NONCOMPETITION AGREEMENT
Exhibit 10.3
This Noncompetition Agreement (“Noncompetition Agreement”) is being executed and
delivered as of August 13, 2007, by Xxxxxx Xxx Xxxxxxx (“Stockholder”), in favor of, and for the
benefit of: RF Micro Devices, Inc., a North Carolina corporation (“Parent”); Sirenza Micro
Devices, Inc. (the “Company”); and the other Beneficiaries (as defined in Section 19).
Certain capitalized terms used but not otherwise defined in this Noncompetition Agreement have the
meanings set forth in Section 19.
Recitals
A. Stockholder is a key employee, stockholder, optionholder and/or other security holder of
the Company and has obtained extensive and valuable knowledge and confidential information
concerning the business of the Company and its Affiliates.
B. Concurrently with the execution and delivery of this Noncompetition Agreement, Parent,
Sirenza Acquisition Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Parent
(“Merger Sub”), and the Company are entering into an Agreement and Plan of Merger and
Reorganization (the “Merger Agreement”), pursuant to which Merger Sub will merge with and into the
Company and the Company will become a wholly-owned subsidiary of Parent (the “Merger”).
C. Parent wishes to protect its investment in the Company, including the business and
goodwill of the Company and its Affiliates and the confidential and proprietary information
possessed by Stockholder, by restricting the activities of Stockholder which might compete with or
harm the Company or its Affiliates.
D. Stockholder will be offered employment with Parent or an Affiliate of Parent following the
Effective Date as a result of which Stockholder will receive substantial benefits in addition to
those currently enjoyed by Stockholder as an employee of the Company (Stockholder’s employment
with Parent or an Affiliate of Parent following the Effective Date is referred herein as
“Stockholder’s Employment”). After the Effective Date, Stockholder will obtain extensive and
valuable knowledge, trade secrets and other confidential information concerning the business of
Parent and its Affiliates.
E. In connection with, and as a condition to, Parent entering into the Merger Agreement and
the consummation of the transactions contemplated by the Merger Agreement, and to enable Parent to
secure more fully the benefits of such transactions, Parent has required that Stockholder enter
into this Noncompetition Agreement; and Stockholder is entering into this Noncompetition Agreement
in order to induce Parent to enter into the Merger Agreement and to consummate the transactions
contemplated by the Merger Agreement.
Agreement
1. Acknowledgements by Stockholder. Stockholder acknowledges that:
(a) as a consequence of the Merger: (i) Parent will acquire all of the shares of capital
stock (and the underlying goodwill) of the Company owned by Stockholder and other stockholders of
the Company in exchange for the consideration stated in the Merger Agreement; and (ii) Stockholder
will receive substantial benefits;
(b) by virtue of Stockholder’s position with the Company, he has developed considerable
expertise in the business operations of the Company and its Affiliates and has had extensive
access to trade secrets and other confidential information;
(c) as a result of Stockholder’s Employment, he will develop extensive knowledge of the
business operations of Parent and its Affiliates including trade secrets and other confidential
information;
(d) to enable Parent to reap the benefits of the Merger, Parent reasonably expects that
Stockholder should refrain from carrying on certain activities as set forth in this Noncompetition
Agreement;
(e) Parent and the other Beneficiaries would be irreparably damaged, and Parent’s substantial
investment in the Company would be materially impaired, if Stockholder were to enter into an
activity or take any action in violation of the terms of this Noncompetition Agreement; and
(f) the terms and conditions of this Noncompetition Agreement are fair and reasonable to
Stockholder and the restraints imposed herein and the enforcement of the terms and conditions
hereof will not cause Stockholder to be unable to engage in lawful professions, trades or
businesses.
2. Restriction on Competition. Stockholder agrees that, during the Restricted Period,
Stockholder shall not, and Stockholder shall ensure that his Affiliates do not:
(a) engage directly or indirectly in Competition in any part of the Restricted Territory; or
(b) directly or indirectly be or become an officer or other employee, director, stockholder,
owner, co-owner, Affiliate, partner, promoter, agent, representative, designer, consultant,
advisor or manager of, for or to, or otherwise be or become associated with or acquire or hold any
direct or indirect interest in, any Person that engages directly or indirectly in Competition in
any part of the Restricted Territory;
provided, however, that Stockholder may, without violating this Section 2, own, as a passive
investment, shares of capital stock of a publicly-held corporation that engages in Competition if:
(i) such shares are actively traded on an established national securities market in the United
States; (ii) the number of shares of such corporation’s capital stock that are owned beneficially
by Stockholder and the number of shares of such corporation’s capital stock that are owned
beneficially by Affiliates of Stockholder collectively represent less than one percent (1%) of the
total number of shares of such corporation’s capital stock outstanding; and (iii) neither
Stockholder nor any Affiliate of Stockholder is otherwise associated directly or indirectly with
such corporation or with any Affiliate of such corporation.
