Treasurer |
Exhibit 10.37
THIRD AMENDMENT TO LEASE
Agreement made as of the 27th day of May, 1997 between MASSACHUSETTS
INSTITUTE OF TECHNOLOGY ("Lessor") and ANALOG DEVICES, INC. ("Lessee").
WHEREAS: Lessor is the lessor and Lessee the lessee under a lease agreement (the "Lease") dated February 8, 1995 with respect to the building at 21 Osborn Street, Cambridge, Massachusetts (the "Building") as previously amended;
WHEREAS: Lessee expanded the Leased Premises to include the third and fourth floors of the Building by its exercise of an expansion option on terms set forth in the Lease as modified by prior amendments which enabled the Lessee to defer taking possession of the fourth floor until June 1, 1998 and to defer payment of Basic Rent with respect to that floor until December 1, 1998;
WHEREAS: Lessee desires to take possession of the fourth floor of the Building, effective as of this date, and has agreed that the commencement date for payment of Basic Rent with respect to that floor shall be advanced to December 1, 1997; and
WHEREAS: Lessor has agreed to modify the Lease as set forth below: NOW THEREFORE: the parties agree as follows:
1. Lessee shall be entitled to take possession of the fourth floor of the Building on May 27, 1997.
2. Lessee shall commence payment of Basic Rent for the fourth floor of the Building commencing December 1, 1997.
3. Except as set forth herein, the terms of the Lease as previously amended are hereby confirmed to be in full force and effect.
Executed as a sealed instrument as of the date first above written.
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
By: /s/ Philip A. Trussell ------------------------------------ Philip A. Trussell, its Director of Real Estate and Assistant Treasurer |
ANALOG DEVICES, INC.
By: /s/ William A. Martin ------------------------------------ William A. Martin Treasurer |
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.
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Exhibit 10.38
INDEX
SECTION TITLE PAGE ------- ----- ---- 1. Term & Possession 1 (a) Duration 1 (b) Memoranda 1 2. Rent 1 (a) Minimum Rent 1 (b) Consumer Price Index 2 3. Rent Adjustment Increases in Operating Expenses and Taxes 3 (a) Definitions 3 (b) Share of Operating Expenses and Taxes 6 (c) Operating Expense and Tax Statements 6 (d) Survival After Termination 6 (e) Reduction or Elimination of Operating Expenses Component 7 (f) Essential Capital Improvement 7 (g) Tenant's Proportionate Share 8 (h) Review of Books 8 4. Improvement of the Demised Premises 8 (a) Tenant's Plans 8 (b) Tenant's Improvement Plans 8 (c) Tenant's Work 8 (d) Charges For Work 8 (e) Tenant's Contractor 9 5. Services 10 (a) Water 10 (b) Electric Current 10 (c) HVAC 10 |
INDEX - CONTINUED
(d) Janitorial 11 (e) Elevators 11 6. Quiet Enjoyment 7. Certain Rights Reserved to Landlord 11 8. Estoppel Certificate By Tenant 12 9. Waiver of Certain Claims 13 10. Liability Insurance 13 11. Holding Over 14 12. Assignment and Subletting 14 13. Condition of Premises 16 14. Use of Premises 16 15. Repairs 19 16. Untenantability 19 17. Eminent Domain 20 18. Landlord's Remedies 20 19. Notice and Consents 23 20. Invalidity of Particular Provisions 23 21 Waiver of Benefits 23 22. Miscellaneous Taxes 24 23. Sprinklers 24 24. No Estate in Land 24 |
INDEX - CONTINUED
25. Security Deposit 24 26. Substitute Premises 24 27. Brokerage 25 28. Special Stipulations 25 29. Subordination 27 30. Option to Renew 28 31. Right of First Refusal 28 |
WITNESSETH that ONE TRIAD CENTER ASSOCIATES (the Landlord), a North Carolina Partnership, hereby leases unto ANALOG DEVICES, INC. having its principal place of business at One Triad Center, Greensboro, North Carolina 27409 (the Tenant), and the Tenant accepts from Landlord, the premises containing approximately 23,734 square feet located on the first floor outlined on the floor plans hatched in black and attached hereto as Exhibit A (the "Premises") in the Building known as "One Triad Center" (the "Building"), the Building, together with the land on which it is located and all other improvements thereon being called the Property), for the term, the rent, and subject to the conditions and covenants hereinafter provided.
In Consideration thereof, the parties covenant and agree as follows:
1. Term and Possession
(a) Duration. The term of this Lease shall commence upon the date of execution of this Lease (the "Commencement Date"),. The term shall continue for a period terminating on December 31, 2000, unless extended or sooner terminated as herein provided. During any period of time prior to the commencement date in which Tenant takes full or partial possession of the Premises for the purpose of making its improvements thereto or otherwise, Tenant shall be bound by all the terms and provisions hereof other than the requirement of payment of minimum rent. It is understood and agreed that the Commencement Date and occupancy may be extended to the date of execution of the prior tenant's lease termination agreement.
(b) Memoranda. When the date of commencement of the term of this Lease is established, Landlord and Tenant shall promptly execute and acknowledge a memorandum in form substantially as set forth in Exhibit "B" hereto, containing the information set forth in said Exhibit.
2. Rent
(a) Rent shall accrue and be payable effective January 1, 1998, Rent shall accrue and be payable during the term as follows: minimum annual rent shall be equal to Three Hundred Fifty Thousand Seventy-Six and 50/100 Dollars ($350,076.50) payable in equal monthly installments of Twenty-Nine Thousand One Hundred Seventy Three and 04/100 Dollars ($29,173.04) for a term of January 1, 1998 through June 30, 1998. In addition, Tenant shall pay an additional $.29 per square foot for Operating Expenses and Taxes for the term of January 1, 1998 through December 31, 1998 and thereafter as set forth in Paragraph 3(b) hereof. Beginning July 1, 1998, the minimum annual rent shall be equal to Three Hundred Eighty-Five Thousand Six Hundred Seventy-Seven and 50/100 Dollars ($385,677.50) payable in equal monthly installments of Thirty-Two Thousand One Hundred Thirty-Nine and 79/100 Dollars ($32,139.79). Such minimum annual rent shall be payable in advance, in equal monthly installments of one twelfth (1/12th) of the annual amount, the first monthly installment to be payable upon
the commencement date of the term of this Lease, subject to proration based upon a thirty day month if such commencement date is other than the first day of a month, and subsequent monthly installments to be payable on the first day of each successive month of the term hereof following the first month of such term.
(b) In addition to the rental payable under Section 3 hereof, the minimum annual rental payable hereunder by Tenant shall be increased as of the first day of each lease year commencing July 1, 1399 (the "CPI Increase Date") as set forth below, without duplication.
(i) "Index" - The Index shall mean the index now known as The United States Bureau of Labor Statistics, Department of Labor, Consumer Price Index for All Urban Consumers, United States city average, all items (1982-84 - 100). In the event the foregoing Index shall hereafter be converted or otherwise revised, "Index" shall mean such index or combination of indices as Landlord shall select, from any available indices, for the purposes of this Section. If the said Bureau shall cease publication of indices relating to the foregoing statistical information, "Index" shall mean such index or combination of indices of similar statistical information as Landlord shall select for the purposes of this Section.
(ii) "Base Index" shall mean the Index for the month two (2) months prior to the month in which the term of this Lease shall commence.
(iii) "Anniversary Index" shall mean the Index for the month (the "Anniversary Month") two months prior to the month in which the CPI Increase Date shall occur.
(iv) "Cost of Living Increase" shall mean a fraction, the numerator of which shall be the Index in an Anniversary Month less the Base Index, and the denominator of which shall be the Base Index.
Landlord shall furnish to Tenant, after the Index for each Anniversary
Month is published, a statement setting forth the Base Index, the Index for that
Anniversary Month, and the Cost of Living Increase. If the Index for that
Anniversary Month shall exceed the Base Index, there shall accrue, and be
payable by Tenant on the first day of each calendar month in equal monthly
installments as additional minimum rent, for and with respect to each twelve
month (12) month period on and after the CPI Increase Date, an amount determined
by multiplying the Cost of Living Increase times the minimum annual rental under
Section 2.(a) at the commencement date of this Lease. Should the foregoing
calculations be delayed beyond the CPI Increase Date for any year, on or before
the tenth (10th) day following submission of said statement to Tenant, Tenant
shall pay to Landlord a lump sum equal to one-twelfth (1/12) of said additional
minimum annual rent multiplied by the number of full or partial calendar months
elapsed from said CPI Increase Date to the end of the month in
which the day of payment occurs. On the first day of each succeeding calendar month, Tenant shall pay to Landlord one-twelfth (1/12) of said additional minimum annual rent.
3. Rent Adjustment: Increases in Operating Expenses and Taxes
(a) Definitions. As used in this Paragraph 3, the following terms shall be defined as hereinafter set forth:
(i) "Taxes" shall mean all taxes, assessments, and charges levied upon or with respect to the Property or any personal property of Landlord used in the operation thereof, or Landlord's interest in the Property or such personal property. Taxes shall include, without limitation, all general real property taxes and general and special assessments, charges, fees, or assessments for transit, housing, police, fire, or other governmental services or purported benefits to the Property, service payments in lieu of taxes, and any tax, fee, or excise on the act of entering into this Lease or any other lease of space in the Building, on the use or occupancy of the Building or any part thereof, or on the rent payable under any lease or in connection with the business of renting space in the Building, that are now or hereafter levied or assessed against Landlord by the United States of America, the State of North Carolina, or any political subdivision, public corporation, district, or other political or public entity. Taxes shall also include any other tax, fee, or other excise, however described, that may be levied or assessed as a substitute for or as an addition to, in whole or in part, any other Taxes, whether or not now customary or in the contemplation of the parties on the date of this Lease. Taxes shall not include franchise, transfer, inheritance, or capital stock taxes or income taxes measured by the net income of Landlord from all sources, unless, due to a change in the method of taxation, any such tax is levied or assessed against Landlord as a substitute for or as an addition to, in whole or in part, any other tax that would otherwise constitute a property Tax. Taxes shall also include reasonable legal fees, costs, and disbursements incurred in connection with proceedings to contest, determine, or reduce Taxes.
(ii) "Operating Expenses" shall include all expenses, costs and charges paid or incurred by Landlord for the management, operation, maintenance and repair ("repair" as used in connection with operating expenses shall not include
alterations or other capital expenditures made by Landlord, but shall include the cost of any capital improvements made that were required under any governmental law or regulation that was not applicable to the Premises at the time of delivery of possession of the Premises to Tenant for the benefit of the Premises) of the Land and Building (as a first class office building) and shall include, but not be limited to, the following:
(A) "Labor Costs" (as hereinafter defined) for first class office buildings, for the services of the following classes of employees performing services required in connection with the operation, repair and maintenance of the Building:
(1) the Building superintendent, his assistants and the clerical staff attached to the Building superintendent's office;
(2) window cleaners and miscellaneous handymen;
(3) cleaners and janitors employed in and about the Building for the performance of services;
(4) watchmen and persons engaged in patrolling and protecting the Building;
(5) carpenters, engineers, mechanics, electricians, painters and plumbers engaged in the operation, repair and maintenance of any part of the Building, the sidewalks around the Building and the heating, air-conditioning, ventilating, plumbing, electrical, elevator and other such systems of the Building;
(6) such other personnel employed from time to time in order to properly maintain and operate the Building; and
(7) personnel engaged exclusively in supervision of any of the persons mentioned above in subparagraphs (1) through (6).
(B) The cost of materials and supplies used only in the operation, repair and maintenance of the Building.
(C) The cost of replacement for tools and equipment used on the operation, repair and maintenance of the Building.
(D) The amounts paid to managing agents for the Building employed by Landlord, or for reasonable legal, accounting or other professional fees [necessarily incurred in connection with the operation of the Building].
(E) Amounts charged to Landlord by contractors for services, materials and supplies furnished in connection with the operation, repair and maintenance of any part of the Building and Land, and the heating, air-conditioning, ventilating, plumbing, electrical, elevator and other systems of the Building.
(F) Amounts charged to Landlord by contractors for window cleaning, and cleaning and janitorial services in and about the Building;
(G) Premiums paid by Landlord for All Risk Insurance for the Building, including, without limitation, fire insurance, with such extended coverage, vandalism and malicious, mischief coverage, and rent insurance coverage, of the type and character usually carried by landlords of similar first class buildings and premiums paid for comprehensive general public liability insurance against claims for bodily injury, death or property damage, and if carried by Landlord,
boiler and machinery insurance and war risk insurance, and such other insurance as may from time to time be reasonably required by Landlord to protect Landlord against other insurable hazards, which at the time are commonly insured against in the case of premises similar to the Building.
(H) Water charges and sewer rents.
(I) The cost of utilities necessary for the operation, maintenance and repair of the Building.
(J) The cost of electricity (including with out limitation, fuel adjustment charges) used to operate lighting fixtures, power appliances, machinery, heating, ventilation and air-conditioning equipment and all equipment used in connection with the operation, maintenance and repair of the Building and the offices therein located.
(K) Any other expense or charge which, in accordance with sound accounting and management principles generally accepted with respect to first class buildings in Greensboro, North Carolina, would be construed as an operating expense.
Operating Expenses shall be "net only", and for that purpose shall be reduced by the amounts of any reimbursement, credit, recoupment, discount, or allowance received by Landlord in connection with such expenses.
"Labor Costs" shall mean all expenses incurred by Landlord or on Landlord's behalf which shall be directly related to employment of personnel, including but not limited to, amounts incurred for wages, salaries and other compensation for services, payroll, social security, unemployment and other similar taxes, workmen's compensation insurance, disability benefits, pensions, hospitalization, retirement plans and group insurance, uniforms and working clothes and the cleaning thereof, and expenses imposed on or on behalf of the Landlord pursuant to any collective bargaining agreement.
The following items shall be excluded from Operating Expenses:
(i) Labor Costs in respect of officers and executives of Landlord or individual partners of a successor of Landlord if such successor be a partnership.
(ii) Any insurance premium to the extent that Landlord is reimbursed for such premium.
(iii) The cost of any items for which Landlord is reimbursed by insurance.
(iv) The cost of any additions to the Building subsequent to the date of original construction or any alterations or refurbishing of space leased to other tenants of the Building.
If the Landlord is not furnishing any particular work or service which Landlord is obligated to perform under this Lease (the cost of which if performed by the Landlord would constitute an Operating Expense) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by the Landlord, Operating Expenses shall be deemed for the purposes of this section to be adjusted downward by an amount equal to the additional Operating Expense which would reasonably have been incurred during such period by the Landlord if it had at its own expense furnished such work or service to such tenant.
