SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-5560
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ALPHA INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2302115
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 SYLVAN ROAD, WOBURN, MASSACHUSETTS 01801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 935-5150
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT OCTOBER 25, 1998
COMMON STOCK, PAR VALUE $.25 PER SHARE 10,541,089
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Alpha Industries, Inc. and Subsidiaries
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TABLE OF CONTENTS
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PAGE
PART 1 FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheets - September 27, 1998 and March 29, 1998 ....... 3
Consolidated Statements of Income - Quarters and Six Months Ended
September 27, 1998 and September 28, 1997 ................................. 4
Consolidated Statements of Cash Flows - Six Months Ended
September 27, 1998 and September 28, 1997 ................................. 5
Notes to Consolidated Financial Statements ................................ 6
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations ........................................... 8
PART 2 OTHER INFORMATION
Item 1 - Legal Proceedings ................................................... 11
Item 4 - Submission of Matters to a Vote of Security Holders ................. 11
Item 6 - Exhibits and Reports on Form 8-K .................................... 11
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2
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Alpha Industries, Inc. and Subsidiaries
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CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share amounts)
SEPTEMBER 27, MARCH 29,
1998 1998
(UNAUDITED) (AUDITED)
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ASSETS
Current assets
Cash and cash equivalents......................................... $ 7,148 $14,356
Short-term investments (Note 2)................................... 11,239 1,493
Accounts receivable............................................... 20,174 18,500
Inventories (Note 3).............................................. 9,594 7,941
Prepayments and other current assets.............................. 1,599 883
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Total current assets............................................ 49,754 43,173
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Property, plant and equipment, less accumulated depreciation and
amortization of $64,630 and $60,824............................... 33,989 32,664
Other assets....................................................... 1,116 1,092
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$84,859 $76,929
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt.............................. $ 1,739 $ 1,876
Current maturities of capital lease obligations................... -- 8
Accounts payable.................................................. 6,143 5,725
Payroll and related expenses...................................... 5,898 6,724
Other accrued liabilities......................................... 3,175 2,779
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Total current liabilities........................................ 16,955 17,112
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Long-term debt..................................................... 825 1,625
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Other long-term liabilities........................................ 2,240 2,370
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Commitments and contingencies (Note 6)
Stockholders' equity
Common stock par value $.25 per share: authorized
30,000,000 shares; issued 10,588,769 and 10,545,167 shares....... 2,647 2,636
Additional paid-in capital........................................ 57,495 56,758
Retained earnings (accumulated deficit)........................... 4,976 (3,214)
Less - Treasury shares 68,433 and 100,195 shares at cost.......... 219 315
Unearned compensation-restricted stock......................... 60 43
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Total stockholders' equity....................................... 64,839 55,822
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$84,859 $76,929
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The accompanying notes are an integral part of these financial statements.
3
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Alpha Industries, Inc. and Subsidiaries
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CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands except per share data)
SECOND QUARTER ENDED SIX MONTHS ENDED
SEPT. 27, SEPT. 28, SEPT. 27, SEPT. 28,
1998 1997 1998 1997
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Net sales............................................. $29,626 $28,571 $59,581 $54,276
Cost of sales......................................... 16,763 17,942 33,895 34,750
Research and development expenses..................... 2,891 2,422 5,913 4,741
Selling and administrative expenses................... 5,422 5,513 10,919 10,775
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Operating income....................................... 4,550 2,694 8,854 4,010
Interest expense....................................... (81) (126) (170) (271)
Interest income and other, net......................... 215 37 416 99
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Income before income taxes............................. 4,684 2,605 9,100 3,838
Provision for income taxes............................. 468 261 910 384
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Net income............................................. $ 4,216 $ 2,344 $ 8,190 $ 3,454
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Net income per share diluted........................... $ 0.39 $ 0.22 $ 0.76 $ 0.34
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Net income per share basic............................. $ 0.40 $ 0.23 $ 0.78 $ 0.34
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Weighted average common shares diluted................. 10,754 10,436 10,744 10,296
======= ======= ======= =======
Weighted average common shares basic................... 10,514 10,138 10,494 10,065
======= ======= ======= =======
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The accompanying notes are an integral part of these financial statements.
