Exhibit 10.1
AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
This AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (the "Agreement")
is entered into effective as of January 10, 2003, by and between RF MICRO
DEVICES, INC., a North Carolina corporation (the "Company"), and XXXXXX X.
XXXXXXXXXXX (the "Executive").
WHEREAS, the Executive has been employed by the Company in various
executive capacities, including President of the Company, and, effective as of
the date hereof, the Executive shall assume the title, duties and
responsibilities of Chief Executive Officer of the Company; and
WHEREAS, the Company considers the establishment and maintenance of a
sound and vital management group to be essential to protecting and enhancing the
best interests of the Company and its shareholders; and
WHEREAS, the Company has determined that the best interests of the
Company and its shareholders will be served by reinforcing and encouraging the
continued dedication of the Executive to his assigned duties without
distractions arising from a potential change in control of the Company; and
WHEREAS, the Executive and the Company have previously entered into a
Change in Control Agreement effective as of March 1, 2001 (the "Predecessor
Agreement"); and
WHEREAS, the Executive and the Company desire to amend and restate the
Predecessor Agreement in order to provide benefits to the Executive commensurate
with the benefits provided to the Chief Executive Officer of the Company and
other "top tier" executives of the Company, the terms of which benefits are
contained in this Agreement, and, further, to provide the benefits to the
Company and its shareholders described above;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Executive and the
Company hereby agree as follows:
1. TERM OF AGREEMENT. This Agreement shall become effective on the date
hereof and shall continue in effect until the earliest of (a) March 1, 2004, if
no Change in Control has occurred before that date; provided, however, that
commencing on March 1, 2004 and each year thereafter, the term of this Agreement
shall automatically be extended for an additional one year unless, not later
than January 1 of the same year, the Company shall have given notice to the
Executive that it does not wish to extend this Agreement (such initial period,
as it may be extended as described in Section 1(a) herein, being referred to as
the "Term"); (b) the termination by either party of the Executive's employment
with the Company for any reason prior to a Change in Control; or (c) the
expiration following a Change in Control of two years and the fulfillment by the
Company and the Executive of all of their obligations hereunder. Notice by the
Company of its intention not to extend the term of this Agreement and its
expiration at the end of the Term shall not constitute termination of employment
and the Executive shall not be entitled to the payment of benefits under
Sections 4 and 5 unless he is otherwise entitled to such benefits pursuant to
the terms herein. Furthermore, nothing in the Section 1 shall cause this
Agreement to terminate before both the Company and the Executive have fulfilled
all of their obligations hereunder.
2. CHANGE IN CONTROL.
(a) No compensation shall be payable under this Agreement
unless and until (i) there has been a Change in Control of the Company
while the Executive is still an employee of the Company AND (ii) the
Executive's employment by the Company is terminated for a reason OTHER
THAN one or more of the circumstances specified in Section 3(a)(i)
through (v).
(b) For the purposes of this Agreement, a "Change in Control"
of the Company shall be deemed to have occurred on the first to occur
of the following:
(i) The date any entity or person shall have become
the beneficial owner of, or shall have obtained voting control
over, fifty-one percent (51%) or more of the outstanding
Common Stock of the Company;
(ii) The date the shareholders of the Company approve
a definitive agreement (A) to merge or consolidate the Company
with or into another corporation or other business entity (for
these purposes, each, a "corporation"), in which the Company
is not the continuing or surviving corporation or pursuant to
which any shares of Common Stock of the Company would be
converted into cash, securities or other property of another
corporation, other than a merger or consolidation of the
Company in which holders of Common Stock immediately prior to
the merger or consolidation have the same proportionate
ownership of Common Stock of the surviving corporation
immediately after the merger as immediately before, or (B) to
sell or otherwise dispose of all or substantially all the
assets of the Company; or
(iii) The date there shall have been a change in a
majority of the Board of Directors of the Company within a
12-month period unless the nomination for election by the
Company's shareholders of each new director was approved by
the vote of two-thirds of the directors then still in office
who were in office at the beginning of the 12-month period.
For purposes herein, the term "person" shall mean any individual, corporation,
partnership, group, association or other person, as such term is defined in
Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), other than the Company, a subsidiary of the
Company or any employee benefit plan(s) sponsored or maintained by the Company
or any subsidiary thereof, and the term "beneficial owner" shall have the
meaning given the term in Rule 13d-3 under the Exchange Act.