3. Non-interference.
(a) During the Restricted Period, Stockholder shall not, directly or indirectly, personally
or through others, without the prior written consent of Parent, solicit, attempt to solicit,
induce or attempt to induce (on Stockholder’s own behalf or on behalf of any other Person) any
Company Specified Person to terminate his employment or other relationship with Parent or any
Affiliate of Parent.
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(b) During the Restricted Period, Stockholder shall not, directly or indirectly, personally or
through others, without the prior written consent of Parent, solicit, attempt to solicit, induce or
attempt to induce (on Stockholder’s own behalf or on behalf of any other Person) any Parent
Specified Person to terminate his employment or other relationship with Parent or any Affiliate of
Parent.
(c) During the Restricted Period, Stockholder shall not, directly or indirectly, personally
or through others, without the prior written consent of Parent, induce or attempt to induce any
Company Business Contact to terminate any of its relationships with Parent or any Affiliate of
Parent.
(d) During the Restricted Period, Stockholder shall not, directly or indirectly, personally
or through others, without the prior written consent of Parent, induce or attempt to induce any
Parent Business Contact to terminate any of its relationships with Parent or any Affiliate of
Parent.
4. Representations and Warranties. Stockholder represents and warrants, to and for the
benefit of the Beneficiaries, that: (a) Stockholder has full power and capacity to execute and
deliver, and to perform all of Stockholder’s obligations under, this Noncompetition Agreement; and
(b) neither the execution and delivery of this Noncompetition Agreement nor the performance of this
Noncompetition Agreement will result directly or indirectly in a violation or breach of: (i) any
agreement or obligation by which Stockholder or any Affiliate of Stockholder is or may be bound; or
(ii) any law, rule or regulation.
5. Independence of Obligations. The covenants of Stockholder set forth in this Noncompetition
Agreement shall be construed as independent of any other agreement or arrangement between
Stockholder, on the one hand, and the Company or Parent or any of their respective Affiliates, on
the other hand, and the existence of any claim or cause of action by Stockholder against the
Company or Parent or any of their respective Affiliates shall not constitute a defense to the
enforcement of such covenants against Stockholder. Nothing in this Noncompetition Agreement shall
limit any of the rights or remedies of Parent under the Merger Agreement, or any of the rights or
remedies of Parent or any of the obligations of Stockholder under any agreement between
Stockholder and Parent or any certificate or instrument executed by Stockholder in favor of
Parent; and nothing in the Merger Agreement or in any other such agreement, certificate or
instrument, shall limit any of the rights or remedies of Parent or any of the obligations of
Stockholder under this Noncompetition Agreement.
6. Specific Performance. Stockholder agrees that, in the event of any breach or threatened
breach by Stockholder of any covenant, obligation or other provision set forth in this
Noncompetition Agreement: (a) Parent and each of the other Beneficiaries will suffer irreparable
harm which cannot adequately be compensated for with monetary damages; and (b) Parent and each of
the other Beneficiaries shall be entitled (in addition to any other remedy that may be available
to it, including monetary damages) to: (i) a decree or order of specific performance or mandamus
to enforce the observance and performance of such covenant, obligation or other provision; and
(ii) an injunction restraining such breach or threatened breach. Stockholder further agrees that
no Beneficiary shall be required to obtain, furnish or post any bond or similar instrument in
connection with or as a condition to obtaining any remedy referred to in this Section 6, and
Stockholder irrevocably waives any right it may have to require any Beneficiary to obtain, furnish
or post any such bond or similar instrument.
7. Attorneys’ Fees. If any legal action or other legal proceeding relating to this
Noncompetition Agreement or the enforcement of any provision of this Noncompetition Agreement is
brought against Stockholder, the prevailing party shall be entitled to recover reasonable
attorneys’ fees, costs and disbursements (in addition to any other relief to which the prevailing
party may be entitled).