4
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Alpha Industries, Inc. and Subsidiaries
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
SIX MONTHS ENDED
SEPT. 27, SEPT. 28,
1998 1997
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Cash flows from operating activities:
Net income............................................................... $ 8,190 $ 3,454
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization of property, plant and equipment......... 3,806 3,309
Contribution of treasury shares to Savings and Retirement Plan......... 481 407
Amortization of unearned compensation - restricted stock, net.......... 45 20
Decrease in other liabilities and long-term benefits................... (130) (161)
Increase in other assets............................................... (18) (95)
Change in assets and liabilities:
Accounts receivable.................................................. (1,674) (1,917)
Inventories.......................................................... (1,653) 1,118
Other current assets................................................. (716) (824)
Accounts payable..................................................... 418 472
Repositioning reserve................................................ -- (522)
Other accrued liabilities and expenses............................... (430) 2,532
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Net cash provided by operations...................................... 8,319 7,793
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Cash flows from investing activities:
Purchases of short-term investments...................................... (12,724) (843)
Maturities of short-term investments..................................... 2,978 827
Additions to property, plant and equipment............................... (5,131) (4,583)
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Net cash used in investing activities................................ (14,877) (4,599)
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Cash flows from financing activities:
Payments on long-term debt............................................... (937) (2,107)
Deferred charges related to long-term debt............................... (6) 8
Payments on capital lease obligations.................................... (8) (163)
Proceeds from sale of stock.............................................. 98 66
Exercise of stock options................................................ 203 316
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Net cash used in financing activities................................ (650) (1,880)
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Net (decrease) increase in cash and cash equivalents....................... (7,208) 1,314
Cash and cash equivalents, beginning of period............................. 14,356 5,815
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Cash and cash equivalents, end of period................................... $ 7,148 $ 7,129
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The accompanying notes are an integral part of these financial statements.
5
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Alpha Industries, Inc. and Subsidiaries
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 BASIS OF PRESENTATION
The interim financial information included herein is unaudited. In addition,
the financial information does not include all disclosures required under
generally accepted accounting principles because certain note information
included in the Company's annual report to shareholders has been omitted and
such information should be read in conjunction with the prior year's annual
report. However, the financial information reflects all adjustments (consisting
solely of normal recurring adjustments) which are, in the opinion of management,
necessary to a fair statement of the results for the interim periods. The
Company considers the disclosures adequate to make the information presented not
misleading.
NOTE 2 SHORT-TERM INVESTMENTS
The Company's short-term investments are classified as held-to-maturity. These
investments consist primarily of commercial paper and bonds with original
maturities of more than 90 days. Such short-term investments are carried at
amortized cost, which approximates fair value, due to the short period of time
to maturity. Gains and losses are included in investment income in the period
they are realized.
NOTE 3 INVENTORIES
SEPTEMBER 27, MARCH 29,
Inventories consist of the following (in thousands): 1998 1998
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Raw materials....................................... $5,061 $3,916
Work-in-process..................................... 2,646 2,259
Finished goods...................................... 1,887 1,766
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$9,594 $7,941
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NOTE 4 SIGNIFICANT CUSTOMER
During the six months ended September 27, 1998 and September 28, 1997, one
customer accounted for approximately 25% and 21%, respectively, of the Company's
sales.
NOTE 5 EARNINGS PER SHARE
Effective December 28, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings Per Share" (FAS 128) which changed the
method of computing and presenting earnings per common share. All periods
presented have been restated in accordance with FAS 128.
6
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Alpha Industries, Inc. and Subsidiaries
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(unaudited)
NOTE 5 EARNINGS PER SHARE (CONTINUED)
A reconciliation of the weighted average number of shares outstanding used in
the computation of the basic and diluted earnings per share for the quarters and
six months ended September 27, 1998 and September 28, 1997 is as follows (in
thousands):
SECOND QUARTER ENDED SIX MONTHS ENDED
SEPT. 27, SEPT. 28, SEPT. 27, SEPT. 28,
1998 1997 1998 1997
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Weighted average shares (basic).... 10,514 10,138 10,494 10,065
Effect of dilutive stock options... 240 298 250 231
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Weighted average shares (diluted).. 10,754 10,436 10,744 10,296
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The net income used in the calculation of basic and diluted earnings per share
agrees with the net income appearing in the financial statements.