3. TERMINATION FOLLOWING CHANGE IN CONTROL.
(a) TERMINATION. If a Change in Control of the Company shall
have occurred while the Executive is still an employee of the Company, the
Executive shall be entitled to the payments provided in Sections 4 and 5 herein
upon the termination of the Executive's employment with the Company within the
twenty-four (24) month period following a Change in Control, whether such
termination is by the Executive or by the Company, UNLESS such termination is as
a result of (i) the Executive's death; (ii) the Executive's Disability (as
defined in Section 3(b) below); (iii) the Executive's Retirement (as defined in
Section 3(c) below); (iv) the Executive's termination of employment by the
Company for Cause (as defined in Section 3(d) below); or (v) the Executive's
decision to terminate employment other than for Good Reason (as defined in
Section 3(e) below). For the purposes of this Agreement, the twenty-four (24)
month period following a Change in Control shall be referred to as the
"Termination Period."
(b) DEATH OR DISABILITY.
(i) DISABILITY. In the event that the Executive's
employment terminates because of Disability, the Company shall
have no obligation or liability to the Executive pursuant to
this Agreement by reason of such termination (except as may be
otherwise provided in Section 4(d) herein) and this Agreement
shall terminate upon the Executive's termination of employment
due to Disability; provided, however, that the Executive's
termination of employment due to Disability shall be effective
only at the end of thirty (30) days following the delivery of
written notice by the Company to the Executive of such
termination due to Disability and only if Executive fails to
return to the full-time performance of duties by the end of
such 30-day notice period. For the purposes of this Agreement,
"Disability" shall mean a physical or mental illness or injury
that prevents the Executive from performing the essential
functions of his duties (as they existed immediately before
the illness or injury) on a full-time basis for a period of at
least six (6) consecutive months. The Board of Directors of
the Company (the "Board") shall have sole authority to
determine if a Disability exists.
(ii) DEATH. This Agreement shall terminate
immediately in the event of the death of the Executive
occurring at any time during the Term hereof, and in such
event the Company shall have no obligation or liability to the
Executive or his legal representatives by reason of such
termination (except as may be otherwise provided in Section
4(d) herein).
(c) RETIREMENT. In the event that the Executive's employment
terminates due to his Retirement, the Company shall have no obligation or
liability to the Executive pursuant to this Agreement upon such termination
(except as otherwise provided in Section 4(d) herein), and the Agreement shall
terminate upon the Executive's termination of employment due to such Retirement.
"Retirement" as used in this Agreement shall mean the earlier to occur of (A)
the Executive's normal retirement date under the Company's tax-qualified
retirement plan or any successor plan thereto applicable to the Executive or (B)
the Executive's retirement date under a contract, if any, between the Executive
and the Company providing for his retirement from the employment of the Company
or an affiliate (as defined in Section 11(a) herein) on a date other than such
normal retirement date.
(d) CAUSE.
(i) If the Executive's employment with the Company is
terminated for Cause, the Company shall have no obligation or
liability to the Executive under this Agreement (except as may
be otherwise provided in Section 4(d) herein), and this
Agreement shall terminate upon the Executive's termination of
employment for Cause.
(ii) For purposes of this Agreement, "Cause" shall be
determined solely by the Board in the exercise of good faith
and reasonable judgment, and shall mean the occurrence of any
one or more of the following:
(A) The continued failure of the Executive
to perform his duties with the Company (other than
any such failure resulting from the Executive's
incapacity due to physical or mental illness or any
such failure after the Executive has received a
Notice of Termination without Cause by the Company or
has delivered a Notice of Termination for Good Reason
to the Company) which has not been corrected within
thirty (30) days after a written demand for
performance is delivered to the Executive by the
Board which specifically identifies the manner in
which the Board believes that the Executive has not
substantially performed the Executive's duties;
(B) The Executive's engaging in conduct that
damages or prejudices the Company or any affiliate or
engaging in conduct or activities damaging to the
property, business or reputation of the Company or
any affiliate, including but not limited to breaching
Company policies including those related to equal
employment opportunity and unlawful harassment;
(C) The conviction of the Executive of, or a
plea by the Executive of nolo contendere to, a
felony, or any misdemeanor that involves moral
turpitude;
(D) The Executive's engaging in any act of
fraud, theft, misappropriation, embezzlement or
dishonesty to the material detriment of the Company;
(E) Any diversion by the Executive of a
material business opportunity from the Company
without written Board consent;
(F) Any breach by the Executive of a
material term of the Agreement (including but not
limited to the Executive's breach of any covenant
contained in Section 9 herein); or
(G) The Executive's continued substance
abuse, as determined by the Board after written
notice from the Board and a reasonable opportunity to
undergo appropriate treatment for a reasonable
period.
Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board shall be
conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the
Company. Cause shall not exist unless and until the Company
has delivered to the Executive a copy of a resolution duly
adopted by the majority of the Board (excluding the Executive
if the Executive is a Board member) at a meeting of the Board
called and held for such purpose (after reasonable notice to
the Executive and an opportunity for the Executive, together
with counsel, to be heard before the Board), finding that in
the good faith opinion of the Board an event set forth in any
one or more of clauses (A) through (G) herein has occurred and
specifying the particulars thereof in detail.
(e) GOOD REASON. The Executive may terminate his employment
for Good Reason at any time after a Change of Control during the Termination
Period. For purposes of this Agreement, "Good Reason" shall mean any of the
following:
(i) A material reduction by the Company without the
Executive's written consent in the Executive's basic duties
and responsibilities;
(ii) Any material reduction by the Company without
the Executive's written consent of the Executive's base salary
as in effect on the date hereof (or as the same may be
adjusted with Executive's written consent from time to time
during the Term), other than a reduction which is part of a
salary reduction plan applicable to all officers or all
employees of the Company, as the case may be (and not the
Executive singly);
(iii) Any failure by the Company to continue the
Executive's ability to participate in any plan or arrangement,
including, without limitation, any life insurance, accident,
disability or health insurance plan, thrift plan, pension
plan, retirement plan, profit-sharing plan, or any other
qualified or non-qualified employee benefit plan, bonus plan,
incentive plan, stock option, restricted stock, stock purchase
or other stock-based plan, and all other similar plans or
arrangements which are from time to time made generally
available to officers of the Company and in which the
Executive participates, unless there are substituted therefore
plans or arrangements providing the Executive with essentially
equivalent and no less favorable benefits, or any action or
inaction by the Company which would adversely affect the
Executive's participation in or materially reduce the
Executive's benefits under any such plan or successor plan or
deprive the Executive of any material fringe benefit enjoyed
by the Executive; PROVIDED, HOWEVER, that (A) a reduction in
the Executive's incentive or bonus plan payments due to the
failure to attain certain performance-based objectives or (B)
a reduction in the Executive's benefits due to the Company's
decision to discontinue the availability of any plan or
arrangement to all officers or all employees, as the case may
be (and not the Executive singly), shall not be deemed to
constitute "Good Reason" under this Section 3(e)(iii);
(iv) A relocation of the Company's principal
executive offices to a location in excess of 30 miles from
Greensboro, North Carolina, or the Executive's relocation to
any place other than the location at which the Executive
performed the Executive's duties prior to a Change in Control
of the Company, except for (A) required travel by the
Executive on the Company's business to an extent substantially
consistent with the Executive's business travel obligations
during the 12 months immediately preceding a Change of Control
of the Company or (B) a relocation with the Executive's
express written consent;
(v) Any material reduction in the number of paid
vacation days to which the Executive is entitled at the time
of a Change of Control of the Company (other than a reduction
with the Executive's written consent);
(vi) Any failure by the Company without the
Executive's written consent to obtain the express assumption
of this Agreement by any successor or assignee of the Company
(and parent corporation of such successor or assignee, if
applicable) as provided in Section 11(a) herein.
(f) NOTICE OF TERMINATION. Any termination of the Executive's
employment (i) by the Company due to Disability, Retirement or for Cause or (ii)
by the Executive for Good Reason shall be communicated by a Notice of
Termination. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which shall indicate those specific termination provisions
in this Agreement relied upon and which sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provisions so indicated. For purposes of this
Agreement, no such purported termination by the Company or the Executive shall
be effective without such Notice of Termination.
