EXHIBIT 10.6

RF MICRO DEVICES, INC.

DIRECTOR COMPENSATION PLAN















 

RF MICRO DEVICES, INC.

DIRECTOR COMPENSATION PLAN

1.                  Purpose.

The purpose of the RF Micro Devices, Inc. Director Compensation Plan (the " Plan ") is to formally establish and document the terms of cash and equity compensation payable to non-employee members of the Board of Directors (the " Board " or the " Board of Directors ") of RF Micro Devices, Inc., a North Carolina corporation (the " Company ").

2.                  Eligibility. 

Each member of the Board who is not an employee of the Company or any of its subsidiaries (each, a " Director ") is eligible to receive compensation for services as a director under the Plan.

3.                  Administration. 

The Plan shall be administered by the Board unless the Board delegates all or part of its authority to administer the Plan to the Compensation Committee (the " Committee ") in a manner that is consistent with the Company's Corporate Governance Guidelines, the Compensation Committee charter and other applicable laws, rules and regulations.  Unless the Board determines otherwise, the Committee shall be comprised solely of two or more " non-employee directors ," as such term is defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the " Exchange Act "), or as may otherwise be permitted under Rule 16b-3.  For the purposes of the Plan, the term " Administrator " shall refer to the Board, and upon its delegation to the Committee of authority to administer the Plan, the Committee.  The Administrator may also delegate to one or more officers or employees of the Company the authority to manage the record-keeping and other routine administrative duties under the Plan.

4.                  Payment of Annual Fees. 

The Board shall establish the annual retainer fees, committee chair fees and any additional cash fees to be paid to Directors for any Plan year (" Plan Year ").  Such fees shall be referred to herein as the " Annual Fees ."  A Plan Year shall coincide with the Company's fiscal year unless the Board determines otherwise.  Annual Fees shall be paid in cash quarterly on, or as close as practicable to, the first business day following the end of the quarter during which the Annual Fees were earned.    Quarterly payments of Annual Fees shall be pro rated if a Director's service on the Board terminates or commences during a fiscal quarter.  The Board may modify the Annual Fees, or any component of such fees, at any time and from time to time, as reflected in an amendment to the Plan, by Board resolution or by other means.   In addition, the Board may at any time and from time to time authorize the payment of additional fees for service on the Board (for instance, due to service on a special committee or for other extra service) outside of the Plan.

5.                  Grant of Initial Equity Awards and Annual Equity Awards.

(a)          Each Director may elect to receive equity awards (" Equity Awards ") for shares of the Company's common stock (the " Common Stock ") in the form of nonqualified stock options (" Options ") and/or restricted stock units (" RSUs ") as provided in the Plan and subject to the terms of the Company's 2006 Directors Stock Option Plan, as amended and restated effective May 7, 2009 (the " 2006 Plan "), with respect to the grant of Options, and the Company's 2003 Stock Incentive Plan, as amended June 1, 2006 (the " 2003 Plan ") (the 2003 Plan, the 2006 Plan and any successor equity plan(s) being also referred to herein individually as a " Stock Plan "), with respect to the grant of RSUs.   An initial Equity Award  (" Initial Equity Award ") may be in the form of an Initial Option and/or an Initial RSU (each as defined below).  An annual Equity Award (" Annual Equity Award ") may be in the form of an Annual Option and/or an Annual RSU (each as defined below).   Shares of Common Stock subject to Equity Awards shall only be issued under the applicable Stock Plan, and no shares shall be issued under this Plan.

(b)         Grant of Initial Options and Annual Options.   Unless a Director makes an election to receive Initial RSUs and/or Annual RSUs as provided in Section 5(c) or Section 5(d) herein, each eligible Director shall be granted Initial Options and/or Annual Options (each, as defined in the 2006 Plan) under the 2006 Plan. Such Annual Options and Initial Options shall be subject to, and governed by the terms of, the 2006 Plan and the individual stock option agreement related to each such Option grant.  If a Director makes a timely election to receive 50% of the total value (as defined below) of his Equity Awards in the form of an Initial RSU and/or an Annual RSU as provided in this Section 5 but also elects to receive 50% of the total value of his Equity Awards in the form of an Initial Option and/or an Annual Option, such Initial Option and/or Annual Option shall be subject to all of the other terms applicable to Initial Options and/or Annual Options, as the case may be, under the 2006 Plan, except that the number of shares subject to such Initial Option and/or Annual Option shall be reduced as provided in Section 5(c) and/or Section 5(d) herein.  If a Director makes a timely election to receive all of his Initial Equity Award in the form of an Initial RSU, he will not also be granted an Initial Option.  If a Director makes a timely election to receive all of his Annual Equity Award in the form of an Annual RSU, he will not also be granted an Annual Option.