NOTE 6 COMMITMENTS AND CONTINGENCIES
The Company is party to suits and claims arising in the normal course of
business. Management believes these are adequately provided for or will result
in no significant additional liability to the Company.
7
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Alpha Industries, Inc. and Subsidiaries
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PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales for the first six months of fiscal 1999 totaled $59.6 million compared
with sales of $54.3 million for the same period last year. Sales for the second
quarter of fiscal 1999 totaled $29.6 million compared with $28.6 million for the
comparable period last year. New orders received for the first half of fiscal
1999 were $57.3 million, compared with $57.0 million for the same period last
year. The increase in sales and orders continues to be the result of higher
sales volumes due to increased penetration into several handset platforms. The
Company's Wireless Semiconductor sector had sales of $28.4 million while the
Application Specific Products (ASP) sector had sales of $19.8 million and the
Ceramics Products sector had sales of $11.4 million for the first six months of
fiscal 1999. For the second quarter of fiscal 1999, these groups reported sales
of $14.3 million for the Wireless Semiconductor sector, $9.9 million for the ASP
sector and $5.4 million for the Ceramics Products sector. Deliveries to one
customer represented approximately 25% of the Company's total sales for the
first six months of fiscal 1999 compared with 21% for the first six months of
fiscal 1998.
Gross profit for the first half of fiscal 1999 totaled $25.7 million or 43% of
sales compared with $19.5 million or 36% of sales for the comparable period last
year. Gross profit for the second quarter was $12.9 million or 43% of sales
compared with $10.6 million or 37% of sales for the same period last year.
Gross margins continue to increase quarter over quarter primarily as the result
of increased sales volumes and the leveraging of capacity of the Company's
Wireless Semiconductor and ASP operations, as well as reduced manufacturing
costs and improved operating efficiencies for the Ceramics Products group. The
Wireless Semiconductor sector reported gross margins of 41% while ASP reported
gross margins of 53% and the Ceramics Products sector reported gross margins of
31% for the first six months of fiscal 1999. Gross margins for the second
quarter of fiscal 1999 were 43% for the Wireless Semiconductor sector, 51% for
the ASP sector and 31% for the Ceramics Products sector.
Research and development expenses for the first six months of fiscal 1999 were
$5.9 million or 10% of sales compared with $4.7 million or 9% of sales for the
same period last year. For the second quarter of fiscal 1999, research and
development expenses increased 19% to $2.9 million as compared with the same
quarter last year. The increased research and development is due mainly to the
development of processes and applications related to high volume products in the
Wireless Semiconductor Products group, which are targeted at the rapidly-growing
wireless markets. Over 75% of the Company's total research and development
expenditures support this dynamic sector. The Company is strongly committed to
continuing its investment in the GaAs IC and high volume wireless products to
better serve its targeted markets, particularly as it continues to introduce new
products that its key customers need.
Selling and administrative expenses totaled $10.9 million or 18% of sales for
the first six months of fiscal 1999 compared with $10.8 million or 20% of sales
for the same period last year. For the second quarter of fiscal 1999, selling
and administrative expenses totaled $5.4 million or 18% of sales, as compared to
$5.5 million or 19% of sales for the comparable quarter last year. The year-
to-date increase in selling and administrative expenses reflects increased sales
commissions related to higher sales volumes offset by short-term cost reduction
initiatives. During the second quarter of fiscal 1999, the $91 thousand
decrease in selling and administrative costs was primarily the result of the
short-term cost reduction initiatives.
Interest expense for the first six months and second quarter of fiscal 1999
decreased $101 thousand and $45 thousand respectively over the comparable
periods last year due to a decline in borrowings. Interest income for the first
six months and quarter ended September 27, 1998 increased $317 thousand and $178
thousand, respectively, over the comparable periods last year as a result of
increased levels of short-term investments.
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Alpha Industries, Inc. and Subsidiaries
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The Company's effective tax rate for the first half of fiscal 1999 was 10%.
This rate differed from statutory rates primarily as a result of the utilization
of net operating loss carryforwards. At September 27, 1998, the Company had
available net operating loss carryforwards of approximately $18 million which
expire commencing in 2004.