(g) DATE OF TERMINATION. "Date of Termination" shall mean (i)
if the Executive is terminated by the Company for Disability, 30 days after
Notice of Termination is given to the Executive (provided that the Executive
shall not have returned to the performance of the Executive's duties on a
full-time basis during such 30-day period); (ii) if the Executive is terminated
by the Company for any other reason, the date on which a Notice of Termination
is given (or such later date as is specified in such notice); or (iii) if the
Executive terminates for Good Reason, the date on which a Notice of Termination
is given (or such later date as is specified in such notice).
4. PAYMENT OF COMPENSATION UPON TERMINATION OF EMPLOYMENT. If, during
the Termination Period, the employment of the Executive shall terminate pursuant
to a "Qualifying Termination" (as defined herein), then the Company shall
provide to the Executive the payments described in this Section 4 and, if
applicable, Section 5. For the purposes of the Agreement, a "Qualifying
Termination" means (i) the Company's termination of the Executive's employment
OTHER THAN because of death, Disability, Retirement or Cause, as provided in
Sections 3(b), 3(c) and 3(d) herein, or (ii) the Executive's termination of his
employment for Good Reason pursuant to Section 3(e) herein.
(a) CASH PAYMENTS. If, during the Termination Period, the
employment of the Executive shall terminate pursuant to a Qualifying
Termination, then the Company shall provide to the Executive the following cash
payments:
(i) Within thirty (30) days following the Date of
Termination (or such earlier date, if any, as may be required
under applicable wage payment laws), a lump-sum cash amount
equal to the sum of (A) the Executive's base salary through
the Date of Termination and any bonus amounts which have been
earned or become payable, to the extent not theretofore paid
or deferred, (B) a pro rata portion of the Executive's annual
bonus for the fiscal year in which the Executive's Date of
Termination occurs in an amount at least equal to (1) the
Executive's Bonus Amount, multiplied by (2) a fraction, the
numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of
Termination and the denominator of which is three hundred
sixty-five (365), and reduced by (3) any amounts paid from the
Company's incentive plan for the fiscal year in which the
Executive's Date of Termination occurs and (C) any accrued
vacation pay, to the extent not theretofore paid; plus
(ii) A severance benefit equal to the sum of (i) two
(2) times the Executive's highest annual rate of base salary
during the 12-month period immediately prior to Executive's
Date of Termination, plus (ii) two (2) times the Executive's
Bonus Amount. The severance benefits provided for pursuant to
this Section 4(a)(ii) shall be paid in periodic installments
over the Compensation Period (as defined herein) in accordance
with the normal payroll practices of the Company. For the
purposes of Section 4(a) herein, "Bonus Amount" shall mean the
average annual incentive bonus earned by the Executive under
any incentive bonus plan or plans of the Company (or its
affiliates) during the last three (3) completed fiscal years
of the Company immediately preceding the Executive's Date of
Termination (or such shorter period that the Executive has
been employed by the Company). The two (2) -year period
following the Qualifying Termination of an Executive and
during which the benefits provided pursuant to Section
4(a)(ii) and Section 4(b) shall be provided is referred to
herein as the "Compensation Period."
(b) CONTINUED COVERAGE. If, during the Termination Period, the
employment of the Executive shall terminate pursuant to a Qualifying
Termination, the Company shall continue to provide, during the Compensation
Period, the Executive (and the Executive's dependents, if applicable) with the
same level of medical, dental, vision, accident, disability and life insurance
benefits upon substantially the same terms and conditions (including
contributions required by the Executive for such benefits) as existed
immediately prior to the Executive's Date of Termination; provided, however,
that if the Company is unable to provide any of these benefits under its benefit
plans in effect during the Compensation Period, the Company shall pay to the
Executive an amount sufficient to enable the Executive to procure comparable
benefits on his own. Notwithstanding the foregoing, in the event the Executive
becomes reemployed with another employer and becomes eligible to receive welfare
benefits from such employer, the welfare benefits described herein shall be
secondary to such benefits during the period of the Executive's eligibility, but
only to the extent that the Company reimburses the Executive for any increased
cost and provides any additional benefits necessary to give the Executive the
benefits provided hereunder. The Executive's accrued benefits as of the Date of
Termination under the Company's employee benefit plans shall be paid to the
Executive in accordance with the terms of such plans. In addition, if, during
the Termination Period, the employment of the Executive shall terminate pursuant
to a Qualifying Termination, the Company shall provide the Executive with two
(2) additional years of service credit under all non-qualified retirement plans
and excess benefit plans in which the Executive participated as of his Date of
Termination.