(b) Share of Operating Expenses and Taxes. For and with respect to each
calendar year of the term of this Lease that the "Operating Expenses and Taxes"
as hereinabove defined exceed the "Operating Expenses and Taxes" for 1998 (the
"Base Year"), there shall_ accrue, as additional rent, Tenant's Share of
Operating Expenses and Taxes, being a percentage of such excess Operating
Expenses and Taxes based on Tenant's rentable square footage as relayed to the
total rentable square footage in the Building. Such additional rent shall be on
a per-diem basis for any partial calendar year included within the beginning and
end of the term. Any additional rent under this Paragraph shall be paid by
Tenant as a lump sum after the end of the calendar year for which such payment
is first due, and within thirty (30) days after submission of a bill therefor.
In addition, Tenant shall pay as estimated additional monthly rent one-twelfth
of the amount of such additional rent, per month for each calendar month during
the calendar year immediately succeeding the calendar year in which the actual
operating expenses and taxes were incurred, with such procedure being followed
for each year thereafter. If such estimated additional monthly rental payments
for any calendar year exceed the actual additional monthly rent under this
Section 3 for such year, such excess shall be applied as a credit against
subsequent payments of estimated additional monthly rent. The portion of such
additional rent allocable to the months of the then current calendar year
(including the month in which such notice is received) which have then elapsed
(computed on the basis of one-twelfth of Tenant's pro rata portion of such
increases for each elapsed month) shall be due and payable to Landlord fort
with; thereafter, Tenant shall pay on the first day of each calendar month
one-twelfth of the amount of such additional rent.
(c) Operating Expense and Tax Statements. Landlord shall furnish to Tenant, contemporaneously with the furnishing of billings to Tenant on account of Operating Expense and Taxes as hereinbefore provided, a comparative statement setting forth in reasonable detail the basis for the amount due by Tenant. Any such comparative statement shall be deemed approved by Tenant unless within thirty (30) days after the furnishing thereof, Tenant shall notify Landlord that it disputes the correctness of the statement, specifying in detail the basis for such assertion. Pending the resolution of such dispute, however, Tenant shall make payment in accordance with said comparative statement.
(d) Survival After Termination. If, upon termination of this Lease for any cause, the amount of any additional rent due pursuant to this Section 3 has not yet been determined, Tenant
shall pay Landlord an estimated amount of additional rent as determined by Landlord based upon the preceding year's additional rent and, an appropriate payment from Tenant to Landlord, or refund from Landlord to Tenant, shall be made promptly after such determination.
(e) Reduction or Elimination of An Operating Expense Component. If, during any calendar year, there shall be a reduction or elimination of any particular component of Operating Expenses by reason of the introduction of a labor saving device, energy conservation device, capital improvement or replacement installed by Landlord, the corresponding item of expense in the Operating Expense for the Base Year, shall be eliminated or reduced (in the same proportion as the reduction of that item in the period set forth below). The reduction of the operating expense item in the Base Year shall be made on an annualized basis, in the same proportion as the reduction of that item for the first 12 months of the new operation.
(f) Essential Capital Improvement. In the event Landlord shall hereafter make a capital expenditure for an "Essential Capital Improvement"", as hereinafter defined in this Section, the annual amortization of such expenditure (determined by dividing the amount of the expenditure by the reasonable useful life of the improvement) shall be deemed a cost to be included within "Operating Expenses" for each year of such useful life. As used herein, an "Essential Capital Improvement" means any one or more of the following:
(1) a labor saving device or other installation, improvement or replacement which reduces Operating Expenses, whether or not voluntary or required by governmental mandate; or
(ii) an installation or improvement required by reason of any law, ordinance or regulation of any governmental or quasigovernmental body, which requirement did not exist on the date hereof, and is applicable generally to similar office buildings in the City of Greensboro, North Carolina; or
(iii) an installation or improvement which directly enhances the safety of tenants in the Building generally, whether or not voluntary or required by governmental mandate (as, for example, but without limitation, for fire safety or security).
In no event shall an Essential Capital Improvement be treated as an Operating Expense component as described under Section 3(e) above.
In determining Operating Expenses for any year, including the Base Year for Operating Expenses, if less than 95% of the rentable area of the Building shall have been occupied by tenants for more than thirty (30) days during such year, Operating Expenses shall be deemed for such year to be an amount equal to the expenses which would be incurred had such occupancy of the Building been 95%
throughout such year, as reasonably determined by Landlord, except that in no event shall Operating Expenses for any year be based upon a percentage of occupancy less than that utilized for the Base Year for Operating Expenses.(
(g) For the purpose of this Section, Tenant's Proportionate Share of Operating Expenses and Taxes shall be 32.07% which is based on the gross rentable square foot area of the demised premises of 23,734 sq. ft. as it relates to the gross rentable square foot area of the Building of 74,000 square feet.
(h) Tenant may review Landlord's books and records related to Operating Expenses and Taxes and the calculation of Tenant's Proportionate Share during regular business hours upon forty-eight (48) hours notice.
4. Improvement of the Demised Premises
(a) Tenant's Plans. Landlord or Tenant with Landlord's written approval agrees to perform work in the Premises as shown on Tenant's Layout Plans, as prepared by Tenant, and attached hereto and made a part hereof, which plans designate the construction and finishing of the Premises for Tenant's occupancy. Tenant's Layout Plans shall be in conformity with the floor plans annexed hereto as Exhibit "A" and with all applicable laws and requirements of public authorities. Tenant's Layout Plans shall designate, among other things, the locations of and specifications for all plumbing, electrical and mechanical equipment to be installed in the 'remises, all partitions, doors, lighting fixtures, electric receptacles and switches, telephone outlets and special air-conditioning and other installations.
(b) Tenant's Improvement Plans. Tenant's Layout Plans and Finish Plans are collectively referred to in this Lease as "Tenant's Improvement Plans". The work required to be performed pursuant to Tenant's Improvement Plans and the Engineering Plans is herein sometimes referred to as "Tenant Work."
(c) Tenant's Work. Tenant shall complete and prepare the Premises for Tenant's initial occupancy in a good and workmanlike manner substantially in accordance with Tenant's Improvement Plans and the Engineering Plans. Landlord reserves the right, however:
(1) to make substitutions of material of equivalent grade and quality when and if any specified material shall not be readily and reasonably available, and
(ii) to make changes necessitated by conditions met in the course of construction, provided that Tenant's approval of any substantial change shall first be obtained (which approval shall not be unreasonably withheld or delayed so long as there shall be general conformity with Tenant's Improvement Plans).
(d) Charges for Work. In the completion and preparation of the Premises in accordance with Tenant's Improvement Plans, Tenant agrees to perform at its own expense those items of the work set forth on Exhibit "C" attached hereto (herein referred to as "Standard Tenant Work") 'as shall be reflected in Tenant's Improvement Plans. All work performed by Tenant in addition to or
in substitution for Standard Tenant Work is hereinafter referred to as "Special Tenant Work". All special Tenant Work shall be furnished, installed and performed by Tenant upon Landlord's
written approval of such Special Tenant Work and at Tenant's expense, utilizing a general contractor (" Tenant's Contractor") approved by Landlord. Unless otherwise agreed in writing, the charge to Tenant for Special Tenant Work shall be Tenant's out-of-pocket expenses of every kind and nature in connection therewith, including without limitation Tenant's contract or purchase price for materials, labor and services.
(e) Tenant's Contractor. Tenant may at its sole expense select and employ its own contractors for specialized finishing work in the Premises which is not to be performed by Landlord and which is reflected as such in Tenant's Improvement Plans, such as carpeting, telephone installation, special cabinet work and millwork, decoration and installation of specialized equipment, subject to the following qualifications:
(1) Tenant shall first obtain the approval of Landlord, in writing, of the specific work it proposes to perform and shall furnish Landlord with reasonably detailed plans and specifications therefor (such approval not to be unreasonably withheld);
(2) The work shall be performed by responsible contractors and subcontractors approved in advance by Landlord, who shall not, in Landlord's reasonable opinion, prejudice Landlord's relationship with Landlord's contractors or subcontractors or the relationship between such contractors and their subcontractors or employees, or disturb harmonious labor relations, who shall furnish in advance and maintain in effect Workmen's Compensation Insurance in accordance with statutory requirements and comprehensive public liability insurance (naming, Landlord and Landlord's contractors and subcontractors and Landlord's managing agent as additional insureds) with limits satisfactory to Landlord, and who shall, prior to the commencement of any work, file waivers of mechanic's liens on account of the work to be performed by any of Tenant's contractors, sub-contractors or materialmen;
(3) No such work shall be performed in such manner or at such times as to interfere with any work being done by any of Landlord's contractors or subcontractors in the Premises or in the Building or about the Property generally. Landlord shall, however, endeavor to allow Tenant access for such work prior to the commencement of the term hereof at the earliest time consistent with the restrictions of this subsection (g);
(4) Tenant and its contractors and subcontractors shall be solely responsible for the transportation, safekeeping and storage of materials and equipment used in the performance of such finishing work, for the removal of waste and debris resulting therefrom, and for any damage caused by them to any installation or work performed by Landlord's contractors and subcontractors; and
(5) Tenant's contractors and subcontractors shall be subject to the general administrative supervision of Landlord's general contractor for scheduling purposes, but said general contractor of Landlord shall not be responsible for any aspect of the work performed by Tenant's contractors or subcontractors or for the coordination of the work of Landlord's contractors with Tenant's contractors.
5. Services
The Landlord shall provide, at Landlord's expense, except as otherwise provided, the following services on Monday through Friday from 8:00 A.M. to 6:00 P.M., and on Saturday from 8:00 A.M. to 1:00 P.M., legal holidays excepted.
(a) Reasonable quantities of water to lavatories, toilets and water fountains in or appurtenant to the Premises.
(b) Reasonable amounts of electric current as are customarily provided in Class A office space. If tenant shall require electric current in excess of that usually furnished or supplied for use of the Premises as general office space, Tenant shall first procure the consent of the Landlord which consent Landlord may refuse. In the event Landlord shall approve Tenant's request for excess electric current, Landlord may cause an electric check meter to be installed in the Premises or Landlord shall have the right to cause a reputable independent electrical engineer or consulting firm to survey and determine the value of such excess electric current. The cost of any such survey or meters and installation, maintenance and repairs thereof shall be paid for by Tenant. Tenant agrees to pay the Landlord, promptly upon demand therefor, for all such excess electrical current consumed plus any additional expenses incurred in keeping account of the excess electrical current so consumed. Tenant covenants and agrees that at all times its use of electrical current shall never exceed Tenant's proportionate share of the capacity of existing feeders to the Building or the riser or risers or wiring installation. Any riser or wiring to meet Tenant's excess electric requirements upon written request of Tenant, will be installed by Landlord at the sole cost and expense of Tenant, if in Landlord's sole judgment, the same is necessary and will not cause permanent damage or injury to the Building or the Premises or cause or create a dangerous or hazardous condition or entail excessive or unreasonable alteration, repairs or expenses or interfere with or disturb other tenants or occupants.
(c) HVAC. Landlord shall furnish heat, ventilation and air-conditioning to the Premises, Monday through Friday from 8:00 A.M. to 6:00 P.M., and on Saturday from 8:00 A.M. to 1:00 P.M., legal holidays excepted. Heat and air-conditioning required by Tenant at times other than those mentioned above shall be supplied upon reasonable prior notice, and shall be paid for by Tenant, promptly upon billing, at such rates as Landlord shall from time to time establish therefor. The heating and air-conditioning systems intended to service the Premises have been designed to be capable of providing comfortable occupancy for normal office uses. Any additional or supplementary heating or cooling systems
required or desired by Tenant may be installed by Tenant, at Tenant's cost, in accordance with the provisions of Paragraph 4 hereof. The furnishing of heat and air-conditioning shall be subject to any statute, ordinance, rule, regulation, resolution or recommendation for energy conservation which may be promulgated by
any governmental agency or organization which Landlord shall be required to abide by, or in good faith may elect to abide with.
(d) Janitorial. Landlord shall provide janitorial services to all portions of the Premises as specified on Exhibit "D" annexed hereto. Any and all additional or specialized janitorial service desired by Tenant may be contracted for by Tenant directly with Landlord's janitorial agent, and the cost and payment therefor shall be and remain the sole responsibility of Tenant.
(e) Landlord will keep in operation in the Building during the aforesaid business period, as many of the passenger elevators as in Landlord's judgment are necessary to maintain elevator service. In case of accident, labor strikes, repairs, renewals or improvements to the Building or machinery therein, or for other cause deemed sufficient by Landlord, or those acting for Landlord, the operation of said elevators and other machinery may be changed or suspended.
Landlord reserves the right to alter the hours during which the above services are to be provided during the term hereof; however services as are customarily offered in Class A office space shall be provided.
Should Tenant require any additional work or service, including but not limited to the additional work or service described above, including service furnished outside the stipulated hours, Landlord may, on terms to be agreed, upon reasonable advance notice by Tenant, furnish such additional service and Tenant agrees to pay the Landlord such charges as may be agreed on, but in no event at a charge less than Landlord's actual cost plus overhead for the additional services provided.
It is understood that Landlord does not warrant that any of the services referred to above, or any other services which Landlord may supply, will be free from interruption, Tenant acknowledging that any one or more such services may be suspended by reason of accident or of repairs, alterations or improvements necessary to be made, or by strikes or lockouts, or by reason of operation of law, or causes beyond the reasonable control of Landlord. Any such interruption or discontinuance of service shall never be deemed an eviction or disturbance of Tenant's use and possession of the Premises, or any part thereof, or render Landlord liable to Tenant for damages by abatement of rent or otherwise, or relieve Tenant from performance of Tenant's obligations under this Lease.
6. Quiet Enjoyment
So long as the Tenant shall observe and perform the covenants and agreements binding on it hereunder, the Tenant shall at all times during the term herein granted peacefully and quietly have and enjoy possession of the Premises without any encumbrance or hindrance by, from or through the Landlord, subject to Section 29.
7. Certain Rights Reserved To The Landlord
The Landlord reserves all rights with respect to the Property not Leased to Tenant hereby, including without limitation, the following rights:
(a) To name the Building and/or to change the name or street address of the Building.
(b) To install and maintain a sign or signs on the exterior or interior of the Building.
(c) To designate all sources furnishing sign painting and lettering, ice, drinking water, towels, toilet supplies, shoe shining, vending machines, mobile vending service, catering, and like services used on the Premises or in the Building.
