AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (the
“Agreement”) is entered into effective as of December
31, 2008, by and between RF MICRO DEVICES, INC., a North Carolina
corporation (the “Company”), and BARRY D. CHURCH (the
“Executive”).
WHEREAS, the Executive has been employed by 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, this Agreement is intended to remove such distractions and
to reinforce the continued attention and dedication of the
Executive to his assigned duties; and
WHEREAS, the Executive and the Company have previously entered into
a Change in Control Agreement effective as of March 1, 2001, as
amended by Amendment No. 1 thereto dated as of June 9, 2005 (the
“Predecessor Agreement”); and
WHEREAS, the Executive and the Company desire to amend and restate
the Predecessor Agreement to, among other things, (i) comply
with Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), and all guidance promulgated thereunder,
including the final Treasury Regulations (collectively, “Code
Section 409A”), and (ii) reflect certain current
developments and best practices and other revisions agreed to by
the
parties;
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) December 31, 2009, if no Change in
Control has occurred before that date; provided, however, that
commencing on January 1, 2010 and each year thereafter, the term of
this Agreement shall automatically be extended for an additional
one year unless, not later than October 1 of the previous 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 this 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, forty percent
(40%) 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 holders of the
Company’s Common Stock immediately prior to the merger or
consolidation have voting control over less than sixty percent
(60%) of the voting securities of the surviving corporation
outstanding immediately after such merger or consolidation, 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 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 a Notice
of Termination (as defined in Section 3(f) below) due to Disability
by the Company to the Executive 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 (i) the
Executive’s normal retirement date under the Company’s
tax-qualified retirement plan or any successor plan thereto
applicable to the Executive or (ii) 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
specifically provided herein), and this Agreement shall terminate
upon the Executive’s termination of employment for
Cause.
(ii)
For purposes of this Agreement, “Cause” shall mean the
occurrence of any one or more of the following:
(A)
The willful and 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 willfully or recklessly engaging in conduct
that damages the business or reputation of Company or any
Affiliate;
(C)
The conviction of the Executive by a court of competent
jurisdiction of, or a plea by the Executive of “guilty”
or “no contest” 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 for his own personal benefit without written
consent of the Board that continues for a period of thirty (30)
days after written notice from the Company to the
Executive;
(F)
Any willful breach by the Executive of a material term of this
Agreement (including but not limited to, any covenant contained in
Section 9 of this Agreement) that continues for a period of thirty
(30) days after written notice from the Company to the
Executive;
(G)
The repeated use of alcohol by the Executive in a manner that
materially interferes with the performance of his duties or the
illegal use by the Executive of a “controlled
substance” (as defined in the North Carolina Controlled
Substance Act, N.C. Gen. Stat., Chapter 90, Section 86 to
113.8);
(H)
Any willful and material violation of any provision of the
Company’s Corporate Governance Guidelines, the
Company’s Code of Business Conduct and Ethics and other
similar codes, policies and guidelines adopted from time to time by
the Board (including, but not limited to, those policies related to
equal employment opportunity and harassment); or
(I)
The Executive’s willful and material violation of the
requirements of the Sarbanes-Oxley Act of 2002 or any other federal
or state securities law, rule or regulation, including, without
limitation, the Executive’s engagement in any willful conduct
that results in the Executive’s obligation to reimburse the
Company for the amount of any bonus, incentive-based compensation,
equity-based compensation, profits realized from the sale of the
Company’s securities or other compensation pursuant to
application of the provisions of Section 304 of the
Sarbanes-Oxley Act of 2002.
Cause shall be determined solely by the Board in the exercise of
good faith and reasonable judgment; provided, however, that the
Executive shall retain the right to contest any determination of
Cause through appropriate legal means. For purposes of this
provision, no act or failure to act on the part of the Executive
shall be considered “willful” unless it is done, or
omitted to be done, by the Executive in bad faith or without a
reasonable belief that the Executive’s action or omission was
in the best interests of the Company. Cause shall not include
the Executive’s Disability.
(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)
Any 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 of the Executive’s base
salary, other than a reduction in accordance with the
Executive’s written consent or that is part of a salary
reduction plan implemented by the Board and applicable on a
proportionate basis to all officers or all employees, 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 (A) the Company’s 2003 Stock
Incentive Plan or any other equity-based compensation plans
established by the Company for the benefit of key employees,
(B) any tax-qualified retirement plans sponsored by the
Company for the benefit of its employees and any non-qualified
deferred compensation plans or arrangements sponsored by the
Company for the benefit of certain key employees, or (C) any
welfare benefit plans and arrangements sponsored from time to time
by the Company for the benefit of its employees, including, without
limitation, any life insurance, accident, disability, medical,
vision, prescription drug, vacation, sick leave and dental plans,
policies or arrangements which are generally available to the
employees of the Company (“Welfare Benefit Plans”) 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 therefor
plans or arrangements providing the Executive with essentially
equivalent and no less favorable benefits, or any action or
inaction by the Company that 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 (X) a reduction in the
Executive’s Cash Bonus Plan (“Cash Bonus Plan”)
or successor cash incentive compensation plan payments due to the
failure to attain certain performance-based objectives, (Y) a
reduction in the Executive’s benefits due to the
Company’s decision to discontinue the availability of or
modify or amend any plan or arrangement for all officers or all
employees, as the case may be (and not the Executive singly) or
(Z) the substitution for any incentive or bonus plan of an
alternate plan or arrangement having a reasonably equivalent
opportunity to earn payments comparable to those earned under the
current plans, 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 thirty (30) miles from Greensboro, North
Carolina without 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 the Change in Control of
the Company (other than a reduction with the Executive’s
written consent); or
(vi)
Any failure of the Company without the Executive’s written
consent to obtain the 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.