(c) STOCK AWARDS. If, during the Termination Period, the
employment of the Executive shall terminate pursuant to a Qualifying
Termination, then the following shall apply with respect to any stock-based
awards granted by the Company.
(i) STOCK OPTIONS AND STOCK APPRECIATION RIGHTS. All
Company stock options, stock appreciation rights or similar
stock-based awards held by the Executive will be accelerated
and exercisable in full as of the Date of Termination, without
regard to the exercisability or vesting of such awards prior
to the Date of Termination.
(ii) RESTRICTED STOCK. All restrictions on any
restricted stock, performance stock or similar stock-based
awards granted by the Company, including without limitation
any vesting or performance criteria, held by the Executive as
of the Date of Termination shall be removed and such awards
shall be deemed vested and earned in full.
(d) PAYMENTS DUE TO TERMINATION OTHER THAN QUALIFYING
TERMINATION. If, during the Termination Period, the Executive shall terminate
OTHER THAN by reason of a Qualifying Termination, then the Company shall pay to
Executive within thirty (30) days following the Date of Termination (or such
earlier date, if any, as may be required under applicable wage payment laws) a
lump-sum cash amount equal to the sum of (i) Executive's base salary through the
Date of Termination and any bonus amounts which have become payable, to the
extent not theretofore paid or deferred, and (ii) any accrued vacation pay, to
the extent not theretofore paid. The Company may make such additional payments,
and provide such additional benefits, to Executive as the Company and Executive
may agree in writing. The Executive's accrued benefits as of the Date of
Termination under the Company's employee benefit plans shall be paid to
Executive in accordance with the terms of such plans.
5. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment, award,
benefit or distribution (or any acceleration of any payment, award, benefit or
distribution) by the Company (or any of its affiliated entities) or any entity
which effectuates a Change in Control (or any of its affiliated entities) to or
for the benefit of the Executive (whether pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 5) (the "Payments") would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Company shall pay to the Executive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any Excise Tax) imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the sum of (i) the Excise Tax
imposed upon the Payments and (ii) the product of any deductions disallowed
because of the inclusion of the Gross-Up Payment in the Executive's adjusted
gross income and the highest applicable marginal rate of federal income taxation
for the calendar year in which the Gross-Up Payment is to be made. For purposes
of determining the amount of the Gross-Up Payment, the Executive shall be deemed
to (i) pay federal income taxes at the highest marginal rates of federal income
taxation for the calendar year in which the Gross-Up Payment is to be made, (ii)
pay applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-Up Payment is to be made, net
of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes and (iii) have otherwise allowable
deductions for federal income tax purposes at least equal to the Gross-Up
Payment. Notwithstanding the foregoing provisions of this Section 5(a), if it
shall be determined that the Executive is entitled to a Gross-Up Payment, but
that the Payments would not be subject to the Excise Tax if the Payments were
reduced by an amount that is less than 5% of the portion of the Payments that
would be treated as "parachute payments" under Section 280G of the Code, then
the amounts payable to the Executive under this Agreement shall be reduced (but
not below zero) to the maximum amount that could be paid to Executive without
giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment
shall be made to the Executive. The reduction of the amounts payable hereunder,
if applicable, shall be made by reducing first the payments under Section
4(a)(ii), unless an alternative method of reduction is elected by the Executive.
For purposes of reducing the Payments to the Safe Harbor Cap, only amounts
payable under this Agreement (and no other Payments) shall be reduced. If the
reduction of the amounts payable hereunder would not result in a reduction of
the Payments to the Safe Harbor Cap, no amounts payable under this Agreement
shall be reduced pursuant to this provision.