(d) During the last ninety (90) days of the term, if during or prior to that time the Tenant vacates the Premises, to decorate, remodel, repair, alter or otherwise prepare the Premises for reoccupancy, without affecting Tenant's obligation to pay rental for the Premises.
(e) To constantly have pass keys to the Premises.
(f) On reasonable prior notice to the Tenant, to exhibit the Premises to prospective tenants during the last twelve (12) months of the term, and to any prospective purchaser, mortgagee, or assignee of any mortgage on the Property and to others having a legitimate interest at any time during the term.
(g) At any time in the event of an emergency, and otherwise at reasonable times, to take any and all measures, including inspections, repairs, alterations, additions, and improvements to the Premises or to the Building, as may be necessary or desirable for the safety, protection or preservation of the Premises or the Building or the Landlord's interests, or as may be necessary or desirable in the operation or improvement of the Building or in order to comply with all laws, orders and requirements of governmental or other authority.
(h) To install vending machines of all kinds in the Premises, and to provide mobile vending service therefor, and to receive all of the revenue derived therefrom, provided, however, that no vending machines shall be installed by Landlord in the Premises nor shall any mobile vending service be provided therefor, unless Tenant so requests.
8. Estoppel Certificate by Tenant
The Tenant agrees that from time to time upon not less than ten (10) days prior request by the Landlord, the Tenant will deliver to the Landlord a statement in writing certifying (a) that this Lease is unmodified and in full force and effect (or if there have been modifications that the same is in full force and effect as modified and identifying the modifications), (b) the dates to which the minimum annual rent and other charges have been paid, (c) whether or not Tenant has or claims any offset, deduction or counter claims against Landlord under this Lease and (d) that, so far as the person making the certificate knows, the Landlord is not in default under any provision of this Lease, and, if the Landlord is in default, specifying each such default of which the person making the certificate may have knowledge, it being understood that any such statement so delivered may be relied upon by any landlord under any ground or underlying lease, or any prospective purchaser, mortgagee, or any assignee of any mortgage on the Property.
9. Waiver of Certain Claims
The Tenant, to the extent permitted by law, waives all claims it may lave against the Landlord, and against the Landlord's agents and employees for damage to person or property sustained by the Tenant or by any occupant of the Premises, or by any other person, resulting from any part of the Property or any equipment or appurtenances becoming out of repair, or resulting from any accident in or about the Property or resulting directly or indirectly from any act or neglect of any tenant or occupant of any Dart of the Property or of any other person, unless such damage is a result of the negligence or contributory negligence of Landlord, or Landlord's agents or employees. If any damage results from any act or neglect of the Tenant, the Landlord may, at the Landlord's option, repair such damage and the Tenant shall thereupon pay to the Landlord the total cost of such repair.
All personal property belonging to the Tenant or any occupant of the Premises that is in or on any part of the Property shall be there at the risk of the Tenant or of such other person only, and the Landlord, its agents and employees shall not be liable for any damage thereto or for the theft or misappropriation thereof unless such damage, theft or misappropriation is a result of the negligence or contributory negligence of Landlord or Landlord's agents or employees. The Tenant agrees to hold the Landlord harmless and indemnified against claims and liability for injuries to all persons and for damage to or loss of property occurring in or about the Property, due to any act of negligence or default under this lease by the Tenant, its contractors, agents or employees.
To the extent that the Tenant carries hazard insurance on any of its property in the Premises and to the extent that the Landlord carries hazard insurance on the Property, each policy of insurance shall contain, if obtainable from the insurer selected by the Tenant or the Landlord, as the case may be, without additional expense, a provision waiving subrogation against the other party to this Lease. If such provision can be obtained only at additional expense, the obligation to obtain such provision shall continue if the other party, on notice shall pay the amount of such additional expense. Each of the parties hereto hereby releases the other with respect to any liability which the other may have for any damage by fire or other casualty with respect to which the party against whom such release is claimed shall be insured under a policy or policies of insurance containing such provision waiving subrogation.
10. Liability Insurance
Tenant shall, at its expense, maintain during the term, comprehensive public liability insurance, contractual liability insurance and property damage insurance under policies issued by insurers, with limits of not less than $5,000,000 for personal injury, bodily injury, death, or for damage or injury to or destruction of property'(including the loss of use thereof) for any one occurrence. Tenant's policies shall name Landlord, its
agents, servants and employees as additional insureds. At the option of the Landlord, copies of certificates of insurance coverage shall be held by Landlord.
11. Holding Over
If the Tenant retains possession of the Premises or any part thereof for a
period of one (1) month after the termination of the term, the Tenant shall pay
the Landlord Rent at triple the monthly rate specified in Section 2 and Section
3. If Tenant retains possession beyond that one (1) month period, tenancy shall
continue at sufferance on a month-to-month basis at double the monthly rent
specified in Section 2 and Section 3 for the time the Tenant thus remains in
possession and, in addition thereto, shall pay the Landlord for all damages
consequential as well as direct, sustained by reason of the Tenant's retention
of possession. If the Tenant remains in possession of the Premises, or any part
thereof, for a period greater than one (1) month after the expiration of the
term, such holding over shall, at the election of the Landlord expressed in a
written notice to the Tenant and not otherwise, constitute a renewal of this
lease for one year. The provisions of this Section do not exclude the Landlord's
rights of re-entry or any other right hereunder.
12. Assignment and Subletting
The Tenant shall not, without the Landlord's prior written consent which shall not be unreasonably withheld, (a) assign, convey, mortgage, pledge, encumber or otherwise transfer (whether voluntarily or otherwise) this Lease or any interest under it; (b) allow any transfer thereof or any lien upon the Tenant's interest by operation of law; (c) sublet the Premises or any part thereof, or (J) permit the use or occupancy of the Premises or any part thereof by any one other than the Tenant.
Tenant agrees to pay to Landlord, on demand, reasonable costs incurred by Landlord in connection with any request by Tenant for Landlord to consent to any assignment or subletting by Tenant.
If this lease be assigned or if the Premises or any part thereof be sublet or occupied by anybody other than Tenant, Landlord may, after default by Tenant, collect rent from the assignee, subtenant or occupant, and apply the net amount collected to the Rent herein reserved, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of any of Tenants covenants contained in this Lease or the acceptance of the assignee, subtenant or occupant as Tenant, or a release of Tenant from further performance by Tenant of covenants on the part of Tenant herein contained.
Notwithstanding anything contained herein to the contrary, and in addition to the Landlord's right to consent to such assignment, in toe event that any time during the term of this Lease, Tenant desires to assign this Lease, Tenant should notify the Landlord in writing (hereinafter referred to as "Assignment Notice") of the terms of the proposed assignment and shall give the Landlord the
option to accept an assignment from the Tenant of this Lease on the same terms as this Lease or, at Landlord's option, to terminate this lease. The option to accept such assignment or to terminate this Lease shall be exercisable by Landlord in writing for a period of fifteen (15) days after the receipt of the Assignment Notice.
Notwithstanding anything contained herein to the contrary, and in addition
to Landlord's right to consent to such sublet, in the event that at any time
during the term of this lease Tenant desires to sublet all or part of the
Premises, Tenant shall notify the Landlord in writing (hereinafter referred to
as "Sublet Notice") of the terms of the proposed subletting and the area so
proposed to be sublet and shall give the Landlord the option to sublet from
Tenant such space (hereinafter referred to as "sublet space") at the same rent
and additional rent as Tenant is required to pay to Landlord under this lease
for the same space or, at Landlord's option, to terminate the lease with respect
to the sublet space. If the sublet space does not constitute the entire Premises
and Landlord exercises its option to terminate this lease with respect to the
sublet space, then as to that portion of the Premises which is not part of the
sublet space, this lease shall remain in full force and effect except that the
Rent shall be reduced by a fraction, the numerator of which shall be the
rentable square feet of the sublet space and the denominator of which shall be
the rentable square feet of the Premises. The option to sublet, or to terminate
the lease, shall be exercisable by Landlord in writing for a period of fifteen
(15) days after receipt of the Sublet Notice.
In the event Landlord exercises its option to accept such assignment or to sublease the sublet space, the terms of the assignment or the term of the subletting from the Tenant to the Landlord for the sublet space shall be as set forth in the Assignment Notice or the Sublet Notice, as the case may be, and shall be on such other terms and conditions as are contained in this lease to the extent applicable.
Tenant shall be entitled to receive Gross Proceeds (as hereinafter defined) in an amount (the "Priority Tenant Share") equal to the sum of $1,000. After Tenant has received the Priority Tenant Share, Tenant shall pay Landlord, as additional rent, as and when received, fifty percent (50%) of Gross Proceeds.
"Gross Proceeds" means an amount equal to the excess, if any, of (x) :he amounts which are payable by the sublessee or an assignee under or in connection with any sublease or assignment of the Premises (less, in the case of each payment of fixed rent or basic rent, an amount equal to five (5%) percent of each such payment) over (y) the corresponding amounts, if any, payable under this Lease (or if there be no such corresponding amount, in excess of zero). Amounts which are payable by the sublessee or an assignee under or in connection with any sublease or assignment of the Premises shall be deemed (x) not to be Gross Proceeds until such payment is received by Tenant and (y) not to include any payment
by the sublessee or an assignee under such sublease or operative document(s) with respect to such assignment which is identified as a payment for tenant improvements which were constructed by Tenant, or at Tenant's direction, for such sublessee or assignee, which shall not exceed in the aggregate the then unamortized cost to Tenant of such tenant improvements.
In the event Landlord does not exercise either of its options specified above and Tenant completes an assignment or a sublease with a third party, the assignee or subtenant shall be subject to and comply with the requirements of this Section.
13. Condition of Premises
Tenant's taking possession of the Premises shall be conclusive evidence as against the Tenant that the Premises were in good order and satisfactory condition when the Tenant took possession. No promises of the Landlord to alter, remodel, repair or improve the Premises or the Building and no representation respecting the condition of the Premises or the Building have been made by Landlord to Tenant, other than as may be contained herein or in a separate Work Letter Agreement signed by Landlord and Tenant. At the termination of this Lease, the Tenant shall return the Premises broom-clean and in as good condition as when the Tenant took possession, ordinary wear and loss by fire or other casualty excepted, failing which the Landlord may restore the Premises to such condition and the Tenant shall pay the cost thereof on demand.
14. Use Of Premises
The Tenant agrees to comply with the following rules and regulations and with such reasonable modifications thereof and additions thereto as the Landlord may hereafter from time to time make for the Building. The Landlord shall not be responsible for the -Ion-observance by any other tenant of any of said rules and regulations.
(a) The Tenant shall not exhibit, sell or offer for sale on the Premises or in the Building, any article or thing except those articles or things essentially connected with the stated use of the Premises by the Tenant without the advance consent of the Landlord.
(b) The Tenant will not make or permit to be made any use of the Premises or any part thereof which would violate any of the covenants, agreements, terms, provisions and conditions of this Lease or which directly or indirectly is forbidden by public law, ordinance or governmental regulation or which may be dangerous to life, limb, or property, or which may invalidate or increase the premium cost of any policy of insurance carried on the Building or covering its operation, or which will suffer or permit the Premises or any part thereof to be used in any manner or anything to be brought into or kept therein which, in the judgment of Landlord, shall in any way impair or tend to impair the character, reputation or appearance of the Property as a high quality office building, or which will impair or interfere with or tend to impair or interfere with any of the services performed by Landlord for
the Property.
(c) The Tenant shall not display, inscribe, print, paint maintain or affix on any place in or about the Building any sign, notice, legend, direction, figure or advertisement, except on the doors of the Premises and on the Directory Board, which shall be maintained by Landlord,, and then only such names(s) and matter, and in such color, size, style, place and materials, as shall firs: have been approved by the Landlord. The listing of any name other than that of Tenant, whether on the doors of the Premises, on the Building directory, or otherwise, shall not operate to vest
any right or interest in this Lease or in the Premises or be deemed to be the written consent of Landlord mentioned in Section 12, it being expressly understood that any such listing is a privilege extended by Landlord revocable at will by written notice to Tenant.
(d) The Tenant shall not advertise the business, profession or activities of the Tenant conducted in the Building in any manner which violates the letter or spirit of any code of ethics adopted by any recognized association or organization pertaining to such business, profession or activities, and shall not use the name of the Building for any purposes other than that of the business address of the Tenant and shall never use any picture or likeness of the Building in any circulars, notices, advertisements or correspondence without the Landlord's consent.
(e) No additional locks or similar devices shall be attached to any door or window without Landlord's prior written consent which shall not be unreasonably withheld, so long as keys or access cards to such locks or devices are provided to Landlord. No keys for any doors other than those provided by the Landlord shall be made. If more than five (5) keys for one lock are desired, the Landlord will provide the same upon payment by the Tenant. All keys must be returned to the Landlord at the expiration or termination of this Lease.
(f) The Tenant shall not make any alterations, improvements or additions to the Premises including, but not limited to, wall coverings, floor coverings and special lighting installations, without the Landlord's advance written consent in each and every instance, unless such alterations, improvements or additions are non-structural and the cost of such is less than, or equal to, one thousand dollars ($1,000.00). In the event Tenant desires to make alterations, improvements or additions, Tenant shall first submit to Landlord plans and specifications therefor and obtain Landlord's written approval thereof prior to commencing any such work. All alterations, improvements or additions, whether temporary or permanent in character, made by Landlord or Tenant in or upon the Premises shall become Landlord's property and shall remain upon the Premises at the termination of this Lease without compensation to Tenant (excepting only Tenant's movable office furniture, trade fixtures, office and professional equipment) provided, however, that Landlord shall have the right to require Tenant to remove such alterations, improvements or additions, at Tenant's cost, upon the termination of this Lease and to repair any damage to the Premises resulting therefrom.
(g) All persons entering or leaving the Building after hours on Monday through Friday, or at any time on Saturdays, Sundays or holidays, may be required to do so under such regulations as the Landlord may impose. The Landlord may exclude or expel any peddler.
(h) The Tenant shall not overload any floor. The Landlord may direct the time and manner of delivery, routing and removal, and the location, of safes and other heavy articles.
(i) Unless the Landlord gives advance written consent, the Tenant shall not install or operate any steam or internal
combustion engine, boiler, machinery, refrigerating or heating device or air-conditioning apparatus in or about the Premises, or carry on any mechanical business therein, or use the Premises for housing accommodations or lodging or sleeping purposes, or use any illumination other than electric light, or use or permit to be brought into the Building any inflammable fluids such as gasoline, kerosene, naphtha, and benzine, or any explosives, radioactive materials or other articles deemed extra hazardous to life, limb or property except in a manner which would not violate any ordinance or regulation of the City. The Tenant shall not use the Premises for any illegal or immoral purpose. Tenant shall be permitted to install a refrigerator, microwave oven, and coffee machine for its own use.