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8. Non-Exclusive. The rights and remedies of Parent and the other Beneficiaries under this
Noncompetition Agreement are not exclusive of or limited by any other rights or remedies which they
may have, whether at law, in equity, by contract or otherwise, all of which shall be cumulative
(and not alternative). Without limiting the generality of the foregoing, the rights and remedies of
Parent and the other Beneficiaries under this Noncompetition Agreement, and the obligations and
liabilities of Stockholder under this Noncompetition Agreement, are in addition to their respective
rights, remedies, obligations and liabilities under the law of unfair competition, under laws
relating to misappropriation of trade secrets, under other laws and common law requirements and
under all applicable rules and regulations.
9. Severability. If any provision of this Noncompetition Agreement or any part of any such
provision is held under any circumstances to be invalid or unenforceable in any jurisdiction, then:
(a) such provision or part thereof shall, with respect to such circumstances and in such
jurisdiction, be deemed amended to conform to applicable laws so as to be valid and enforceable to
the fullest possible extent; (b) the invalidity or unenforceability of such provision or part
thereof under such circumstances and in such jurisdiction shall not affect the validity or
enforceability of such provision or part thereof under any other circumstances or in any other
jurisdiction; and (c) the invalidity or unenforceability of such provision or part thereof shall
not affect the validity or enforceability of the remainder of such provision or the validity or
enforceability of any other provision of this Noncompetition Agreement. Each provision of this
Noncompetition Agreement is separable from every other provision of this Noncompetition Agreement,
and each part of each provision of this Noncompetition Agreement is separable from every other part
of such provision.
10. Notices. Any notice or other communication under this Noncompetition Agreement shall be in
writing and shall be deemed to have been duly given or made as follows: (a) if sent by registered
or certified mail in the United States return receipt requested, upon receipt; (b) if sent by
nationally recognized overnight air courier (such as DHL or Federal Express), two business days
after mailing; (c) if sent by facsimile transmission before 5:00 p.m., when transmitted and receipt
is confirmed; (d) if sent by facsimile transmission after 5:00 p.m. and receipt is confirmed, on
the following business day; and (e) if otherwise actually personally delivered, when delivered,
provided that such notices, requests, demands and other communications are delivered to the address
set forth below, or to such other address as Parent or Stockholder shall provide by like notice to
the other:
if to Stockholder:
at the address set forth on the signature page hereof; and
if to Parent:
RF Micro Devices, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Fax: (000) 000 0000
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Fax: (000) 000 0000
with a copy (which shall not constitute notice) to:
Cooley Godward Kronish LLP
5 Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxx Xxxx, Esq. and Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
5 Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxx Xxxx, Esq. and Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
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11. Governing Law; Jurisdiction; Venue; Waiver of Jury Trial.
(a) This Noncompetition Agreement shall be construed in accordance with, and governed in all
respects by, the internal laws of the State of Colorado (without giving effect to principles of conflicts of laws).
(a) Any action or proceeding relating to this Noncompetition Agreement or to the enforcement
of any provision of this Noncompetition Agreement may be brought or otherwise commenced in any
state court located in the County of Broomfield, State of Colorado, or in the federal courts
located in the District of [Colorado]. Stockholder: (i) expressly and irrevocably consents and
submits to the jurisdiction of each state court located in the County of Broomfield, State of
Colorado (and each appellate court located in such county), and each federal court located in the
District of Colorado, in connection with any such action or proceeding; (ii) agrees that service of
any process, summons, notice or document by U.S. mail addressed as set forth in Section 10 shall
constitute effective service of such process, summons, notice or document for purposes of any such
action or proceeding; (iii) agrees that each state court located in the County of Broomfield, State
of Colorado, and each federal court located in the District of Colorado shall be deemed to be a
convenient forum; and (iv) agrees not to assert (by way of motion, as a defense or otherwise), in
any such action or proceeding commenced in any state court located in the County of Broomfield,
State of Colorado, or in any federal court located in the District of Colorado, any claim that
Stockholder is not subject personally to the jurisdiction of such court, that such action or
proceeding has been brought in an inconvenient forum, that the venue of such action or proceeding
is improper or that this Noncompetition Agreement or the subject matter of this Noncompetition
Agreement may not be enforced in or by such court.
(b) STOCKHOLDER IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY ACTION OR
PROCEEDING RELATING TO THIS NONCOMPETITION AGREEMENT OR THE ENFORCEMENT OF ANY PROVISION OF THIS
NONCOMPETITION AGREEMENT.