(b) Subject to the provisions of Section 5(a), all
determinations required to be made under this Section 5, including whether and
when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the
reduction of the Payments to the Safe Harbor Cap and the assumptions to be
utilized in arriving at such determinations, shall be made by the public
accounting firm that is retained by the Company as of the date immediately prior
to the Change in Control (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive within forty-five
(45) business days of the receipt of notice from the Company or the Executive
that there has been a Payment, or such earlier time as is requested by the
Company (collectively, the "Determination"). In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, the Company and the Executive may agree to
appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company and the Company shall enter into any
agreement requested by the Accounting Firm in connection with the performance of
the services hereunder. The Gross-Up Payment under this Section 5 with respect
to any Payments shall be made no later than thirty (30) days following such
Payment. If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall furnish the Executive with a written opinion to such effect,
and to the effect that failure to report the Excise Tax, if any, on the
Executive's applicable federal income tax return will not result in the
imposition of a negligence or similar penalty. In the event the Accounting Firm
determines that the Payments shall be reduced to the Safe Harbor Cap, it shall
furnish the Executive with a written opinion to such effect. The Determination
by the Accounting Firm shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the Determination, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment") or Gross-Up
Payments are made by the Company which should not have been made
("Overpayment"), consistent with the calculations required to be made hereunder.
In the event that the Executive thereafter is required to make payment of any
Excise Tax or additional Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment (together
with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall
be promptly paid by the Company to or for the benefit of Executive. In the event
the amount of the Gross-Up Payment exceeds the amount necessary to reimburse the
Executive for his Excise Tax, the Accounting Firm shall determine the amount of
the Overpayment that has been made and any such Overpayment (together with
interest at the rate provided in Section 1274(b)(2) of the Code) shall be
promptly paid by the Executive (to the extent he has received a refund if the
applicable Excise Tax has been paid to the Internal Revenue Service) to or for
the benefit of the Company. The Executive shall cooperate, to the extent his
expenses are reimbursed by the Company, with any reasonable requests by the
Company in connection with any contests or disputes with the Internal Revenue
Service in connection with the Excise Tax.
6. WITHHOLDING. The Company shall withhold from any amount payable to
the Executive (or to his beneficiary or estate or any other person) hereunder
all federal, state, local or other taxes that the Company may reasonably
determine are required to be withheld pursuant to any applicable law, rule or
regulation.
7. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in this Agreement shall be
deemed to entitle Executive to continued employment with the Company or any of
its affiliates, and if Executive's employment with the Company or an affiliate
shall terminate prior to a Change in Control, Executive shall have no further
rights under this Agreement (except as otherwise provided hereunder); provided,
however, that, notwithstanding the foregoing, any termination of Executive's
employment during the Termination Period shall be subject to the provisions of
this Agreement.
8. OFFSET; NO OBLIGATION TO MITIGATE DAMAGES.
(a) OFFSET. The Company's obligation to make any payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall be subject to, and may be reduced by the amount related to, any
right of set-off, counterclaim, recoupment, defense or other claim, right or
action which the Company may have against the Executive.
(b) NO OBLIGATION TO MITIGATE. In no event shall the Executive
be obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the provisions
of this Agreement and such amounts shall not be reduced whether or not the
Executive obtains other employment (except as otherwise provided in Section 4(b)
with respect to the payment of welfare plan benefits).
9. CONFIDENTIALITY; COMPETITION; SOLICITATION.
(a) COVENANTS OF EXECUTIVE. The Company and the Executive
recognize that the Executive's services are special and unique and that the
provisions herein for compensation under Section 4 and Section 5 are partly in
consideration of and conditioned upon the Executive's compliance with the
covenants contained in this Section 9. Accordingly, during the Term of the
Agreement and until the end of the Compensation Period (as defined in Section
4(a)(ii) herein), the Executive shall be subject to the covenants contained in
Sections 9(b), 9(c) and 9(d) herein.
(b) CONFIDENTIALITY. During the Compensation Period, (i) the
Executive covenants and agrees that he shall hold in a fiduciary capacity for
the benefit of the Company all secret or confidential information, knowledge or
data relating to the Company or any of its affiliates and their respective
businesses, which shall have been obtained by the Executive during the
Executive's employment by the Company or any of its affiliates and which shall
not be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement); and (ii) the
Executive shall not, without the prior written consent of the Company or as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it.
(c) SOLICITATION. During the Compensation Period, the
Executive covenants and agrees that he shall not directly or indirectly disrupt,
damage or interfere with the operation or business of the Company by soliciting
or recruiting the employees of the Company or an affiliate to work for Executive
or other persons or entities.