(j) The Tenant shall cooperate fully with the Landlord to assure the effective operation of the Building's air-conditioning system including the closing of venetian blinds and drapes, and if windows are operable to keep them closed when the air-conditioning system is in use.
(k) The Tenant shall not contract for any work or service which might involve the employment of labor incompatible with the Building employees or employees of contractors doing work or performing services by or on behalf of the Landlord.
(l) The sidewalks, halls, passages, exits, entrances, elevators and stairways shall not be obstructed by the Tenant or used for any purpose other than for ingress to and egress from its Premises. The halls, passages, exits, entrances, elevators, stairways and roof are not for the use of the general public and the Landlord shall in all cases retain the right to control and prevent access thereto by all persons whose presence, in the judgment of the Landlord, shall be prejudicial to the safety, character, reputation and interests of the Building and its tenants, provided that nothing herein contained shall be construed to prevent such access to persons with whom the Tenant normally deals in the ordinary course of Tenant's business unless such persons are engaged in illegal activities. No Tenant and no employees or invitees of any Tenant shall go upon the roof or mechanical floors of the Building.
(m) Tenant shall not use, keep or permit to be used or kept any foul or noxious gas or substance in the Premises, or permit or suffer the Premises to be occupied or used in a manner offensive or objectionable to the Landlord or other occupants of the Building by reason of noise, odors and/or vibrations, or interfere in any way with other tenants or those having business therein, nor shall any animals or birds be brought in or kept in or about the Premises or the Building.
(n) Tenant shall see that the doors, and windows, if operable, of the Premises are closed and securely locked before leaving the Building and must observe strict care and caution that all water faucets or water apparatus are entirely shut off before Tenant or Tenant's employees leave the Building, and that all electricity shall likewise be carefully shut off so as to prevent waste or damage, and for any default or carelessness Tenant shall make good all injuries or losses sustained by other tenants or occupants of the Building or Landlord.
In addition to all other liabilities for breach of any covenant of this Section, the Tenant shall pay to the Landlord an amount equal to any increase in insurance premiums payable by the Landlord or any other tenant in the Building, caused by such breach.
15. Repairs
Tenant shall give to Landlord prompt written notice of any damage to, or defective condition in any part or appurtenance of the 3uilding's plumbing, electrical, heating, air-conditioning or other systems serving, located in, or passing through the Premises. Subject to the provisions of Section 13, the Tenant shall, at the Tenant's own expense, keep the Premises in good order, condition and repair during the term, except that the Landlord, at the Landlord's expense (unless caused by the fault or negligence of the Tenant, its contractors, agents, or employees) shall keep in repair the elevators, electrical lines, plumbing fixtures located in the Building (except those installed by Tenant with Landlord's approval) heating and air-conditioning equipment, outside walls, including windows, and roof. The Tenant at the Tenant's expense, shall comply with all laws and ordinances, and all rules and regulations of all governmental authorities, applicable to the Premises or to the Tenant's use thereof, except that the Tenant shall not hereby be under any obligation to comply with any law, ordinance, rule or regulation requiring any structural alteration of or in connection with the Premises, unless such alteration is required by reason of a condition which has been created by, or at the instance of, the Tenant, or is required by reason of a breach of any of the Tenant's covenants and agreements hereunder. In addition Tenant shall be obligated to comply with the rules and regulations of all insurance bodies in the event all or a portion of the Premises is used for any purpose other than office space. Landlord shall not be required to repair any injury or damage by fire or other cause, or to make any repairs or replacements of any panels, decoration, office fixtures, railing, ceiling, floor covering, partitions, or any other property installed in the Premises by, or at the cost of, the Tenant.
16. Untenantability
If the Premises are made untenantable in whole or in part by fire or other casualty the Rent, until repairs shall be made or this Lease terminated as hereinafter provided, shall be apportioned on a per diem basis according to the part of the Premises which is usable by the Tenant, if, but only if, such fire or other casualty be not caused by the fault or negligence of the Tenant, its contractors, agents, or employees. If such damage be so extensive that the Premises cannot be restored to "Building Standard" by the Landlord within a period of three (3) months, either party shall have the right to cancel this Lease by notice to the other given at any time with thirty (30) days after the date of such damage; except that if such fire or casualty resulted from the Tenant's fault or negligence, the Tenant shall have no right to cancel. If a portion of the Building other than the Premises shall be so damaged that in the opinion of the Landlord the Building should not be restored or should be restored in such a way as to alter the Premises materially, the Landlord may cancel
this Lease by notice to the Tenant given at any time within thirty
(30) days after the date of such damage. In the event of giving effective notice pursuant to this Section, this Lease and the term and the estate hereby granted shall expire on the date fifteen (15) days after the giving of such notice as fully and completely as if such date were the date hereinbefore set for the expiration of the term of this Lease. If this Lease is not so terminated, the Landlord will promptly repair the damage at the Landlord's expense.
17. Eminent Domain
(a) In the event that title to the whole or any substantial part of the Premises shall be lawfully condemned or taken in any manner for any public or quasi-public use, this lease and the term and estate hereby granted shall forthwith cease and terminate as of the date of vesting of title and the Landlord shall be entitled to receive the entire award, the Tenant hereby assigning to the Landlord the Tenant's interest therein, if any.
(b) In the event that title to a part of the Building other than the Premises shall be so condemned or taken and if in the opinion of the Landlord, the Building should not be restored or should be restored in such a way as to alter the Premises materially, the Landlord may terminate this lease and the term and estate hereby granted by notifying the Tenant of such termination within sixty (60) days following the date of vesting title, and this lease and the term and estate hereby granted shall expire on the date specified in the notice of termination, not less than sixty (60) days after the giving of such notice, as fully and completely as if such date were the date hereinbefore set for the expiration of the term of this lease, and the Rent hereunder shall be apportioned as of such date.
18. Landlord's Remedies
All rights and remedies of the Landlord herein enumerated shall be cumulative, and none shall exclude any other right or remedy allowed by law. In addition to the other remedies in this lease provided, the Landlord shall be entitled to the restraint by injunction of the violation or attempted violation of any of the covenants, agreements or conditions of this Lease.
(a) If the Tenant shall (i) apply for or consent to the appointment of a receiver, trustee or liquidator of the Tenant or of all or a substantial part of its assets, (ii) file a voluntary petition in bankruptcy or admit in writing its inability to pay its debts as they come due, (iii) make a general assignment for the benefit of creditors, (iv) file a petition or an answer seeking reorganization or arrangement with creditors or to take advantage of any insolvency law, or (v) file an answer admitting the material allegations of a petition filed against the Tenant in any bankruptcy, reorganization or insolvency proceeding, or not have such petition dismissed within ninety (90) days or if an order, judgment or decree shall be entered by any court of competent jurisdiction adjudicating the Tenant a bankrupt or insolvent or approving a petition seeking reorganization of the Tenant or appointing a receiver, trustee or liquidator of the Tenant or of all or a substantial part of its assets, then in any of such events, the Landlord may give to the Tenant a notice of
intention to end the term of this Lease specifying a day not earlier than thirty
(30) days thereafter, and upon the giving of such notice the term of this Lease
and all right, title and interest of the Tenant hereunder shall expire as fully
and completely on the day so specified as if that day were the date herein
specifically fixed for the expiration of the term.
(b) If the Tenant defaults in the payment of minimum annual rent and such default continues for ten (10) days after notice, or defaults in the prompt and full performance of any other provision of this Lease and such default continues for fifteen (15) days after notice, or if the leasehold interest of the Tenant be levied upon under execution or be attached by process of law, or if the Tenant abandons the Premises, then and in any such event the Landlord may, at its election, either terminate the Lease and the Tenant's right to possession of the Premises or, without terminating this Lease, endeavor to relet the Premises. Notwithstanding the above, Landlord shall only be obligated to give Tenant notice of a default in rent payment two (2) times in each lease year. Thereafter, Tenant shall be immediately in default if rent payments are not made on the date due. Nothing herein shall be construed so as to relieve the Tenant of any obligation, including the payment of minimum annual rent, as provided in this Lease.
(c) Upon any termination of this lease, the Tenant shall surrender possession and vacate the Premises immediately, and deliver possession thereof to the Landlord, and hereby grants to the Landlord full and free license to enter into and upon the Premises in such event with or without process of law and to repossess the Landlord of the Premises as of the Landlord's former estate and to expel or remove the Tenant and any others who may be occupying or within the Premises and to remove any and all property therefrom, using such force as may be necessary, without being deemed in any manner guilty of trespass, eviction or forcible entry or detainer, and without relinquishing the Landlord's right to rent or any other right given to the Landlord hereunder or by operation of law.
(d) If the Tenant abandons the Premises or the Landlord otherwise becomes entitled so to elect, and the Landlord elects, without terminating the lease, to endeavor to relet the Premises, the Landlord may, at the Landlord's option enter into the Premises, remove the Tenant's signs and other evidence of tenancy, and take and hold possession thereof as in Paragraph (c) of this Section provided, without such entry and possession terminating the lease or releasing the Tenant, in whole or in part, from the Tenant's obligation to pay the Rent hereunder for the full term as hereinafter provided. Upon and after entry into possession without termination of the lease, the Landlord may relet the Premises or any part thereof for the account of the Tenant to any person, firm or corporation other than the Tenant for such rent, for such time and upon such terms as the Landlord shall determine, to be reasonable. In any such case, the Landlord may make repairs, alterations and additions in or to the Premises, and redecorate the same to the extent deemed by the Landlord necessary or desirable, and the Tenant shall, upon demand, pay the cost
thereof, together with the Landlord's expenses of the reletting. If tie consideration collected by the Landlord upon any such reletting for the Tenant's account is not sufficient to pay monthly the full amount of the Rent reserved in this lease, together with the cost of repairs, alterations, additions,
redecorating and the Landlord's expenses, the Tenant shall pay to the Landlord the amount of each monthly deficiency upon demand and if the consideration so collected from any such reletting is more than sufficient to pay the full amount of the Rent reserved herein, together with the costs and expenses of the Landlord, the Landlord, at the end of the stated term of this lease, shall account to the Tenant.
(e) If the Landlord elects to terminate this lease in any of the contingencies specified in this Section, it being understood that the Landlord may elect to terminate the lease after and notwithstanding its election to terminate the Tenant's right to possession as in Paragraph (b) of this Section provided, the Landlord shall forthwith upon such termination be entitled to recover as damages, and not as a penalty, an amount equal to the then present value of the minimum annual rent and additional rent provided in this lease for the residue of the stated term hereof, less the present value of the fair rental value of the Premises for the residue of the stated term.
(f) Any and all property which may be removed from the Premises by the Landlord pursuant to the authority of the lease or of law, to which the Tenant is or may be entitled, may be handled, removed or stored by the Landlord at the risk, cost and expense of the Tenant, and the Landlord shall in no event be responsible for the value, preservation or safekeeping thereof. The Tenant shall pay to the Landlord, upon demand, any and all expenses incurred in such removal and all storage charges against such property so long as the same shall be in the Landlord's possession or under the Landlord's control. Any such property of the Tenant not removed from the Premises or retaken from storage by the Tenant within thirty (30) days after the end of the term or of the Tenant's right to possession of the Premises, however terminated, shall be conclusively deemed to have been forever abandoned by the Tenant and either may be retained by Landlord as its property or may be disposed of in such manner as Landlord may see fit.
(g) The Tenant agrees that if it shall at any time fail to make any payment or perform any other act on its part to be made or performed under this lease, the Landlord may, but shall not be obligated to, and after reasonable notice or demand and without waiving, or releasing the Tenant from, any obligation under this lease, make such payment or perform such other act to the extent the Landlord may deem desirable, and in connection therewith to pay expenses and employ counsel. The Tenant agrees to pay a reasonable attorney's fee if legal action is required to enforce performance by Tenant of any condition, obligation or requirement hereunder. All sums so paid by the Landlord and all expenses in connection therewith, together with interest thereon at the rate of 18% per annum from the date of payment, shall be deemed additional rent hereunder and payable at the time of any installment of Rent thereafter becoming due and the Landlord shall have the same rights and remedies for the non-payment thereof, or of any other additional rent, as in the case of default in the payment of rent.
(h) Interest on Past Due Payments and Advances. Tenant
covenants and agrees to pay to Landlord interest on demand at the rate of 2% above the "Prime Rate," as hereinafter defined, on the amount of any Monthly Rent or Monthly Deposit not paid when due,
from the date due and payable and on the amount of any payment made by Landlord required to have been made by Tenant under this Lease and on the amount of any costs and expenses, including reasonable attorney's fees, paid by Landlord in connection with the taking of any action to cure any Default by tenant from the date of making any such payment or the advancement of such costs and expenses by Landlord. "Prime Rate" shall mean that interest rate set by Wachovia Bank of North Carolina, N.A., from time to time as its interest rate basis for commercial borrowings, but never in excess of the maximum amount of finance charge permissible under applicable law. In the event that the Bank discontinues the use of a Prime Rate, the Prime Rate being charged by any other national banking association located in North Carolina, as selected by Landlord in its sole discretion, shall be used for computing the interest rate under this Section.
19. Notice and Consents
All notices, demands, requests, consents or approvals which may or are
required to be given by either party to the other shall be in writing and shall
be deemed given when sent by United States Certified or Registered Mail, postage
prepaid, (a) if for the Tenant, addressed to Facilities Manager at the Building,
and to Tenant at 1 Technology Way, P.O. Box 9106, Norwood, MA 02062, Attention:
Chief Financial Officer or at such other place as the Tenant may from time to
time designate by notice to the Landlord, or (b) if for the Landlord, addressed
to the office of the Landlord in the Building with a copy to Landlord addressed
to Suite 1200, 230 S. Tryon Street, Charlotte, NC 28202 or at such other places
as the Landlord may from time to time designate by notice to the Tenant. All
consents and approvals provided for herein must be in writing to be valid. If
the term Tenant as used in this lease refers to more than one person, any
notice, consent, approval, request, bill, demand or statement, given as
aforesaid to any one of such persons shall be deemed to have been duly given to
Tenant.
Except as specifically provided in this lease, Tenant hereby expressly waives the service of intention to terminate this lease or to re-enter the Premises and waives the service of any demand for payment of Rent or for possession and waives the service of any other notice or demand prescribed by any statute or other law.