(c) Nothing in this Section 11 shall be deemed to limit or otherwise affect the right of
Parent or any other Beneficiary to commence any legal action or proceeding against Stockholder in
any forum or jurisdiction.
12. Waiver. No failure on the part of any Person to exercise any power, right, privilege or
remedy under this Noncompetition Agreement, and no delay on the part of any Person in exercising
any power, right, privilege or remedy under this Noncompetition Agreement, shall operate as a
waiver of such power, right, privilege or remedy; and no single or partial exercise of any such
power, right, privilege or remedy shall preclude any other or further exercise thereof or of any
other power, right, privilege or remedy. No Person shall be deemed to have waived any claim
arising out of this Noncompetition Agreement, or any power, right, privilege or remedy under this
Noncompetition Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on behalf of such Person;
and any such waiver shall not be applicable or have any effect except in the specific instance in
which it is given.
13. Successors and Assigns. This Noncompetition Agreement shall be binding upon Stockholder
and shall inure to the benefit of Parent and the other Beneficiaries and the respective successors
and assigns (if any) of the foregoing. Parent may freely assign any or all of its rights under
this Noncompetition Agreement, in whole or in part, to any other Person, without obtaining the
consent or
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approval of any other Person, in connection with the sale of a substantial part of the stock,
assets or business of the Company. Stockholder shall not be permitted to assign any of
Stockholder’s rights or delegate any of Stockholder’s obligations under this Noncompetition
Agreement. Notwithstanding anything to the contrary contained herein, Stockholder acknowledges and
agrees that Parent holds the benefit of Stockholder’s covenants and obligations in this
Noncompetition Agreement for and on behalf of and in trust for itself and each of the other
Beneficiaries.
14. Further Assurances. Stockholder shall execute and/or cause to be delivered to Parent (and
each Beneficiary, if applicable) such instruments and other documents, and shall take such other
actions, as Parent and such Beneficiary may reasonably request at any time for the purpose of
carrying our or evidencing any of the provisions of this Noncompetition Agreement.
15. Captions. The captions contained in this Noncompetition Agreement are for convenience of
reference only, shall not be deemed to be a part of this Noncompetition Agreement and shall not be
referred to in connection with the construction or interpretation of this Noncompetition Agreement.
16. Construction. Whenever required by the context, the singular number shall include the
plural, and vice versa; the masculine gender shall include the feminine and neuter genders; and
the neuter gender shall include the masculine and feminine genders. Any rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall not be applied in
the construction or interpretation of this Noncompetition Agreement. Neither the drafting history
nor the negotiating history of this Noncompetition Agreement shall be used or referred to in
connection with the construction or interpretation of this Noncompetition Agreement. As used in
this Noncompetition Agreement, the words “include” and “including” and variations thereof, shall
not be deemed to be terms of limitation, and shall be deemed to be followed by the words “without
limitation.” Except as otherwise indicated in this Noncompetition Agreement, all references in
this Noncompetition Agreement to “Sections” are intended to refer to Sections of this
Noncompetition Agreement.
17. Amendment. This Noncompetition Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and delivered on behalf of
each of Stockholder and Parent (or any successor to Parent).
18. Exchanges by Facsimile. The exchange of a fully executed Noncompetition Agreement (in
counterparts or otherwise) by facsimile shall be sufficient to bind the parties to the terms and
conditions of this Noncompetition Agreement.
19. Defined Terms. For purposes of this Noncompetition Agreement:
(a) “Affiliate” shall mean, with respect to any Person, any other Person that as of the date
of this Noncompetition Agreement or as of any subsequent date, directly or indirectly, through one
or more intermediaries, controls, is controlled by or is under common control with such specified
Person.
(b) “Beneficiaries” shall include: (i) Parent; (ii) each current and future Affiliate of
Parent (including Merger Sub and, following the Merger, the Company); (iii) the respective
representatives of the Persons referred to in clauses “(i)” and “(ii)” above; and (iv) the
respective successors and assigns of the Persons referred to in clauses “(i)”, “(ii)” and “(iii)”
above; provided, however, that the Company’s stockholders shall not be deemed to be
“Beneficiaries.”
(c) “Company Business Contact” means any Person who is or was a customer,
distributor, reseller or marketing or other partner relating to any aspect of the business of the Company or
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any Affiliate of the Company on the Effective Date or at any time during the 90-day period ending
on the Effective Date.