(d) NON-COMPETITION. During the Compensation Period, the
Executive covenants and agrees that he shall not render services for any
organization or engage directly or indirectly in any business that, in the
opinion of the Company, competes with or is in conflict with the interests of
the Company in the Noncompetition Area. For purposes of this Section 9(d), the
"Noncompetition Area" shall mean the following geographic area:
(i) The Noncompetition Area shall mean any area
within or without the United States in which the Company or an
affiliate has operations, including but not limited to any area within
a 30-mile radius of any of the following: Guilford County, North
Carolina; Boston, Massachusetts; Cedar Rapids, Iowa; Scotts Valley,
California; Phoenix, Arizona; Reading, United Kingdom; Copenhagen,
Denmark; Pandrup, Denmark; Oulu, Finland; and Taiwan, ROC.
(ii) In the event the preceding paragraph shall be
determined by judicial action to define too broad a territory to be
enforceable, the Noncompetition Area shall mean any area within a
30-mile radius of any of the following: Guilford County, North
Carolina; Boston, Massachusetts; Cedar Rapids, Iowa; Scotts Valley,
California; and Phoenix, Arizona.
(iii) In the event that the two preceding paragraphs
shall be determined by judicial action to define too broad a territory
to be enforceable, the Noncompetition Area shall mean any area within a
30-mile radius of Guilford County, North Carolina.
(e) ENFORCEABILITY. If any of the restrictions contained in
this Section 9 shall be deemed to be unenforceable by reason of the extent,
duration, geographical scope or other provisions thereof, then the parties
hereto contemplate that the court shall reduce such extent, duration,
geographical scope or other provision hereof and enforce this Section 9 in its
reduced form for all purposes in the manner contemplated thereby.
(f) FAILURE TO COMPLY. The Executive acknowledges that the
covenants included in Section 9 of this Agreement are crucial to the success of
the Company and that violation of the covenants would immeasurably damage the
Company and/or its affiliates. In the event that the Executive shall fail to
comply with any provision of this Section 9, and the failure shall continue for
ten (10) days following delivery of notice by the Company to the Executive, all
rights of the Executive and any person claiming under or through him to the
payments or benefits described in this Agreement shall thereupon terminate, and
no person shall be entitled thereafter to receive any payments or benefits
hereunder. In addition to the foregoing, in the event of a breach by the
Executive of the provisions of this Section 9, the Company shall have and may
exercise any and all other rights and remedies available to the Company at law
or otherwise, including but not limited to obtaining an injunction from a court
of competent jurisdiction enjoining and restraining the Executive from
committing a violation, and the Executive hereby consents to the issuance of an
injunction. The provisions of this Section 9(f) shall control in the event that
the Executive fails to comply with any covenant or term contained in Section 9
herein, notwithstanding the terms of Section 17 herein.
10. NONALIENABILITY. No right of or amount payable to the Executive
under this Agreement shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, hypothecation, encumbrance, charge,
execution, attachment, levy or similar process or to setoff against any
obligations or to assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any action specified in the immediately preceding
sentence shall be void. However, this Section 10 shall not prohibit the
Executive from designating one or more persons, on a form satisfactory to the
Company, as beneficiary to receive amounts payable to him under this Agreement
in the event that he should die before receiving them.
11. SUCCESSORS AND ASSIGNS.
(a) THE COMPANY. As used in this Agreement, "Company" shall
mean the Company as defined above and any successor or assignee to its business
and/or assets as aforesaid which assumes the obligations of the Company under
this Agreement or which otherwise becomes bound by all of the terms and
provisions of this Agreement by operation of law. If at any time during the term
of this Agreement the Executive is employed by an affiliate (as defined herein)
of the Company, such indirect employment of the Executive by the Company shall
not excuse the Company from performing its obligations under this Agreement as
if the Executive were directly employed by the Company, and the Company agrees
that it shall pay or shall cause such employer to pay any amounts owed to the
Executive pursuant to Section 4 and Section 5 hereof, notwithstanding any such
indirect employment relationship. For the purposes of this Agreement, an
"affiliate" of the Company shall mean a corporation or other entity a majority
of the voting securities of which is beneficially owned by the Company, or any
other corporation or other entity controlling, controlled by, or under common
control with the Company.
(b) THE EXECUTIVE. This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts are still payable to him
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's beneficiary (in
accordance with Section 10 herein) or, if there be no such beneficiary, to the
Executive's estate.