20. Invalidity of Particular Provisions; Severability
If any clause or provision of this lease is or becomes illegal, invalid, or unenforceable because of present or future laws or any rule or regulation of any governmental body or entity, effective during its term,, the intention of the parties hereto is that the remaining parts of this lease shall not be affected thereby unless such invalidity is, in the sole determination of Landlord, essential to the rights of both parties in which event Landlord has the right to terminate this lease on written notice to Tenant.
21. Waiver of Benefits
Tenant waives the benefits of all existing and future Rent Control Legislation and Statutes and similar governmental rules and regulations, whether in time of war or not, to the extent permitted by law.
22. Miscellaneous Taxes
Tenant shall pay prior to delinquency all taxes assessed against or levied upon its occupancy of the Premises, or upon the fixtures, furnishings, equipment and all other personal property of Tenant located in the Premises, if nonpayment thereof shall give rise to a lien on the Property, and when possible Tenant shall cause said fixtures, furnishings, equipment and other personal property to be assessed and billed separately from the property of Landlord. In the event any or all of Tenant's fixtures, furnishings, equipment and other personal property, or upon Tenant's occupancy of the Premises, shall be assessed and taxed with the property of Landlord, Tenant shall pay to Landlord its share of such taxes within ten (10) days after delivery to Tenant by Landlord of a statement in writing setting forth the amount of such taxes applicable to Tenant's fixtures, furnishings, equipment or personal property.
23. Sprinklers
If there now is or shall be installed in the Building a "sprinkler system," and such system or any of its appliances shall be damaged or injured or not in proper working order by reason of any act or omission of the Tenant, Tenant's agents, servants, employees, licensees or visitors, the Tenant shall forthwith restore the same to good working conditions at its own expense; and if the Board of Fire Underwriters of Fire Insurance Exchange or any bureau, department or official of the state or city government, require or recommend that any changes, modifications, alterations or additional sprinkler heads or other equipment be made or supplied solely by reason of the Tenant's business, or the location of partitions, trade fixtures, or other contents, of the Premises requested, required or installed by Tenant, or if any such changes, modifications, alterations, additional sprinkler heads or other equipment, become necessary to prevent the imposition of a penalty or charge against the full allowance for a sprinkler system in the fire insurance rate as fixed by said Exchange, or by any fire insurance company, Tenant shall, at the Tenant's expense, promptly make and supply such changes, modifications, alterations, additional sprinkler head or other equipment.
24. No Estate In Land
This contract and lease shall create the relationship of landlord and tenant between Landlord and Tenant; no estate shall pass out of Landlord; and Tenant has only a usufruct which is not subject to levy and sale.
25. Security Deposit - DELETED INTENTIONALLY
26. Substitute Premises
If the Premises contain an area of 2,000 square feet or less, Landlord shall have the right at any time during the term hereof, upon giving Tenant not less than sixty (60) days prior written notice, to provide and furnish Tenant with space elsewhere in the Building of approximately the same size as the Premises and remove
and place Tenant in such space, with Landlord to pay all reasonable costs and expenses incurred as a result of such removal of Tenant. Should Tenant refuse to permit Landlord to move Tenant to such new space at the end of said sixty (60) day period, Landlord shall have the right to cancel and terminate this lease effective ninety (90) days from the date of original notification by Landlord. If Landlord moves Tenant to such new space, this lease and each and all of its terms, covenants and conditions shall remain in full force and effect and be deemed applicable to such new space, and such new space shall thereafter be deemed to be the Premises as though Landlord and Tenant had entered upon an express written amendment of this lease with respect thereto.
27. Brokerage
Tenant represents and warrants that it has dealt with no broker, agent or other person in connection with this transaction and that no broker, agent or other person brought about this transaction, other than Binswanger Southern, (N.C.) Inc., the authorized Agent of the Landlord, and Tenant agrees to indemnify and hold Landlord harmless from and against any claims by any other broker, agent or other person claiming a commission or other form of compensation by virtue of having dealt with Tenant with regard to this leasing transaction. The provisions of this Section shall survive the termination of this lease.
28. Special Stipulations
(a) No receipt of money by the Landlord from the Tenant after the termination of this lease or after the service of any notice or after the commencement of any suit, or after final judgment for possession of the Premises shall reinstate, continue or extend the term of this lease or affect any such notice, demand or suit or imply consent for any action for which Landlord's consent is required.
(b) No waiver of any default of the Tenant hereunder shall be implied from any omission by the Landlord to take any action on account of such default if such default persists or be repeated, and no express waiver shall affect any default other than the default specified in the express waiver and that only for the time and to the extent therein stated.
(c) The term "Landlord" as used in this lease, so far as covenants or agreements on the part of the Landlord are concerned, shall be limited to mean and include only the owner or owners of the Landlord's interest in this lease at the time in question, and in the event of any transfer or transfers of such interest the Landlord herein named (and in case of any subsequent transfer, the then transferor) shall be automatically freed and relieved from and after the date of such transfer of all personal liability as respects the performance of any covenants or agreements on the part of the Landlord contained in this lease thereafter to be performed.
(d) It is understood that the Landlord may occupy portions of the 3uilding in the conduct of the Landlord's business. In such event, all references herein to other tenants of the Building shall be deemed to include the Landlord as an occupant.
(e) The term "City" as used in this lease shall be understood
to mean the City in which the Property is located.
(f) All of the covenants of the Tenant hereunder shall be deemed and construed to be "conditions" as well as "covenants" as though the words specifically expressing or importing covenants and conditions were used in each separate instance.
(g) This Lease shall not be recorded by either party without the consent of the other.
(h) Neither party has made any representations or promise, except as contained herein, or in some further writing signed by the party making such representation or promise.
(i) In the absence of fraud, no person, firm or corporation, or the heirs, legal representatives, successors and assigns, respectively, thereof, executing this lease as agent, trustee or in any other representative capacity shall ever be deemed or held individually liable hereunder for any reason or cause whatsoever.
(j) In event of variation or discrepancy, the Landlord's original copy of the lease shall control.
(k) Each provision hereof shall extend to and shall, as the case may require, bind and inure to the benefit of the Landlord and the Tenant and their respective heirs, legal representatives and successors, and assigns in the event this lease has been assigned with the express, written consent of the Landlord.
(l) If because of any act or omission of Tenant, its employees, agents, contractors, or subcontractors, any mechanic's lien or other lien, charge or order for the payment of money shall be filed against Landlord, or against all or any portion of the Premises, or the Building of which the Premises are a part, Tenant shall, at its own cost and expenses, cause the same to be discharged of record, within thirty (30) days after the filing thereof, and Tenant shall indemnify and save harmless Landlord against and from all costs, liabilities, suits, penalties, claims and demands, including reasonable attorneys' fees resulting therefrom.
(m) It is understood and agreed that this Lease shall not be binding until and unless all parties have signed it.
(n) Landlord and Tenant, by execution of this Agreement, represent and warrant to each other that they are duly organized and existing under applicable laws as set forth hereinabove and are in good standing under such laws; and, that each has the requisite legal authority to own and operate its properties and assets, to carry on its business as presently conducted, and to execute this Lease.
(o) The provisions of this indenture shall be construed in accordance with and governed by the laws of the state of North Carolina. References to this Lease or this indenture shall refer to this document. Reference to Landlord or Tenant, whenever consistent with the context of this Lease shall include the plural or singular number, masculine, feminine or neuter gender. In the absence of specific provisions to the contrary, the party upon whom an obligation is imposed by this Lease shall perform the
obligation at its own expense. Paragraph headings relating to the contents of particular paragraphs are inserted only for the purpose of convenience and are not to be construed as parts of the particular paragraphs to which they refer. All of the provisions of this Lease are to be construed as covenants and agreements as though the words importing such covenants and agreements were used in each paragraph.
29. Subordination
(a) This Lease is subject and subordinate to each and every trust indenture, deed of trust and mortgage (collectively the "Mortgages") which now affects the Property, and the Building, and to all renewals, extensions, supplements, amendments, modifications, consolidations, and replacements thereof or thereto, substitutions therefor, and advances made thereunder. Landlord shall employ its best efforts to obtain from the holder or holders of the Mortgages a Non-Disturbance Agreement (as defined below). Tenant shall subordinate this Lease to the lien of any subsequent mortgagee or lien holder and so long as Tenant is not in default of this Lease, such subordination shall be conditioned upon the delivery to Tenant of an agreement by mortgagee or lienholder that it shall not disturb Tenant's possessory rights in the Premises (a "Non-Disturbance Agreement").
(b) If at any time prior to the expiration of the Term, any Superior Lease shall terminate or be terminated for any reason, Tenant agrees, at the election and upon demand of any owner of the Property or the Building, or the lessor under any such Superior Lease, or of any mortgagee in possession of the Property or the Building, to attorn, from time to time, to any such owner, lessor or mortgagee, upon the then executory terms and conditions of this Lease, for the remainder of the term originally demised in this Lease, provided that such owner, lessor or mortgagee, as the case may be or receiver caused to be appointed by any of the foregoing, shall not then be entitled to possession of the Premises. The provisions of this subsection (b) shall enure to the benefit of any such owner, lessor or mortgagee, shall apply notwithstanding that, as a matter of law, this Lease may terminate upon the termination of any such Superior Lease, and shall be self-operative upon any such demand, and no further instrument shall be required to give effect to said provisions. Tenant, however, upon demand of any such owner, lessor or mortgagee, agrees to execute, from time to time, instruments in confirmation of the foregoing provisions of this subsection (b), satisfactory to any such owner, lessor or mortgagee, acknowledging such attornment and setting forth the terms and conditions of its tenancy. Nothing contained in this subsection (b) shall be construed to impair any right otherwise exercisable by any such owner, lessor or mortgagee.
30. Option to Renew
Provided Tenant is not then in default under any of the terms, conditions
and covenants of this Lease, Tenant shall have the right and privilege, at its
election, to renew this Lease for one (1) further term of three (3) years (the
"Renewal Period") by giving Landlord written notice of its election to do so
(the "Election"), at any time on or before one hundred eighty (180)
days prior to the end of the then existing Term. Such renewals shall be on the same terms and conditions (except for the Election) as herein provided for the Primary Term, except that the minimum annual rent during such Renewal Periods shall be at the prevailing market rate.
31. Right of First Offer.
Provided Tenant is not in default and has performed all of its obligations hereunder, Tenant shall have the first opportunity to lease approximately 18,157 square feet of space known as Suite 240 (the "Space") which Space is outlined on the attached Exhibit "E". Upon notification in writing by Landlord of the availability of the Space, Tenant shall have ten (10) days in which to elect in writing to Lease the Space. Should Tenant elect to exercise this right of first offer, the annual rental rate shall be at the prevailing market rate.
Exhibits "A" through "E", are attached hereto and become part of this lease.
IN WITNESS WHEREOF, Landlord and Tenant have respectively signed and sealed this lease as of the day and year first above written.
LANDLORD:
ONE TRIAD CENTER ASSOCIATES,
By: /s/ Illegible ------------------------------------ Partner |
TENANT:
ANALOG DEVICES, INC.
By: /s/ William A. Martin ------------------------------------ Treasurer |
CORPORATE SEAL
ATTEST: /s/ WAWise ----------------------------- Asst. Secretary |
FIRST AMENDMENT TO OFFICE LEASE
THIS FIRST AMENDMENT TO OFFICE LEASE is made this 9th day of March, 2000 by and between LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited partnership ("Landlord") and ANALOG DEVICES, INC., a Massachusetts corporation having its principal place of business at One Triad Center, Greensboro, North Carolina ("Tenant").
BACKGROUND
A. One Triad Center Associates, a North Carolina general partnership which was Landlord's predecessor, and Tenant entered into an Office Lease dated November 14, 1997 (the "Lease"), covering premises in the building located at 7736 McCloud Road in Greensboro, North Carolina known as "One Triad Center" (the "Building"), which premises are more fully described in the Lease.
B. Tenant desires (i) to increase the amount of space leased and (ii) to extend the terra of the Lease. Subject to the provisions of this First Amendment, Landlord has agreed to such increase in the space leased and to such extension of the term. Accordingly, Landlord and Tenant desire to amend the Lease.
NOW THEREFORE, the parties hereto, in consideration of the mutual promises and covenants contained herein and in the Lease, and intending to be legally bound hereby agree that, effective on the date hereof set forth above (the "Effective Date"), the Lease is amended as follows:
1. First Additional Space: Effective on April 1, 2000, the Premises as defined in the Lease shall be expanded and increased to include the approximately 6,000 square feet located on the second floor of the Building as is outlined on the floor plan of such second floor attached hereto as Exhibit A-1. Such additional space on the second floor of the Building shall be referred to herein as the "First Additional Space". From and after April 1, 2000 until July 31, 2000, the Premises leased under the Lease shall consist of the approximately 23,734 square feet of space on the first floor of the Building originally leased pursuant to the Lease (the "Original Premises") plus the approximately 6,000 square feet of space on the second floor of the Building constituting the First Additional Space.
2. Second Additional Space: Effective on August 1, 2000, the Premises as defined in the Lease shall be expanded and increased to include the approximately 12,157 square feet located on the second floor of the Building as is outlined on the floor plan of such second floor attached hereto as Exhibit A-2. Such additional space on the second floor of the Building shall be referred to herein as the "Second Additional Space." From and after August 1, 2000 until the expiration of the Term, the Premises leased under the Lease shall consist of the approximately 23,734 square feet of space, on the first floor of the Building constituting the Original Premises, the approximately 6,000 square feet of space on the second floor of the Building constituting the First Additional Space, and the approximately 12,157 square feet of space on the second floor of the Building constituting the Second Additional Space.
3. Extension of Term: The term and duration of the Lease (for all of the Premises including without limitation the Original Premises, the First Additional Space and the Second Additional Space) shall extend to and including December 31, 2002.
4. Increases in Minimum Annual Rent: (a) Effective with the monthly installment of annual rent due on April 1, 2000. and continuing to and including the monthly installment of minimum annual rent due on June 1, 2000, the amount of each of the monthly installments of minimum annual rent due from Tenant to Landlord shall be increased to Forty Thou sand Eight Hundred Nine and 92/100 Dollars ($40,809.92).