For the first six months of fiscal 1999, the Company reported net income of $8.2
million or $0.76 per share diluted up more than 137% compared with net income of
$3.5 million or $0.34 per share diluted for the comparable period last year.
For the second quarter of fiscal 1999, the Company reported net income of $4.2
million or $0.39 per share diluted up 80% compared with net income of $2.3
million or $0.22 per share diluted for the same period last year.
FINANCIAL CONDITION
At September 27, 1998, working capital totaled $32.8 million and included $18.4
million in cash, cash equivalents, and short-term investments, compared with
$26.1 million of working capital at the end of fiscal 1998. Cash, cash
equivalents, and short-term investments increased $2.5 million for the first
half of fiscal 1999 as operations generated $8.3 million of cash principally
from net income and depreciation. Uses of cash included $5.1 million for
capital expenditures and approximately $900 thousand for the repayment of long-
term debt. The Company continued its investment in capital expenditures
particularly for the semiconductor wafer fab operation and the IC and discrete
semiconductor assembly and test areas, as well as for improved manufacturing
capabilities at the ceramics manufacturing facility. The Company remains
strongly committed to adding the required capacity needed to service the
wireless markets as demand continues to grow. During fiscal 1999, the Company
anticipates committing approximately $18 million in capital expenditures for the
high volume Wireless Semiconductor Products sector since this group is expected
to be the primary engine for growth. These capital expenditures are expected to
be disbursed over the next 6 to 12 months.
The Company expects to generate sufficient cash from operations to fund the
necessary projected levels of growth. With cash, cash equivalents, and short-
term investments of $18.4 million, a $7.5 million line of credit and a $7.5
million equipment line of credit currently available, the Company believes it
has adequate funds to support its current operating needs.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
Income" and No. 131, " Disclosure about Segments of an Enterprise and Related
Information", which are effective for fiscal years beginning after December 15,
1997. The Company has complied with SFAS No. 130 and determined there was no
effect on the Company's consolidated financial statements, and the Company is
currently evaluating the effects of SFAS No. 131.
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities"
establishes accounting and reporting standards for derivatives and hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the balance sheet and measure those instruments at fair
value. SFAS No. 133 is effective for fiscal years beginning after June 15,
1999.
The AICPA issued Statement of Position ("SOP") 98-1, "Accounting for Costs of
Computer Software Developed or Obtained for Internal Use" during fiscal 1998.
SOP 98-1 requires that companies capitalize certain internal-use software costs
upon meeting certain criteria. This SOP is effective for fiscal years beginning
after December 15, 1998.
The Company is currently evaluating SFAS No. 133 and SOP 98-1 and has not yet
determined their impact on the Company's consolidated financial statements.
9
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Alpha Industries, Inc. and Subsidiaries
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YEAR 2000
The Year 2000 issue relates to the inability of certain computer software
programs to properly recognize and process date-sensitive information relative
to the Year 2000 and beyond. To address this issue, the Company has initiated a
company-wide Year 2000 project under the direction of senior management.
The Company has evaluated its products and has determined that its current and
past products are not date-sensitive. The Company does not expect Year 2000
exposure for products sold.
The Company has completed a comprehensive inventory of its internal information
systems. Over the last several years, the Company has invested in new computer
hardware and software to improve its business operations. All such systems were
required to be Year 2000 compliant as a condition of purchase. The Company is
currently developing a plan for testing critical information systems to ensure
compliance. This testing is expected to be completed by April 1999.
The Company has also completed a comprehensive inventory of its equipment and
facilities. The Company is in the process of developing a plan for testing
critical items to ensure that they are compliant. Testing is expected to be
completed by April 1999.
Upon completion of the testing of systems, facilities, and equipment, the
Company will formulate contingency plans to handle the most reasonably likely
worst-case scenarios.
The Company has begun formal communication with significant suppliers,
customers, financial institutions, and other third parties with which the
Company has a material relationship in order to determine whether those entities
have adequate plans in place to ensure their Year 2000 preparedness. The
Company has not yet completed its assessment of its exposure to risks relating
to the Year 2000 issues of those entities with which it has a material
relationship. Upon completion of this assessment, the Company will formulate
contingency plans to handle the most reasonably likely worst-case scenarios.