12. WAIVER; GOVERNING LAW. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina, without regard to the
conflict of laws provisions of any state.
13. ENTIRE AGREEMENT; AMENDMENT. This Agreement contains all of the
terms agreed upon between the Executive and the Company with respect to the
subject matter hereof and replaces and supersedes all prior understandings and
agreements (including, without limitation, the Predecessor Agreement) between
the Executive and the Company with respect to the matters contemplated in the
Agreement (except for any understandings or agreements reflected in a separate
non-competition, confidentiality, invention or other similar agreement or
agreements between the Company and the Executive). Without limiting the effect
of the foregoing, the Executive agrees that this Agreement satisfies any rights
he may have had under any prior understanding or agreement (including, without
limitation, the Predecessor Agreement) between the Executive and the Company
with respect to the subject matters described therein. The Executive and the
Company agree that no term, provision or condition of this Agreement shall be
held to be altered, amended, changed or waived in any respect except as
evidenced by written agreement of the Executive and the Company.
14. REASONABLE AND NECESSARY RESTRICTIONS. The Executive acknowledges
that the restrictions, prohibitions and other provisions set forth in this
Agreement, including without limitation the provisions of Section 9 herein, are
reasonable, fair and equitable in scope, terms and duration, are necessary to
protect the legitimate business interests of the Company, and are a material
inducement to the Company to enter into this Agreement. The Executive covenants
that he or she will not challenge the enforceability of this Agreement nor will
he or she raise any equitable defense to its enforcement.
15. NO TRUST FUND; UNFUNDED OBLIGATION. The obligation of the Company
to make payments hereunder shall constitute an unsecured liability of the
Company to the Executive. The Company shall not be required to establish or
maintain any special or separate fund, or otherwise to segregate assets to
assure that such payments shall be made, and the Executive shall not have any
interest in any particular assets of the Company by reason of its obligations
hereunder. Nothing contained in this Agreement shall create or be construed as
creating a trust of any kind or any other fiduciary relationship between or
among the Company, the Executive, or any other person. To the extent that any
person acquires a right to receive payment from the Company, such right shall be
no greater than the right of an unsecured creditor of the Company.
16. NOTICES. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered, one business day after being sent
for overnight delivery by a nationally recognized overnight courier or three
business days after being mailed by United States registered mail,
return-receipt requested, postage-prepaid, addressed as follows:
If to the Company:
RF Micro Devices, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Chief Financial Officer
If to the Executive:
Xxxxxx X. Xxxxxxxxxxx
RF Micro Devices, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
or such other address as either party have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
17. ARBITRATION, LEGAL FEES AND EXPENSES. In the event of any
controversy, claim or dispute between the parties hereto arising out of or
relating to this Agreement (except for any dispute or controversy arising under
or in connection with Section 9), the matter shall be determined by arbitration,
which shall take place in Guilford County, North Carolina, under the rules of
the American Arbitration Association; and a judgment upon such award may be
entered in any court having jurisdiction thereof. Any decision or award of such
arbitrator shall be final and binding upon the parties. The parties hereby
consent to the jurisdiction of such arbitrator and of any court having
jurisdiction to enter judgment upon and enforce any action taken by such
arbitrator. The Company shall pay all reasonable legal fees and expenses that
the Executive may incur as a result of the Company's contesting the validity,
enforceability or the Executive's interpretation of, or determinations under,
this Agreement.
18. SEVERABILITY. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part, such invalidity or
unenforceability shall not affect any other provision of this Agreement or part
thereof, each of which shall remain in full force and effect.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
20. CAPTIONS; GENDER. The headings and captions contained in the
Agreement are intended for convenience of reference only and have no substantive
significance. References to the masculine gender shall include references to the
feminine gender, and vice versa.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date and year first above written.
RF MICRO DEVICES, INC.
By: /s/ XXXXXXX XXXX
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Printed Name: XXXXXXX XXXX
----------------------------------------
Title: VP & TREASURER
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ATTEST:
---------------------------
Secretary
[Corporate Seal]
EXECUTIVE
/s/ XXXXXX X. XXXXXXXXXXX
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Printed Name: XXXXXX X. XXXXXXXXXXX
--------------------------------------