(b) Effective on July 1, 2000 and on August 1, 2000 and again on July 1, 2001, and July 1, 2002, the minimum annual rents due from Tenant to Landlord shall be increased so that the minimum annual rents due under the Lease and the monthly installments thereof shall be as follows:
Monthly Minimum Installment Time Period Annual Rent Amount ----------- ----------- ----------- 07/01/00 through 07/31/00 $504,288.64 $42,024.05 08/01/00 through 06/30/01 $710,471.36 $59,205.95 07/01/01 through 06/30/02 $731,835.77 $60,986.31 07/01/02 through 12/31/02 $753,619.09 $62,801.56 |
(Inasmuch as Landlord and Tenant have agreed to the foregoing increases in the minimum annual rents due under the Lease, the provisions of Section 2(b) of the Lease are hereby deleted.)
(c) The monthly installments of minimum annual rent due pursuant to this Section 4 shall be in addition to the additional rental payments due pursuant to Section 3 of the Lease and Section 5 of this Amendment with respect to Tenant's Share of Operating Expenses.
5. Estimated Additional Rent With Respect to Tenant's Share of Operating Expenses and Taxes:
(a) Landlord shall provide Tenant with a reconciliation of the estimated additional rental payments made by Tenant during the calendar year 2000, if any, with the actual amount of Tenant's Share of Operating Expenses and Taxes for the calendar year 2000. For the purposes of determining the actual amount of Tenant's Share of Operating Expenses and Taxes for the calendar year 2000, Tenant's Proportionate Share of Operating Expenses and Taxes shall be: (i) 33.28? for the period January 1, 2000 through March 31, 2000; (ii) 41.69% for the period April 1, 2000 through July 31, 2000; and (iii) 58.74% for the period August 1, 2000 through December 31, 2000.
(b) For calendar years 2001 and beyond occurring during the term of the Lease as extended hereby, Tenant shall pay to Landlord as additional rent due with respect to Tenant's Proportionate Share of Operating Expenses and Taxes the sums due pursuant to Section 3 of the Lease using 58.74% as Tenant's Proportionate Share of Operating Expenses and Taxes.
For the purposes of computing the estimated monthly installments of additional rent due for the calendar year 2001 from Tenant pursuant to Section 3 of the Lease, Landlord may assess. Tenant an amount equal to 58.74% of the excess of the actual Operating Expenses and Taxes for the entire Building for the calendar year 2000 above the Base Year (1998) Operating Expenses and Taxes for the entire Building.
6. Refurbishment of First Additional Space & Second Additional Space; Tenant Allowance: Tenant acknowledges and agrees that, except for the payment to Tenant of the Tenant Allowance as provided for in this Section 6, Landlord is under no duty to make repairs, alterations, improvements, refurbishments or decorations to the First Additional Space or to the Second Additional Space and that Tenant accepts the First Additional Space and the Second Additional Space in their present "as is" condition. Landlord acknowledges and agrees that Tenant desires to make certain non-structural alterations, refurbishments, and improvements to the First Additional Space and the Second Additional Space. Accordingly, Landlord and Tenant hereby agree as follows with respect to the alterations, refurbishments and improvements to be made by Tenant to the First Additional Space and the Second Additional Space:
(a) Promptly following the execution of this First Amendment, Tenant shall prepare and submit to Landlord for Landlord's approval which will not be unreasonably withheld Tenant's plans and specifications detailing and showing the alterations, refurbishments and improvements Tenant desires to make to the First Additional Space and the Second Additional Space. Tenant shall not make any alterations, refurbishments, or other improvements to the First Additional Space or the Second Additional Space unless and until Tenant has obtained Landlord's approval of the plans and specifications for such alterations, refurbishments and other improvements. Landlord shall not be required to approve any alterations, refurbishments or other improvements which would, in Landlord's judgment, involve a structural change in the Building, adversely impact any utility lines, communications lines, equipment or facilities in the Building serving any tenant other than Tenant, or reduce the value of the Building or of the Premises. The alterations, refurbishments, or other improvements to be made by Tenant to the First Additional Space and the second Additional Space pursuant to plans and specifications approved by Landlord shall be referred to herein as the "Approved Alterations".
(b) From and after the Effective Date of this Amendment until the Premises are increased to include the First Additional Space and the Second Additional Space as provided for herein, Landlord shall permit Tenant and Tenant's approved contractors and agents reasonable access to the First Additional Space and the Second Additional Space at such times as specified by Landlord for the purposes of planning and completing the Approved Alterations. Tenant's access to First Additional Space and to the Second Additional Space pursuant to this provision shall be at Tenant's own risk, expense and responsibility and shall be subject to such rules, restrictions and regulations governing such access as Landlord may reasonably impose.
(c) at least ten (10) days prior to commencement of the Approved Alterations work, Tenant shall deliver to Landlord a list of all contractors with whom Tenant has contracted or intends to contract for the accomplishment of the Approved Alterations together with a certificate of insurance for each of Tenant's contractors evidencing adequate insurance coverage and naming Landlord and Landlord's agent as additional insureds. All contractors engaged by
Tenant to perform the Approved Alterations are subject to Landlord's prior approval which shall not be unreasonably withheld.
(d) Landlord and its Agent shall have the right to conduct various walk- through inspections of the First Additional Space and of the Second Additional Space from time to time to determine the status of the Approved Alterations.
(e) Any warranties from Tenant's contractor(s) with respect to the Approved Alterations shall be for the benefit of Landlord as well as Tenant and Tenant shall deliver such warranties to Landlord upon receipt.
(f) All construction work comprising the Approved Alterations shall be done in a good and workmanlike manner, shall comply at the time of completion with all laws, ordinances, rules, regulations, and legal requirements applicable thereto, and shall be accomplished promptly and in an expeditious manner. Tenant shall be responsible for applying for and obtaining any and all governmental permits and authorizations as may be necessary to accomplish the Approved Alterations and Tenant shall accomplish the Approved Alterations in a manner so as not to disturb or disrupt any other tenant or occupant of the Building. Tenant shall deliver to Landlord upon Landlord's request copies of all permits and licenses required to be issued by any governmental authority in connection with Tenant's construction of the Approved Alterations as well as certificates of occupancy or compliance upon the completion thereof.
(g) Tenant shall pay promptly any contractors and materialmen who supply labor, work or materials to Tenant with respect to the Approved Alterations and shall take all steps permitted by law in order to avoid the imposition of any mechanic's lien upon all or any portion of the Building or upon the land upon which it is located. Should any such lien or notice of lien be filed for work performed by Tenant, Tenant shall bond against or discharge the same within five (5) days after Tenant has notice that the lien or claim is filed regardless of the validity of such lien or claim. Nothing contained herein is intended to authorize Tenant to do or cause any work to be done or materials supplied for the account of the Landlord, all of the same to be sole for Tenant's account and at Tenant's risk and expense. Except for the Tenant Allowance to be paid by Landlord to Tenant as provided below, Tenant shall pay all costs and expenses incurred by Tenant in completing and accomplishing the Approved Alterations.
(h) In order to reimburse Tenant for a portion of the costs incurred by Tenant in completing the Approved Alterations, Landlord shall pay to Tenant an allowance equal to the lesser of (i) $40,000 or (ii) the actual out of pocket hard cots and expenses incurred by Tenant in completing the Approved Alterations. (Such lesser amount shall be referred to herein as the "Tenant Allowance".) Landlord shall disburse the Tenant Allowance to Tenant within forty-five (45) days following Landlord's receipt from Tenant of a written request for such disbursement provided that at the time such request is made the following conditions shall have then been met: (I) the Approved Alterations shall have been fully completed by Tenant in accordance with the plans and specifications approved by Landlord; (2) a certificate of compliance or of occupancy shall have been issued with respect to at least the First Additional Space by the appropriate governmental authority; (3) Tenant shall have occupied at least the First Additional Space and shall continue in occupancy of the Original Premises; (4) no event of default by Tenant shall
exist under the Lease; and (5) Tenant shall have paid all costs and expenses incurred in connection with the Approved Alterations so that no liens for such work may attach to the Building. Tenant shall submit to Landlord together with Tenant's request for the disbursement of the Tenant Allowance copies of paid invoices, receipts, and statements sufficient to verify the costs and expenses incurred by Tenant in completing the Approved Alterations and from which the amount of the Tenant Allowance can be determined together with such other information about such costs and expenses as Landlord may reasonably request.
7. Substitution of New Renewal Option. Section 30 of the Lease entitled "Option to Renew" is deleted in its entirety and the following is substituted in lieu thereof:
Multiple Options To Extend Term (Fixed Amount Rental Increases). Provided
that Landlord has not given Tenant notice of default more than two (2) times
preceding the Expiration Date, and that there then exists no event of default by
Tenant under this lease nor any event that with the giving of notice and/or the
passage of time would constitute a default, Tenant shall have the right and
option to extend the Term for two (2) additional periods of thirty-six (36)
months each, exercisable by giving Landlord prior written notice, at least ten
(10) months in advance of the Expiration Date, of Tenant's election to extend
the Term; it being agreed that time is of the essence and that this option is
personal to Tenant and non-transferable to any assignee or sublessee. Such
extension shall be under the same terms and conditions as provided in this lease
except as follows:
(a) the additional period shall begin on the Expiration Date and thereafter the Expiration Date shall be deemed to be the third anniversary thereof.
(b) There shall be one additional extension option remaining after the exercise of the first extension option and no further options to extend after the exercise of the second extension option.
(c) The Minimum Annual Rent payable by Tenant shall be in the following amounts:
First Extension Option Minimum Monthly Lease Period Annual Rent Installment ------------ ---------------- ----------- 01/01/03 through 06/30/03 $753,619.09 $62,801.56 07/01/03 through 06/30/04 $776,240.23 $64,686.69 07/01/04 through 06/30/05 $799,699.19 $66,641.60 07/01/05 through 12/31/05 $823,577.06 $68,631.42 |
Second Extension Option Minimum Monthly Lease Period Annual Rent Installment ------------ ---------------- ----------- 01/01/06 through 06/30/06 $823,577.06 $68,631.42 07/01/06 through 06/30/07 $848,292.75 $70,691.06 07/01/08 through 06/30/08 $873,846.26 $72,820.52 07/01/08 through 12/31/08 $900,237.59 $75,019.80 |
8. Substitution of New Expansion Option. Section 31 of the Lease entitled "Right of First Refusal is deleted in its entirety and the following is substituted in lieu thereof:
Additional Contiguous Space. If and when the space which is contiguous to the Premises which is shown as "Expansion Space" on Exhibit A-2 (the "Expansion Space") first becomes avail able for rental during the term of this lease and provided that Landlord has not given Tenant notice of default more than two (2) times during the immediately preceding twelve (12) months, and that there then exists no event of default by Tenant under this lease nor any event that with the giving of notice and/or the passage of time would constitute a default, Tenant shall have the right: of first offer to lease all of the Expansion Space, subject to the following:
(a) Landlord shall notify Tenant when the Expansion Space first becomes available for rental by any party other than the tenant then in occupancy of the Expansion Space and Tenant shall have seven (7) days following receipt of such notice within which to notify Landlord in writing that Tenant is interested in negotiating terms for leasing such Expansion Space and to have its offer considered by Landlord prior to the leasing by Landlord of the Expansion Space to a third party. If Tenant notifies Landlord within such time period that Tenant is so interested, then Landlord and Tenant shall have 30 days following Landlord's receipt of such notice from Tenant within which to negotiate mutually satisfactory terms for the leasing of the Expansion Space by Tenant and to execute an amendment to this lease incorporating such terms or a new lease for the Expansion Space.
(b) If Tenant does not notify Landlord within such 7 days of its interest in leasing the Expansion Space or if Tenant does not execute such amendment or lease within such 30 (lays, if applicable, then this right of first offer to lease the Expansion Space will lapse and be of no further force or effect and Landlord shall have the right to lease all of part of the Expansion Space to any other party at any time on any terms and conditions acceptable to Landlord.
(c) This right of first offer to lease the Expansion Space is a one-time right if and when the Expansion Space first becomes available, is personal to Tenant, and is nontransferable
9. No Brokers: Tenant represents and warrants to Landlord that Tenant has not been represented by any real estate agent or broker in connection with the negotiation or execution of this First Amendment and that no real estate agent or broker is entitled to a commission with respect to this First Amendment as the result of any agreement or action of Tenant. In the event that any real estate agent or broker claims or asserts that it is entitled to a commission with respect to this First Amendment based upon any agreement with Tenant or any action of Tenant, Tenant shall indemnify, defend and hold Landlord harmless with respect to such claim or assertion.
10. Reaffirmation of Lease: Except as expressly modified herein, the terms and conditions of the Lease shall remain unchanged and in full force and effect. All attached exhibits referred to herein are made a part of this Amendment and the Lease. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the day and year first above written.
LANDLORD:
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust, Sole
General Partner
By: /s/ Lawrence D. Gildea ------------------------------------ Name: Lawrence D. Gildea Title: Senior Vice President |
TENANT:
ANALOG DEVICES, INC.
By: /s/ William A. Martin ------------------------------------ Name: William A. Martin Title: Treasurer Attest: /s/ WA. Wise -------------------------------- Name: WA. Wise Title: Corp. Counsel |
SECOND AMENDMENT TO OFFICE LEASE
THIS SECOND AMENDMENT TO OFFICE LEASE is made this 25th day of March. 2002 by and between LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited partnership ("Landlord") and ANALOG DEVICES, INC., a Massachusetts corporation having its principal place of business at One Triad Center, Greensboro, North Carolina ("Tenant").
BACKGROUND
A. One Triad Center Associates, a North Carolina general partnership which was Landlord's predecessor, and Tenant entered into an Office Lease dated November 14, 1997 (the "Lease"), covering premises in the building located at 7736 McCloud Road in Greensboro, North Carolina known as "One Triad Center" (the "Building"), which premises are more fully described in the Lease.
B. In accordance with the First Amendment to the Lease, Tenant (i) increased the amount of space leased to a total of 41,891 rentable square feet and (ii) extended the term of the Lease through December 31, 2002. Subject to the provisions of the First Amendment, Landlord agreed to such increase in the space leased and to such extension of the term.
C. In lieu of exercising its option to extend the term of the Lease pursuant to Section 30 of the Lease, Tenant desires to extend the term of the Lease by way of this Amendment. Subject to the provisions of this Second Amendment, Landlord has agreed to such extension of the term. Accordingly, Landlord and Tenant desire to amend the Lease.
NOW THEREFORE, the parties hereto, in consideration of the mutual promises and covenants contained herein and in the Lease, and intending to be legally bound hereby agree that, effective on the date hereof set forth above (the "Effective Date"), the Lease is amended as follows:
1. Extension of Term: The term and duration of the Lease (for all of the Premises including without limitation the Original Premises, the First Additional Space and the Second Additional Space as detailed in the First Amendment for a total of 41,891 rentable square feet) shall extend to and including December 31, 2005.