Although the Company believes its planning efforts are adequate to address its
Year 2000 compliance concerns, there can be no assurances that the Company will
not experience unanticipated negative consequences or material costs caused by
undetected errors or defects in the technology used in its internal systems or
that third parties upon which the Company relies will be compliant in a timely
manner and will not have any material effect on the Company.
OTHER MATTERS
Safe Harbor Statement - Except for the historical information contained herein,
this Form 10-Q contains forward-looking statements that are inherently subject
to risks and uncertainties. The Company's results could differ materially based
on various factors, including without limitation: cancellation or deferral of
customer orders, difficulties in the timely development and market acceptance of
new products, market developments that vary from the current public expectations
concerning the growth of wireless communications, difficulties in manufacturing
new or existing products in sufficient quantity or quality, increased
competitive pressures, decreasing selling prices for the Company's products, or
changes in economic conditions. Further information on factors that could
affect the Company's financial results is included in the Company's periodic
reports filed with the S.E.C., including the most recent Form 10-K for the
fiscal year ended March 29, 1998 and any subsequent Form 10-Qs.
10
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Alpha Industries, Inc. and Subsidiaries
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PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
The Company does not have any material pending legal proceedings other than
routine litigation incidental to its business.
The Company has been notified by federal and state environmental agencies of its
potential liability with respect to the Spectron, Inc. Superfund site in Elkton,
Maryland. Several hundred other companies have also been notified about their
potential liability regarding this site. The Company continues to deny that it
has any responsibility with respect to this site other than as a de minimis
-- -------
party. Management is of the opinion that the outcome of the aforementioned
environmental matter will not have a material effect on the Company's operations
or financial position.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a) On September 14, 1998, Alpha Industries, Inc. held its Annual
Meeting of Stockholders.
b) At the Meeting, the Stockholders elected George S. Kariotis and
Timothy R. Furey as Class 3 Directors each to hold office for a
three-year term until the 2001 Annual Meeting of Stockholders and
until their successors have been duly elected and qualified. Votes
were cast as follows: Mr. Kariotis 8,755,674 for and 781,772
withheld, and Mr. Furey 8,755,674 for and 781,772 withheld.
c) At the Meeting, the Stockholders voted to amend the Alpha
Industries, Inc. 1996 Long-Term Incentive Plan. A total of 5,925,383
shares were voted in favor of amending the Alpha Industries, Inc.
1996 Long-Term Incentive Plan, 1,490,542 shares were voted against,
66,412 shares abstained from voting and 3,024,573 shares did not
vote.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(3) Certificate of Incorporation and By-laws.
(a) Restated Certificate of Incorporation (Filed as Exhibit 3(a) to
Registration Statement on Form S-3 (Registration No. 33-63857))*.
(b) Amended and restated By-laws of the Corporation dated April 30,
1992 (Filed as Exhibit 3(b) to the Annual Report on Form 10-K for
the year ended March 29, 1992)*.
(4) Instruments defining rights of security holders, including indentures.
(a) Specimen Certificate of Common Stock (Filed as Exhibit 4(a) to
Registration Statement on Form S-3 (Registration No. 33-63857))*.
(b) Frederick County Industrial Development Revenue Bond, Deed of
Trust, Loan Agreement and Guaranty and Indemnification Agreement
dated June 17, 1982 (Filed as Exhibit 4(g) to the Registration
Statement on Form S-8 filed July 29, 1982)*. Bond and Loan
Document Modification Agreement dated December 9, 1993 (Filed as
Exhibit 4(c) to the Quarterly Report on Form 10-Q for the quarter
ended December 26, 1993)*.
(c) Loan and Security Agreement dated December 15, 1993 between
Trans-Tech, Inc., and County Commissioners of Frederick County
(Filed as Exhibit 4(h) to the Quarterly Report on Form 10-Q for
the quarter ended July 3, 1994)*.
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Alpha Industries, Inc. and Subsidiaries
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(d) Stock Purchase Warrant for 50,000 shares of the Registrant's
Common Stock issued to Silicon Valley Bank as of April 1, 1994
(Filed as Exhibit 4(i) to the Quarterly Report on Form 10-Q for
the quarter ended July 3, 1994)*.