(c)          Elections Related to Initial Equity Awards; Grant of Initial RSUs .

(i)                  Each Director shall receive an Initial Option for 50,000 shares of Common Stock as provided under the terms of the 2006 Plan unless he makes a timely election to receive an RSU grant (the " Initial RSU ") in lieu of all or 50% of the total value of the Initial Option.  Such election must be in writing and must be made at least 10 calendar days (or within such other time period established by the Administrator) prior to the date of grant  (the " Grant Date ") of the Initial Option (as determined under the 2006 Plan), and such election shall (unless the Administrator determines otherwise) be irrevocable by the Director.  If the Director elects to receive an Initial RSU, the number of shares subject to his Initial Option shall be correspondingly reduced so that the aggregate of the value (as defined herein) of the Initial Option plus the value of the Initial RSU (as defined herein) does not exceed the total value of the Initial Option that would otherwise be granted under the 2006 Plan.  For the purposes herein, the " total value " of an Initial Option shall equal the number of shares subject to the Initial Option (that is, 50,000 shares) multiplied by the Black-Scholes value or similar methodology, as used for compensation expense valuation purposes in the Company's financial statements (the " Black-Scholes value "), of the Option on (or as close in time as practicable to) the Grant Date.  The " value " of an Initial RSU shall be determined by multiplying the number of shares subject to the Initial RSU by the Black-Scholes value of the RSU on (or as close in time as practicable to) the Grant Date. The " value " of an Initial Option shall equal the number of shares subject to the Initial Option multiplied by the Black-Scholes value of the Option on (or as close in time as practicable to) the Grant Date.   If the Director elects to receive all of his Initial Equity Award in the form of an Initial RSU, the number of shares subject to the Initial RSU will be equal to the total value of the Initial Option divided by the Black-Scholes value for the RSU on (or as close in time as practicable to) the Grant Date.  If the Director elects to take 50% of the total value of his Initial Equity Award in the form of an Initial RSU and 50% of the total value in the form of an Initial Option, the number of shares subject to the Initial Option will be reduced by 50% and the number of shares subject to the Initial RSU will equal 50% of the total value of the Initial Option divided by the Black-Scholes value for the RSU on (or as close in time as practicable to) the Grant Date. The value of a Director's Initial RSU plus the value of the Director's Initial Option shall be as close as practicable to, but may not exceed, the total value of the Initial Option. 

2

Example:  Below is an example of the implied math for illustration purposes only; the same principles would apply with respect to annual equity award calculations:

Initial Option = 50,000 shares

Black-Scholes value of Initial RSU (FMV of Common Stock) = $1.25

Black-Scholes value of the Initial Option = $0.60 per share

Total Value of Initial Option = $30,000.00

 If Director elects 100% RSU:

Number of shares subject to Initial RSU = $30,000 (total value of Initial Option) divided by $1.25 (Black-Scholes value of RSU on grant date)

Number of shares subject to Initial RSU = 24,000 shares

 If Director elects 50% RSU /50% Option:

Number of shares subject to Initial Option = 50,000 multiplied by 50%

Number of shares subject to Initial Option = 25,000 shares

Number of shares subject to Initial RSU = $15,000 (50 % total value of Initial Option) divided by $1.25 (Black-Scholes value of RSU on grant date)

Number of shares subject to Initial RSU = 12,000 shares

(ii)                Terms of Initial RSUs :  An Initial RSU shall be granted under, and subject to the terms of, the 2003 Plan (or other applicable Stock Plan) and related initial RSU award agreement.  Without limiting the foregoing, the following terms shall apply:

(A)              The Grant Date shall be the date the Initial Option would otherwise be granted under the 2006 Plan (or other applicable Stock Plan).

(B)              An Initial RSU shall vest with respect to one-third of the shares subject to the Initial RSU on the Grant Date and shall vest with respect to the remaining two thirds of the shares subject to the Initial RSU in two equal annual installments on each of the first and second anniversaries of the Grant Date, so that the Initial RSU will be vested in full on the second anniversary of the Grant Date, provided that the Director remains in service on the Board on each such vesting date.   Notwithstanding the foregoing, however, an Initial RSU shall vest in full upon a Change of Control (as defined under the 2003 Plan) of the Company. 

(C)              Unless the Admini