2. Minimum Annual Rent: Effective on January 1, 2003 the minimum annual rents due from Tenant to Landlord shall be so that the minimum annual rents due under the Lease and the monthly installments thereof shall be as follows through December 31, 2005:
Monthly Minimum Installment Time Period Annual Rent Amount ----------- ----------- ----------- 01/01/03 through 12/31/04 $736,443.78 $61,370.32 01/01/05 through 12/31/05 $758,537.09 $63,211.42 |
The monthly installments of minimum annual rent due pursuant to this
Section 2 shall be in addition to the additional rental payments due pursuant to
Section 3 of the Lease and Section 5 of the First Amendment with respect to
Tenant's Share of Operating Expenses.
3. Estimated Additional Rent With Respect to Tenant's Share of Operating Expenses and Taxes:
Tenant shall pay to Landlord as additional rent due with respect to Tenant's Proportionate Share of Operating Expenses and Taxes the sums due pursuant to Section 3 of the Lease using 58.74% as Tenant's Proportionate Share of Operating Expenses and Taxes.
4. Acceptance of Premises. Tenant accepts the space in its present "as is" condition.
5. Automatic Renewals. Section 30 of the Lease entitled "Option to Renew," as amended by Section. 7 of the First Amendment, is deleted in its entirety and the following is substituted in lieu thereof:
Automatic Term Renewals (Fixed Amount Rental Increases). The term of this
Lease shall automatically be extended for an additional period of twenty-four
(24) months terminating on December 31, 2007 (the "First Renewal Term") unless
Tenant shall provide Landlord written notice, at least six (6) months in advance
of, the Expiration Date, of Tenant's election not to extend the term. In
addition, the term of this Lease, as extended by the First Renewal Term, shall
automatically be extended for an additional period of thirty-six (36) months
terminating on December 31, 2010 (the "Second Renewal Term") unless Tenant shall
provide Landlord written notice. at least six (6) months in advance of the
Expiration Date, as extended by the First Renewal Term, of Tenant's election not
to extend the term. Notwithstanding the foregoing, Landlord may nullify Tenant's
right to extend the term as herein provided by written notice to Tenant during
the six (6) month period prior to the Expiration Date, as extended, in the event
that Landlord has given Tenant notice of default more than two (2) times
preceding the Expiration Date or there exists an event of default by Tenant
under this Lease or any event that with the giving of notice and/or the passage
of time would constitute a default. Landlord and Tenant agree that time is of
the essence and the renewal options are personal to Tenant and nontransferable
to any assignee or sublessee. The First Renewal Term and Second Renewal Term
shall be under the same terms and conditions as provided in this lease except as
follows:
(a) The First Renewal Term shall begin on the Expiration Date and thereafter the Expiration Date shall be deemed to be the second anniversary thereof.
(b) The Second Renewal Term shall begin on the Expiration Date, as extended by the First Renewal Term, and thereafter the Expiration Date shall be deemed to be the third anniversary thereof.
(c) There shall be no options to extend or renew the term remaining after the expiration of the Second Renewal Term.
(d) The Minimum Annual Rent payable by Tenant shall be in the following amounts:
First Renewal Term
Minimum Monthly Lease Period Annual Rent Installment ------------ ----------- ----------- 01/01/06 through 12/31/06 $781,293.20 $65,107.76 01/01/07 through 01/01/07 $804,732.00 $67,061.00 |
Second Renewal Term
Minimum Monthly Lease Period Annual Rent Installment ------------ ----------- ----------- 01/01/08 through 12/31/08 $828,873.96 $69,072.83 01/01/09 through 12/31/09 $853,740.18 $71,145.02 01/01/10 through 12/31/10 $879,352.38 $73,279.33 |
6. Amendment of Expansion Option. Section 31 of the Lease entitled "Right of First Refusal," as amended by Section 8 of the First Amendment, is hereby deleted and the following substituted in lieu thereof:
Additional Space. If and when all or any part of the space shown as "Expansion Space" on Exhibit A-2 (the "Expansion Space") first becomes available for rental during the term of this lease and provided that Landlord has not given Tenant notice of default more than two (2) times during the immediately preceding twelve (12) months, and that there then exists no event of default by Tenant under this lease nor any event that with the giving of notice and/or the passage of time would constitute a default, Tenant shall have the right of first offer to lease all of the Expansion Space available for rental at such time, subject to the following:
(a) Landlord shall notify Tenant when all or a part of the Expansion Space first becomes available for rental by any party other than the tenant then in occupancy of the Expansion Space (the "Available Expansion Space") and Tenant shall have fourteen (14) days following receipt of such notice within which to notify Landlord in writing that Tenant is interested in negotiating terms for leasing such Available Expansion Space and to have its offer considered by Landlord prior to the leasing by Landlord of the Available Expansion Space to a third party. If Tenant notifies Landlord within such time period that Tenant is so interested, then Landlord and Tenant shall have sixteen (16) days following Landlord's receipt of such notice from Tenant within which to negotiate mutually satisfactory terms for the leasing of the Available Expansion Space by Tenant and to execute an amendment to this lease incorporating such terms or a new lease for the Available Expansion Space.
(b) If Tenant does not notify Landlord within such fourteen (14) days of its interest in leasing the Available Expansion Space or if Tenant does not execute such amendment or lease within such sixteen (16) days, if applicable, then this right of first offer to lease the Available Expansion Space will lapse and be of no further force or effect and Landlord shall have the right to lease all of part of the Available Expansion Space to any other party at any time on any terms and conditions acceptable to Landlord.
(c) This right of first offer to lease the Expansion Space is a one-time right if and when the Expansion Space first becomes available, is personal to Tenant, and is nontransferable; provided if only part of the Expansion Space becomes available for rental, Tenant's failure to exercise its right to lease such part of the Expansion Space shall not constitute a waiver of its right to lease the remaining portion of the Expansion Space pursuant to this Section 31 at such time as the remaining Expansion Space becomes available.
7. HVAC Service: The first two full sentences of Section 5(c) of the Lease are hereby deleted and the following substituted in lieu thereof:
"Landlord shall furnish heat, ventilation and air-conditioning to the Premises, Monday through Friday from 6:30 A.M. to 6:30 P.M., and on Saturday from 6:30 A.M. to 1:00 P.M., legal holidays excepted. Heat and air-conditioning required by Tenant at times other than those mentioned above shall be supplied upon reasonable prior notice to Landlord at the rate of $30.00 per hour."
8. No Brokers: Tenant represents and warrants to Landlord that Tenant has not been represented by any real estate agent or broker in connection with the negotiation or execution of this Second Amendment and that no real estate agent or broker is entitled to a commission with respect to this Second Amendment as the result of any agreement or action of Tenant. In the event that any real estate agent or broker claims or asserts that it is entitled to a commission with respect to this Second Amendment based upon any agreement with Tenant or any action of Tenant, Tenant shall indemnify, defend and hold Landlord harmless with respect to such claim or assertion.
9. Reaffirmation of Lease: Except as expressly modified herein, the terms and conditions of the Lease shall remain unchanged and in full force and effect. All attached exhibits referred to herein are made a part of this Amendment and the Lease. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Lease.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the day and year first above written.
LANDLORD:
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust, Sole General
Partner
By: /s/ Lawrence D. Gildea ------------------------------------ Name: Lawrence D. Gildea Title: Senior Vice President |
TENANT:
ANALOG DEVICES, INC.
By: /s/ William A. Martin ------------------------------------ Name: William A. Martin Title: Treasurer Attest: Name: /s/ Michael Ferdenzi Title: Corporate Facilities Manager / Real Estate |
THIRD AMENDMENT TO OFFICE LEASE
THIS THIRD AMENDMENT TO OFFICE LEASE is made this 21st day of June, 2005 by and between LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited partnership ("Landlord") and ANALOG DEVICES, INC., a Massachusetts corporation having its principal place of business at One Triad Center, Greensboro. North Carolina ("Tenant").
BACKGROUND
A. One Triad Center Associates, a North Carolina general partnership which was Landlord's predecessor, and Tenant entered into an Office Lease dated November 14, 1997 (the "Lease"), covering premises in the building located at 7736 McCloud Road in Greensboro, North Carolina known as "One Triad Center" (the "Building"), which premises are more fully described in the Lease.
B. In accordance with the First Amendment to the Lease, Tenant (i) increased the amount of space leased to a total of 41,891 rentable square feet and (ii) extended the term of the Lease through December 31, 2002. Subject to the provisions of the First Amendment, Landlord agreed to such increase in the space leased and to such extension of the term.
C. In lieu of exercising its option to extend the term of the Lease pursuant to Section 30 of the Lease, Tenant extended the term of the Lease, through December 31, 2005, by way of the Second Amendment. Subject to the provisions of the Second Amendment, Landlord agreed to such extension of the term.
D. Tenant now desires to modify the terms of the option to extend the term of the Lease as noted in the Second Amendment, and Landlord has agreed to such modification. Accordingly, Landlord and Tenant desire to amend the lease by way of this Third Amendment.
NOW THEREFORE, the parties hereto, in consideration of the mutual promises and covenants contained herein and in the Lease, and intending to be legally bound hereby agree that, effective on the date hereof set forth above (the "Effective Date"), the Lease is amended as follows:
1. Section 5 of the Second Amendment is deleted and replaced with the following:
Automatic Term Renewals (Fixed Amount Rental Increases). The term of this
Lease shall automatically be extended for an additional period of twenty-seven
(27) months terminating on March 31, 2008 (the "First Renewal Term") unless
Tenant shall provide Landlord written notice, at least three (3) months in
advance of the Expiration Date (which is no later than September 30, 2005), of
Tenant's election not to extend the term. In addition, the term of this Lease,
as extended by the First Renewal Term, shall automatically be extended for an
additional period of thirty-six (36) months terminating on March 31, 2011 (the
"Second Renewal Term") unless Tenant shall provide Landlord written notice. at
least six (6) months in advance of the Expiration Date (which is no later than
September 30, 2007). as extended by the First Renewal Term, of Tenant's election
not to extend the term. Notwithstanding the foregoing, Landlord may nullify
Tenant's right to extend the term as herein provided by written notice to Tenant
during the six (6) month period prior to the Expiration Date, as extended, in
the event that Landlord has given Tenant notice of default more than two (2)
times preceding the Expiration Date or there
exists an event of default by Tenant under this Lease or any event that with the giving of notice and/or the passage of time would constitute a default. Landlord and Tenant agree that time is of the essence and the renewal options are personal to Tenant and non-transferable to any assignee or sublessee. The First Renewal Term and Second Renewal Term shall be under the same terms and conditions as provided in this lease except as follows:
(a) The First Renewal Term shall begin on the Expiration Date and thereafter the Expiration Date shall be deemed to be the second anniversary thereof.
(b) The Second Renewal Term shall begin on the Expiration Date, as extended by the First Renewal Term, and thereafter the Expiration Date shall be deemed to be the third anniversary thereof.
(c) There shall be no options to extend or renew the term remaining after the expiration of the Second Renewal Term.
(d) The Minimum Annual Rent payable by Tenant shall be in the following amounts:
First Renewal Term
Minimum Monthly Lease Period Annual Rent Installment ------------ ----------- ----------- 01/01/06 through 12/31/06 $781,293.20 $65,107.76 01/01/07 through 03/31/08 $804,732.00 $67,061.00 |
Second Renewal Term
Minimum Monthly Lease Period Annual Rent Installment ------------ ----------- ----------- 04/01/08 through 03/31/09 $828,873.96 $69,072.83 04/01/09 through 03/31/10 $853,740.18 $71,145.02 04/01/10 through 03/31/11 $879,352.38 $73,279.33 |
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the day and year first above written.
LANDLORD:
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust, Sole
General Partner
By: /s/ Lawrence D. Gildea ------------------------------------ Name: Lawrence D. Gildea Title: Senior Vice President |
TENANT:
ANALOG DEVICES, INC.
By: /s/ William A. Martin ------------------------------------ Name: ---------------------------------- Title: --------------------------------- Attest: Name: /s/ Michael Ferdenzi Title: CORP REAL ESTATE |
(LIBERTY PROPERTY TRUST LOGO)
November 29, 2005
Mr. Jim Hrycaj
Analog Devices, Inc.
7910 Triad Drive
Greensboro, NC 27409
RE: FOURTH AMENDMENT TO OFFICE LEASE DATED OCTOBER 26, 2005 FOR PREMISES LOCATED AT 7736 MCCLOUD ROAD, GREENSBORO, NC 27409 BETWEEN LIBERTY PROPERTY LIMITED PARTNERSHIP AS ("LANDLORD") AND ANALOG DEVICES, INC. AS ("TENANT")
Dear Jim:
This is to confirm the following with respect to the Fourth Amendment to Office Lease:
COMMENCEMENT DATE: January 1, 2006 EXPIRATION DATE: MARCH 31, 2008 |
As set forth in the Lease, Minimum Annual Rent and Annual Operating Expenses are due on or before the Commencement Date for the period from the Commencement Date until the first day of the next calendar month unless the Commencement Date is the first day of the calendar month. Accordingly, the following amounts are due on or before the Commencement Date:
MONTHLY RENT INSTALLMENT: 531,662.61(REVISED) MONTHLY OPERATING PAYMENT: +20,701.14(REVISED) ---------- TOTAL MONTHLY PAYMENT: $52,363.75(REVISED) ---------- |
Thereafter, commencing February 1, 2006, regular monthly payments will be due on the first in the following amounts until adjusted in accordance with the Lease:
MONTHLY RENT INSTALLMENT: 531,662.61 (REVISED) MONTHLY OPERATING PAYMENT: +20,701.14 (REVISED) ---------- TOTAL MONTHLY PAYMENT: 552,363.75 (REVISED) ---------- |
If you disagree with any of the information set forth above, please advise us in writing within five days of your receipt of this letter; otherwise the Commencement Date and the Expiration Date of the Lease will be as set forth above.
Sincerely,
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust, Sole General
Partner
Cc: Michael Ferdenzi
Cc: Mike Tierney
Enhancing people's lives through extraordinary work environments
WWW.LIBERTYPROPERTY.COM - NYSE; LRY
FLORIDA - ILLINOIS - MARYLAND - Michigan - Minnesota - New Jersey - North Carolina - Pennsylvania - South Carolina - Texas - Virginia - Wisconsin - United Kingdom
FOURTH AMENDMENT TO OFFICE LEASE
THIS FOURTH AMENDMENT TO OFFICE LEASE IS made 24th day of October, 2005 by and between LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited partnership ("Landlord") and ANALOG DEVICES, INC., a Massachusetts corporation having its principal place of business at One Triad Center, Greensboro, North Carolina ("Tenant").