(d) “Company Specified Person” means any Person who is or was an employee, consultant or
independent contractor of or to the Company or any Affiliate of the Company on the Effective Date
or at any time during the 90-day period ending on the Effective Date.
(e) “Competing Product” shall mean any: (i) product, equipment, device or
system that has been designed, developed, manufactured, assembled, promoted, sold, supplied,
distributed, resold, installed, supported, maintained, repaired, refurbished, licensed or
sublicensed by or on behalf of the Company or any Affiliate of the Company at any time on or prior
to this date of this Noncompetition Agreement; (ii) product, equipment, device or system that has
been designed, developed, manufactured, assembled, promoted, sold, supplied, distributed, resold,
installed, supported, maintained, repaired, refurbished, licensed or sublicensed by or on behalf
of Parent or any Affiliate of Parent at any time during Stockholder’s Employment; or (iii)
product, equipment, device or system that is substantially the same as, incorporates, is a
material component or part of, is based upon, is functionally similar to or competes in any
material respect with any product, equipment, device or system of the type referred to in clauses
“(i)” and “(ii)” of this sentence.
(f) “Competing Service” shall mean any: (i) service that has been provided, performed or
offered by or on behalf of the Company, any Affiliate of the Company, Parent or any Affiliate of
Parent at any time on or prior to the date of this Noncompetition Agreement or during Stockholder’s
Employment with Parent or any Affiliate of Parent; (ii) service that facilitates, supports or
otherwise relates to the design, development, manufacture, assembly, promotion, sale, supply,
distribution, resale, installation, support, maintenance, repair, refurbishment, licensing or
sublicensing of any Competing Product; or (iii) service that is substantially the same as, is based
upon or competes in any material respect with any service referred to in clause “(i)” or clause
“(ii)” of this sentence.
(g) A Person shall be deemed to be engaged in “Competition” if: (i) such Person or any of
such Person’s subsidiaries or other Affiliates is engaged directly or indirectly in the design,
development, sale, distribution, marketing or licensing of any Competing Product; or (ii) such
Person or any of such Person’s subsidiaries or other Affiliates is engaged directly or indirectly
in providing, performing or offering any Competing Service.
(h) “Parent Business Contact” means any Person: (i) who is or was a customer,
distributor, reseller or marketing or other partner relating to any aspect of the business of
Parent or any Affiliate of Parent at any time during the period from the Effective Date through the
date on which Stockholder leaves Stockholder’s Employment; and (ii) with whom Stockholder has or
had contact (or as to whom Stockholder obtains or obtained confidential information concerning the
business relationship between such Person and Parent or any Affiliate of Parent) during the period
referred to in clause “(i)” of this sentence.
(i) “Parent Specified Person” means any Person: (i) who is or was an employee, consultant or
independent contractor of or to Parent or any Affiliate of Parent at any time during the period
from the Effective Date through the date on which Stockholder leaves Stockholder’s Employment; and
(ii) with whom Stockholder has or had contact (or with respect to whom Stockholder obtains or
obtained confidential information) during the period referred to in clause “(i)” of this sentence.
(j) “Person” shall mean any: (i) individual; (ii) corporation, general partnership,
limited partnership, limited liability partnership, trust, company (including any limited
liability company or joint stock company) or other organization or entity; or (iii) governmental
body or authority.
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(k) “Restricted Period” shall mean the period commencing on the Effective Date and ending on
the later of the (i) third anniversary of the Effective Date or (ii) twelve month anniversary of
the date on which Stockholder leaves Stockholder’s Employment regardless of reason.
(1) “Restricted Territory” shall mean: (i) each county or similar political
subdivision of each State of the United States of America; (ii) each State, territory or
possession of the United States of America; and (iii) each country, province, territory or other
jurisdiction throughout the world in which the Company, any of its Affiliates, Parent or any of
its Affiliates carries on business or in which the products or services of the Company or any of
its Affiliates are sold or are available for sale.
20. Effective Date. This Noncompetition Agreement shall become effective upon the consummation
of the merger contemplated by the Merger Agreement (the date of the consummation of the Merger
being referred to as the “Effective Date”).
[Remainder of page intentionally left blank]
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In Witness Whereof, Stockholder has duly executed and delivered this Noncompetition Agreement
as of the date first above written.
| Stockholder |
||||
| /s/ XXXXXX XXX XXXXXXX | ||||
| Signature | ||||
| XXXXXX XXX XXXXXXX | ||||
| Name | ||||
Signature Page to Noncompetition Agreement