(e) Amended and restated Credit Agreement dated October 1, 1997
between Alpha Industries, Inc., and Trans-Tech, Inc. and Fleet
Bank of Massachusetts and Silicon Valley Bank (Filed as Exhibit
4(f) to the Quarterly Report on Form 10-Q for the quarter ended
December 28, 1997)*.
(10) Material Contracts.
(a) Alpha Industries, Inc., 1986 Long-Term Incentive Plan as amended
(Filed as Exhibit 10(a) to the Quarterly Report on Form 10-Q for
the quarter ended October 2, 1994)*. (1)
(b) Alpha Industries, Inc., Employee Stock Purchase Plan as amended
October 22, 1992 (Filed as Exhibit 10(b) to the Annual Report on
Form 10-K for the fiscal year ended March 28, 1993)* and amended
August 22, 1995 (Filed as Exhibit 10(b) to the Annual Report on
Form 10-K for the fiscal year ended March 31, 1996)*. (1)
(c) SERP Trust Agreement between the Registrant and the First
National Bank of Boston as Trustee dated April 8, 1991 (Filed as
Exhibit 10(c) to the Annual Report on Form 10-K for the fiscal
year ended March 31, 1991)*. (1)
(d) Alpha Industries, Inc., Long-Term Compensation Plan dated
September 24, 1990 (Filed as Exhibit 10(i) to the Annual
Report on Form 10-K for the fiscal year ended March 29,
1992)*; amended March 28, 1991 (Filed as Exhibit 10 (a)
to the Quarterly Report on Form 10-Q for the quarter ended
June 27, 1993)* and as further amended October 27, 1994
(Filed as Exhibit 10(f) to the Annual Report on Form 10-K
for the fiscal year ended April 2, 1995)*.(1)
(e) Master Equipment Lease Agreement between AT&T Commercial Finance
Corporation and the Registrant dated June 19, 1992 (Filed as
Exhibit 10(j) to the Annual Report on Form 10-K for the fiscal
year ended March 28, 1993)*.
(f) Severance Agreement dated January 13, 1997 between the Registrant
and Thomas C. Leonard (Filed as Exhibit 10(f) to the Annual
Report on Form 10-K for the fiscal year ended March 30, 1997)*.
(1)
(g) Severance Agreement dated May 20, 1997 between the Registrant and
David J. Aldrich (Filed as Exhibit 10(g) to the Annual Report on
Form 10-K for the fiscal year ended March 30, 1997)*. (1)
(h) Severance Agreement dated January 14, 1997 between the Registrant
and Richard Langman (Filed as Exhibit 10(h) to the Annual Report
on Form 10-K for the fiscal year ended March 30, 1997)*. (1)
(i) Consulting Agreement dated August 13, 1992 between the Registrant
and Sidney Topol (Filed as Exhibit 10(p) to the Annual Report on
Form 10-K for the fiscal year ended April 3, 1994)*.(1)
(j) Master Lease Agreement between Comdisco, Inc. and the Registrant
dated September 16, 1994 (Filed as Exhibit 10(q) to the Quarterly
Report on Form 10-Q for the quarter ended October 2, 1994)*.
(k) Alpha Industries, Inc., 1994 Non-Qualified Stock Option Plan for
Non-Employee Directors (Filed as Exhibit 10(r) to the Quarterly
Report on Form 10-Q for the quarter ended October 2, 1994)*.(1)
(l) Alpha Industries Executive Compensation Plan dated January 1,
1995 and Trust for the Alpha Industries Executive Compensation
Plan dated January 3, 1995 (Filed as Exhibit 10(p) to the Annual
Report on Form 10-K for the fiscal year ended April 2, 1995)*.(1)
(m) Alpha Industries, Inc. Savings and Retirement 401(k) Plan dated
July 1, 1996 (Filed as Exhibit 10(n) to the Annual Report on Form
10-K for the fiscal year ended March 30, 1997)*.
(n) Severance Agreement dated September 4, 1998 between the
Registrant and Paul E. Vincent. (1)
(o) Change in Control Agreement between the Registrant and James C.
Nemiah dated September 25, 1998. (1)
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Alpha Industries, Inc. and Subsidiaries
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(p) Lease Agreement between MIE Properties, Inc. and Trans-Tech, Inc.