Notwithstanding the foregoing, the occurrence of an event that
would otherwise constitute Good Reason under this Section 3(e)
shall cease to be an event constituting Good Reason if the
Executive fails to provide the Company with notice of the
occurrence of any of the foregoing within the thirty (30) day
period immediately following the date on which the Executive first
becomes aware of the occurrence of such event or the last
occurrence of any event, which taken together with any other event,
is alleged to constitute Good Reason.
(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 for 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 accrued but unpaid 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 (as defined below), 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. The
lump-sum cash payment to be made to the Executive pursuant to this
Section 4(a)(i) is intended to be exempt from Code Section 409A
under the exemption found in Regulation Section 1.409A-(b)(4) for
short-term deferrals.
(ii)
A severance benefit (the “Severance Benefit”) payable
in accordance with the provisions of this Section 4(a)(ii) equal to
the sum of (i) one (1) 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) one (1) times the
Executive’s Bonus Amount. That portion of
the Severance Benefit payable to the Executive pursuant to this
Section 4(a)(ii) that exceeds the “separation pay
limit,” if any , shall be paid to the Executive in a
lump sum payment within thirty (30) days following the Date of
Termination (or such earlier date, if any, as may be required under
applicable wage payment laws). The “separation pay
limit” shall mean two (2) times the lesser of: (1) the sum of
the Executive’s annualized compensation based upon the annual
rate of pay for services provided to the Company for the calendar
year immediately preceding the calendar year in which the
Executive’s Date of Termination occurs (adjusted for any
increase during that calendar year that was expected to continue
indefinitely if the Executive had not terminated employment); and
(2) the maximum dollar amount of compensation that may be taken
into account under a tax-qualified retirement plan under Code
Section 401(a)(17) for the year in which his Date of Termination
occurs. The lump-sum payment to be made to the Executive
pursuant to this Section 4(a)(ii) is intended to be exempt from
Code Section 409A under the exemption found in Regulation Section
1.409A-(b)(4) for short-term deferrals. The remaining portion
of the Severance Benefit payable to the Executive 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. Notwithstanding the
foregoing, in no event shall such remaining portion of the
Severance Benefit be paid to the Executive later than December 31
of the second calendar year following the calendar year in which
Executive’s Termination Date occurs. The payments
to be made to the Executive pursuant to the immediately preceding
sentence of this Section 4(a)(ii) are intended to be exempt from
Code Section 409A under the exemption found in Regulation Section
1.409A-(b)(9)(iii) for separation pay plans (i.e., the so-called
“two times” pay exemption).
(iii)
For purposes of this Section 4(a), “Bonus Amount” shall
mean the Executive’s target annual bonus opportunity as
defined in the Company’s Cash Bonus Plan or successor cash
incentive compensation plan for the year in which his Date of
Termination occurs. The one (1)–year period following
the Qualifying Termination of the Executive for which the benefits
provided pursuant to Section 4(a) and 4(b) shall be or shall have
been 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 Executive shall be entitled to the
following special benefits:
(i)
The Executive shall be entitled to participate (treating the
Executive as an active employee for this purpose) in the group
health plan or program and the group dental plan or program (in
each case whether insured or self-insured, or any combination
thereof) provided by the Company for the benefit of its active
employees and their dependents (the “Company Health Care
Plan”) during the Compensation Period (the
“Continuation Coverage”). The Company shall use its
best efforts to provide the Executive and his dependents with the
Continuation Coverage under the Company Health Care Plan,
including, if necessary, amending the applicable provisions of the
Company Health Care Plan and negotiating the addition of any
necessary riders to any group health insurance contract.
During the Compensation Period, the Executive shall pay the entire
premium required for the Continuation Coverage under the Company
Health Care Plan. The premium required for the Continuation
Coverage during the first eighteen (18) months of the Compensation
Period (or the entire Compensation Period if the duration of the
Compensation Period is less than eighteen (18) months) shall be
equal to the premium required by the continuation of coverage
requirements of Section 4980B of the Code and Part 6 of Title I of
the Employee Retirement Income Security Act of 1974, as amended
(“COBRA”), for such Continuation Coverage (the
“COBRA Rate”). During the remainder of the Compensation
Period, if any, the premium required for the Continuation Coverage
shall be the greater of the COBRA Rate or the actuarially
determined cost of the Continuation Coverage as determined by an
actuary selected by the Company.
(ii)
If at any time during the Compensation Period the Company is unable
for whatever reason to provide the Executive with the Continuation
Coverage under the Company Health Care Plan, the Company shall use
its best efforts to provide the Executive coverage under an
individual policy of health insurance (the “Individual Health
Care Policy”) providing coverage which is subs
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