BACKGROUND
A. One Triad Center Associates a North Carolina general partnership which was landlord's predecessor, and Tenant entered into an Office Lease dated November 14, 1997 (the -Original Lease"), covering premises in the building located AT 7736 McCloud Road in (Greensboro, North Carolina known as "One 'triad Center" (the "Building"), which premises are pore fully described in the Original Lease as amended as set forth below.
B. Landlord acquired the Building from One Triad Center Associates and thereafter Landlord and Tenant entered into a First Amendment. to Office Lease dated March 9. 2000 by which the Landlord and tenant agreed to amend the Original Lease, among other things, to increase the size of the Premises leased to Tenant and to extend the term of the Original Lease to and including December 31, 2002 (the "First Amendment").
C. Subsequent to the execution of the First Amendment, Landlord and Tenant entered into a Second Amendment to Office I &rise dated March 25, 2002 by which the Original Lease was further amended, among other things, to extend the term thereof through and including December 31, 2005 (the -Second amendment").
D. Subsequent to the execution of the Second Amendment, Landlord and tenant entered into a Third Amendment to Office Lease dated June 21. 2005 by which the provisions of the Second Amendment which provided for an automatic renewal of the term of the Lease were modified (the -Third Amendment"). (As used herein, the term "Lease- shall mean the Original Lease as amended by the First Amendment, the Second Amendment and the third Amendment.)
E. Tenant has provided a notice to Landlord that Tenant has elected, not to extend the min of the Lead: pursuant to the automatic renewal provisions thereof as provided for in the Third Amendment. Nonetheless, Landlord and Tenant have agreed to extend the term of the Lease for a period of twenty-seven (27) additional months beyond the current expiration date of the Lease (which is December 31,, 2005) and Landlord and Tenant desire by this Fourth Amendment to Office Lease to set forth their agreements with respect to the extension of the lean 01-11 the Lease,
NOW THEREFORE, the parties hereto. in consideration of the mutual promises and covenants contained herein and in the. Lease, and intending to be legally bound hereby, agree that, effective on the date hereof set forth above (the "Effective Date"), the Lease is amended as
1. Extension of Term: The term and duration of the Lease (for all of the Premises including without limitation the Original Premises, the First Additional Space and the Second Additional Space as detailed in the First Amendment and consisting of 41,891 rentable square feet) is hereby extended to and including March 31, 2008.
2. Minimum Annual Rent During Extended 'term: From the date hereof until December 31, 2005, Tenant shall continue to pay monthly installments of minimum annual rent mid payments of Tenant's Proportionate Share of Operating Expenses and Taxes in the amounts and in the manner as are currently provided for in the Lease. Effective with the monthly installment of minimum annual rent due on January I, 2006 and continuing through the remainder- of the term of the Lease as extended hereby, the minimum annual rents and the monthly installments thereof shall be as follows;
Monthly Minimum Installment Time Period Annual Rent Amount ----------- ----------- ----------- 01/01/06 through 12/31/06 $628,365.00 $52,363.75 01/01/07 through 03/31/08 $649,310.50 $54,109.21 |
Such monthly installments of minimum annual rent shall be due and payable on the first day of each calendar month commencing on January 1, 2006 and continuing through and including March 1, 2008 Tenant shall pay Tenant's Share of Operating Expenses and Taxes for the calendar year 2005 when and as such payment is due under the Lease unaffected by the provisions of this Fourth Amendment. Tenant shall not be obligated to pay any amount for Tenant's Share of Operating Expenses and Taxes for the calendar year, 2006 and for calendar year 2006 the installment payments of minimum annual rent as set forth above shall include whatever share of the Operating Expenses and Taxes for 2006 for which Tenant is responsible. Furthermore, Landlord agrees that calendar year 2006 shall constitute a new 'Base Year" under the i.ea5e for the purpose of computing Tenant's Share of Operating Expenses and Taxes due with respect to periods from and after December 31, 2006, Accordingly, for and with respect to each calendar year Or the term of the Lease commencing with the year 2007, there shall be due from Tenant as additional rent due under the Lease Tenant's Share of the excess of the Operating Expenses and Taxes for such year over the total of the Operating Expenses and Taxes for the year 2006. Such additional rent shall be computed and paid in the manner as provided for in Section 3 of the Original Tease except that the Base Year shall be 2006 instead of 1998 and Tenant's Share of such excess Operating Expenses and taxes shall be 58,74% of the total thereof.
"AS IS, WHERE IS": Tenant acknowledges and agrees that it has agreed to extend the term of the Lease as provided herein with the Premises in their "AS IS WHERE IS" condition mid that Landlord has not agreed to make and Landlord shall not he obligated to make any improvements or refurbishments of the Premises in order to induce Tenant to extend the term of the Lease as provided herein.
Renewal Option: Landlord and Tenant acknowledge and agree that the automatic renewal provisions as set fourth in the Third Amendment arc no longer elective inasmuch as Tenant elected not to extend the term of the Lease as provided therein. Accordingly, Section 1
of the Third Amendment and Section 5 of the Second Amendment are hereby deleted from the Lease. From and after the Effective Date hereof, the Lease shall he amended to provide to Tenant the following renewal option which shall bean lien of tiny and all other renewal rights or options currently provided in the Lease and which shall be deemed to replace and supersede Section 30 of the Original Lease and Section 7 of the First Amendment.
Option TO Extend Teem, Provided that there then exists no event of default
by Tenant under this lease which has continued beyond any applicable notice and
cure periods, tenant shall have the right and option to extend the term for one
(I) additional period of Thirty-Six (36) months, exercisable by giving Landlord
prior written notice, at least six (6) months in advance of the Expiration Date,
of Tenant's election to extend the term; it being agreed that time s of the
essence. Such extension shall be under the same terms and conditions as provided
in this lease except as follows!
(a) the additional period (referred to herein as the 'Additional Period") shall begin on the Expiration Date as set forth herein (that is, March 31, 2008) and thereafter the Expiration Date shall be deemed to be Thirty-Six (36) months after such Expiration Date (that is. March 31, 2011):
(b) all references to the term in this lease shall be deemed to mean the term as extended pursuant to this Section: and
(c) the Minimum Annual Rent payable by Tenant for such, Additional Period shall be the then current Market Rental Rate for like buildings in the Airport submarket of Greensboro, North Carolina for such Additional Period. For the purposes hereof "Market Rental Rate- shall be defined as the minimum annual base rentals that would be agreed to after arms length negotiations by a landlord and a new tenant, each of whom is willing and informed, but neither of whom is compelled, to enter into the lease transaction for premises comparable to the }'remises for a lease term equal to the Additional Period and taking into account all aspects of the Premises, including the then physical condition of the Premises, the then current market conditions for computing escalations and adjustments to hose annual rents, operating expense pass-throughs provisions, inducements and concessions customary in a new lease and other relevant economic factors of a new lease. Promptly following Tenants exercise of this renewal option, Landlord shall notify 'tenant of the rental rates that Landlord contends to be the Market Rental Rates applicable during the Additional Period. If Tenant does not object to Landlord's determination of the Market Rental Rates in writing within thirty (30) days of Landlord's notice, then Landlord's determination of the Market Rental Rates shall be deemed conclusive. if Tenant objects in writing to Landlord's determination of the Market Rental Rates within thirty (30) days of Landlord's notice, then the parties will attempt to agree upon such Market Rental Rate. If Landlord and Tenant are unable to agree upon the Market Rental Rate for the Additional Period prior to that date which is one hundred twenty (120) days prior to the commencement of the Additional Period, then the Market Rental Rate shall be determined by an arbitration proceeding conducted in accordance with the rules of American Arbitration Association for Commercial Real Estate disputes. The arbitration shall be conducted in Greensboro, North Carolina. The cost of arbitration shall he shared equally by Landlord and Tenant. If the Market Rental Rate has not been finally determined prior to the commencement of the Additional Period, then upon the
commencement of the Additional Period, Tenant shall begin paying rents in the amounts as set forth in Landlord's last offer to Tenant until such Market Rental Rate is finally determined. If such Market Rental Rate as finally determined is less than the rate at which rents have been paid by Tenant during the Additional Period from the commencement thereof until the determination Of the Market Rental Rate. then Landlord shall either refund to Tenant the amount of such overpayment or credit the amount of such overpayment to subsequent installments of rent. If the Market Rental Rate as finally determined is more that the rate at which rents have been paid by tenant during the Additional Period from the commencement thereof until the determination of the Market Rental Rate, then Tenant shall pay to Landlord an amount equal to the excess within fifteen (15) days of the determination of the Market Rental Rate.
5. No Expansion Rights. Landlord and Tenant hereby agree that from and after the Effective Date, Tenant shall not have any rights or options to expand the Premises to include any additional space. Accordingly, any and all provisions of the existing Lease granting to Tenant any right to expand the Premises or obligating Landlord to offer additional expansion, space to the Tenant are hereby deleted.
6. No Brokers: Tenant represents and warrants to Landlord that Tenant has not been represented by any real estate agent or broker in connection with the negotiation or execution of this Fourth Amendment except David Hagan of Hagan Properties Incorporated ("Tenant's Broke") and that no real estate agent or broker other than Tenant's Broker is entitled to a commission with respect to this Fourth Amendment as the result of any agreement or action of Tutuila In the event that any real estate agent or broker other than Tenant's Broker claims or asserts that it is entitled to a commission with respect to this Fourth Amendment based upon any agreement with Tenant or any action of Tenant. Tenant shall indemnify, defend and hold 1 And lo rd harmless with respect to such claim or assertion. Landlord recognizes Tenant's Broker as Tenant's real estate agent in connection with the extension of the term of the Lease provided for herein and Landlord agrees to pay a commission to Tenant's Broker pursuant and subject to a separate agreement between Landlord and Tenant's Broker providing for such commission.
7. Reaffirmation of Lease: except as expressly modified herein, the terms and conditions of the Lease shall remain unchanged and in full force and effect. Capitalized terms used herein and no otherwise defined herein shall have the meanings ascribed to them in the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Fourth Amendment to Office Lease as of the day and year first above written.
LANDLORD:
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: /s/ Lawrence D. Gildea ------------------------------------ Name: Lawrence D. Gildea Title: Senior Vice President |
'TENANT:
ANALOG DEVICES, INC.
By: /s/ William A. Martin ------------------------------------ Name: William A. Martin Title: Treasurer |
.
.
.
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
As of October 28, 2006
STATE OR OTHER JURISDICTION OF INCORPORATION OR NAME OF SUBSIDIARY ORGANIZATION ------------------------------------------------------ ------------------ Analog Devices Limited United Kingdom Analog Devices, GmbH Germany Analog Devices, SAS France Analog Devices, K.K. Japan Analog Devices ApS Denmark AudioAsics A/S Denmark Analog Devices A.B. * Sweden Analog Devices SRL Italy Analog Devices, GMBH Austria Analog Devices Korea, Ltd. Korea Integrant Technologies, Inc. Korea Analog Devices, B.V. The Netherlands Analog Devices Holdings, B.V. The Netherlands Analog Devices Nederland, B.V. The Netherlands Analog Devices (Philippines), Inc. The Philippines Analog Devices Gen. Trias, Inc. The Philippines Analog Devices Realty Holdings, Inc. (40% owned) The Philippines Analog Devices Taiwan, Ltd. Taiwan Analog Devices Hong Kong, Ltd. Hong Kong Analog Devices Pty, Ltd. Australia Analog Devices Australia Pty. Ltd. Australia Analog Devices India Private Limited India ChipLogic India Private Limited India Analog Devices Ireland, Ltd. Ireland Analog Devices International Financial Services Limited Ireland Analog Research & Development Ltd. Ireland Analog Nominees Limited Ireland Analyzed Investments, Ltd. Ireland Edinburgh Portable Compilers Limited Scotland Analog Devices Israel, Ltd. Israel Analog Development (Israel) 1996 Ltd. Israel Analog Devices (China) Co. Ltd. China Analog Devices Canada, Ltd. Canada Analog Devices S.L. Spain Analog Devices IMI, Inc. California Analog Devices ChipLogic, Inc. California Staccato Systems, Inc. California Analog Devices Foundry Services, Inc. Delaware Analog Devices Asian Sales, Inc. Delaware ADI Micromachines, Inc. Delaware Analog/ NCT Supply Ltd. (50% owned) Delaware Analog Devices International, Inc. Massachusetts |
* Also doing business as Analog Devices Aktiebolag, Suomen sivuliike
EXHIBIT 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 2-63561, 2-90023, 2-95495, 33 2502, 33-4067, 33-22604, 33-22605, 33-29484, 33-39851, 33-39852, 33-43128, 33-46520, 33-46521, 33-60642, 33-60696, 33-61427, 33-64849, 333-04771, 333-04819, 333-04821, 333-08493, 333-40222, 333-40224, 333-47787, 333-47789, 333-48243, 333-56529, 333-57444, 333-69359, 333-79551, 333-87055, 333-50092, 333-53314, 333-53828, 333-75170, 333-113510 and 333-132409, and Form S-3 Nos. 333-08505, 333-08509, 333-17651, 333-87053, 333-48928, 333-51530 and 333-53660) of Analog Devices, Inc. and in the related Prospectuses of our reports dated November 16, 2006, with respect to the consolidated financial statements and schedule of Analog Devices, Inc., Analog Devices, Inc. management's assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Analog Devices, Inc., included in this Annual Report (Form 10-K) for the year ended October 28, 2006.
/s/ Ernst & Young LLP Boston, Massachusetts November 16, 2006 |
1. | I have reviewed this Annual Report on Form 10-K of Analog Devices, Inc.; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Dated: November 20, 2006 | /s/ Jerald G. Fishman | |||
Jerald G. Fishman | ||||
President and Chief Executive Officer
(Principal Executive Officer) |
||||
1. | I have reviewed this Annual Report on Form 10-K of Analog Devices, Inc.; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Dated: November 20, 2006 | /s/ Joseph E. McDonough | |||
Joseph E. McDonough | ||||
Vice President-Finance
and Chief Financial Officer (Principal Financial and Accounting Officer) |
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(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: November 20, 2006 | /s/ Jerald G. Fishman | |||
Jerald G. Fishman | ||||
Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: November 20, 2006 | /s/ Joseph E. McDonough | |||
Joseph E. McDonough | ||||
Chief Financial Officer | ||||