(Filed as Exhibit 10(r) to the Quarterly Report on Form 10-Q for
the quarter ended September 29, 1996)*.
(q) Alpha Industries, Inc., 1997 Non-Qualified Stock Option Plan for
Non-Employee Directors (Filed as Exhibit 10(r) to the Annual
Report on Form 10-K for the fiscal year ended March 29,
1998)*.(1)
(11) Statement re computation of per share earnings**.
(27) Financial Data Schedules.
(b) Reports on Form 8-K
No reports on Form 8-K were filed with the Securities and
Exchange Commission during the fiscal quarter ended September 27,
1998.
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*Not filed herewith. In accordance with Rule 12b-32 promulgated pursuant to the
Securities Exchange Act of 1934, as amended, reference is hereby made to
documents previously filed with the Commission, which are incorporated by
reference herein.
**Reference is made to Note 5 of the notes to Consolidated Financial Statements
on Page 6 of this Quarterly Report on Form 10-Q which Note 5 is hereby
incorporated by reference herein.
(1) Management Contracts.
13
- ---------------------------------------
Alpha Industries, Inc. and Subsidiaries
- ---------------------------------------
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 7, 1998
----------------
Alpha Industries, Inc., and Subsidiaries
----------------------------------------
Registrant
/s/ Thomas C. Leonard
--------------------------------------------
Thomas C. Leonard
Chief Executive Officer
President
/s/ Paul E. Vincent
--------------------------------------------
Paul E. Vincent
Chief Financial Officer
Principal Financial Officer
Principal Accounting Officer
14
EXHIBIT 10(N)
September 4, 1998
Paul E. Vincent
10 Leary Drive
Tewksbury, MA 01876
Re: Severance Agreement
Dear Paul:
This letter is to confirm the severance arrangements that we have offered to you
as a Vice President of Alpha Industries, Inc. ("Alpha").
1. If: (i) a Change in Control occurs while you are employed by Alpha, and
(ii) your employment with Alpha is voluntarily or involuntarily terminated
within two (2) years thereafter, then: (a) Alpha will pay you two (2) years of
salary continuation (and any bonus guaranteed or earned prior to the date of
termination) in accordance with the terms and conditions of this letter, and (b)
all Alpha stock options then outstanding and held by you, whether or not by
their terms then exercisable, will, subject to their other terms and conditions,
become immediately exercisable and remain exercisable for a period of ninety
(90) days after the date of employment termination.
2. A "Change in Control" will be deemed to have occurred if the Continuing
Board of Alpha shall have ceased for any reason to constitute a majority of the
Board of Directors of Alpha. For this purpose, a "Continuing Director" will
include any member of the Board of Directors of Alpha as a date of this letter
and any person nominated for election to the Board of Directors of Alpha by a
majority of the then Continuing Directors.
3. If, at any time, your employment with Alpha is involuntarily terminated
without Cause, then: (a) Alpha will pay you two (2) years of salary continuation
(and any bonus guaranteed or earned prior to the date of termination) in
accordance with the terms and conditions of this letter, and (b) all Alpha stock
options then outstanding and held by you, whether or not by their terms then
exercisable, will, subject to their other terms and conditions, become
immediately exercisable and remain exercisable for a period of ninety (90) days
after the date of employment termination.
4. "Cause" will mean: (a) deliberate dishonesty detrimental to the best
interests of Alpha or any subsidiary, or (b) conduct constituting moral
turpitude, or (c) willful disloyalty to Alpha, or (d) refusal or failure to obey
the directions of the CEO of Alpha, or (e) incompetent performance or
substantial or continuing inattention to or neglect of duties and
responsibilities assigned to you.
Paul E. Vincent
September 4, 1998
Page 2
5. Salary continuation payments under this letter will: (a) be made at the same
rate as you were receiving on the date of employment termination; (b) be paid in
equal periodic installments at such intervals as Alpha shall generally pay its
officers, and (c) be reduced by the amount of any compensation that you receive
from any person for services rendered during the salary continuation period.
Notwithstanding the foregoing, you will not receive any salary continuation
payments for any period in which you fail to actively seek gainful employment.
6. During the term of your employment with Alpha and for the first twelve (12)
months after the date on which your employment with Alpha is voluntarily or
involuntarily terminated (the "Noncompete Period"), you will not, directly or
indirectly, whether as owner, partner, shareholder, director, consultant, agent,
employee, or otherwise, or through any person, engage in any employment,
consulting or other activity which competes with the business of Alpha or any
subsidiary or affiliate of Alpha (collectively, the "Company"). You acknowledge
and agree that your direct or indirect participation in the conduct of such
competing business alone or with any person will materially impair the business
and prospects of Alpha. During the Noncompete Period, you will not (i) attempt
to hire any director, officer, employee or agent of the Company, (ii) assist in
such hiring by any other person, (iii) encourage any person to terminate his or
her employment or business relationship with the Company, (iv) encourage any
customer or supplier of the Company to terminate its relationship with the
Company, or (v) obtain, or assist in obtaining, for your own benefit (other than
indirectly as an employee of the Company) any customer of the Company. If any
of the restrictions provided for in this Section 6 are adjudicated to be
excessively broad as to scope, geographic area, time or otherwise, said
restriction shall be reduced to the extent necessary to make the restriction
reasonable and shall be binding on you as so reduced. Any provisions of this
Section 6 not so reduced shall remain in full force and effect. It is
understood that during the Noncompete Period, you will make yourself available
to the Company for consultation on behalf of the Company, upon reasonable
request and at a reasonable rate of compensation and at reasonable times in
light of any commitment you may have to a new employer. You understand and
acknowledge that the Company's remedies at law for breach of any of the
restrictions in this Section are inadequate and that any such breach will cause
irreparable harm to the Company. You therefore agree that in addition and as a
supplement to such other rights and remedies as may exist in the Company's
favor, the Company may apply to any court having jurisdiction to enforce the
specific performance of the restrictions in this Section, and may apply for
injunctive relief against any act which would violate those restrictions.
Please sign both copies of this letter and return one to me. If you have any
questions, please feel free to call me or Jim Nemiah.
AGREED TO:
Sincerely,
________________________________
Thomas C. Leonard Date: __________________________
President and CEO
Exhibit 10 (o)
September 25, 1998
James Nemiah
Re: Change in Control Agreement
Dear James:
This letter is to confirm the agreement that we reached with regard to your
employment with Alpha Industries, Inc. ("Alpha"). If: (i) a Change in Control
occurs within two years of the date of this letter, AND (ii) your employment
with Alpha or a subsidiary of Alpha is involuntarily terminated within one year
thereafter, THEN Alpha will pay you up to one year of salary continuation in
accordance with the terms and conditions of this letter.
A "Change in Control" shall be deemed to have occurred if the Continuing
Directors shall have ceased for any reason to constitute a majority of the Board
of Directors of Alpha. For this purpose, a "Continuing Director" shall include
any member of the Board of Directors of Alpha as of the date of this letter and
any person nominated for election to the Board of Directors of Alpha by a
majority of the then Continuing Directors.
Salary continuation payments under this letter will be reduced by the amount of
any compensation that you receive from any person for services rendered during
the salary continuation period. For any period in which you either: (i) engage
in activities or enterprises (on behalf of yourself or others) that are directly
competitive with any business activity of Alpha Industries, Inc. or any of its
subsidiaries, OR (ii) fail to actively seek gainful employment, you will not
receive any salary continuation payments.
Please sign both copies of this letter and return one copy to George LeVan. If
you have any questions, please feel free to call George LeVan at (617) 824-4419
or Jim Nemiah at (617) 824-4426.
Sincerely,
Paul E. Vincent
Vice President, CFO, Treasurer
5
6-MOS
MAR-28-1999
MAR-29-1998
SEP-27-1998
7,148
11,239
20,801
627
9,594
49,754
98,619
64,630
84,859
16,955
825
0
0
2,647
62,192
84,859
59,581
59,581
33,895
50,727
(12)
110
(234)
9,100
910
8,190
0
0
0
8,190
0.78
0.76
5
6-MOS
MAR-29-1998
MAR-30-1997
SEP-28-1997
7,129
1,234
19,524
588
9,149
38,129
87,641
29,882
69,567
18,013
2,580
0
0
2,590
45,059
69,567
54,276
54,276
34,750
50,266
32
120
140
3,838
384
3,454
0
0
0
3,454
0.34
0.34
