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RETIREMENT AND TRANSITION AGREEMENT
This Retirement and Transition Agreement (the "Agreement") is
entered into between William J. Pratt, a resident of North Carolina
("Employee"), and RF Micro Devices, Inc., a North Carolina
corporation ("Employer"), this the 31st day of March, 2008 (the
"Effective Date").
WHEREAS, Employee currently is in the position of Corporate Vice
President and Chief Technical Officer; and
WHEREAS, Employee has indicated his desire to retire from his
employment; and
WHEREAS, the parties wish for Employee's retirement from his
employment to be achieved in an amicable fashion and with a clear
understanding of their rights and liabilities;
THEREFORE, the parties agree as follows:
1. Retirement
Date . Employee will retire from employment with Employer
and all of its subsidiaries and affiliates effective March 31, 2008
(the "Retirement Date"). As of the Retirement Date, Employee
will be deemed to have tendered his resignation as an officer and
from all other positions with Employer and its subsidiaries and
affiliates other than as a director of Employer.
2.
Compensation .
(a) Vacation
Payout . Employee will be paid for his accrued but unused
vacation pay under the terms of Employer's former vacation policy
in the amount of Twenty Thousand Nine Hundred Seventy Dollars and
Thirty-Six Cents ($20,970.36). Such payment will be made in a
lump sum on Employer's first regular pay date following the
Retirement Date. Employee understands and agrees that
Employee is not entitled to any additional payment under Employer's
current Paid Time Off policy.
(b) Post-Retirement
Compensation . Employer will pay to Employee a lump sum
payment of Five Hundred Seventy-Seven Thousand Five Hundred and
00/100 Dollars ($577,500.00). Such payment will be subject to
normal tax withholdings. Such payment will be made within ten
(10) business days of the Retirement Date. In addition, in
consideration of Employee agreeing to make himself available to
provide consulting services to Employer under Section 3, during the
two-year period commencing on the Retirement Date, Employee will
continue to be paid at the rate of $150,000.00 per annum.
Such payments shall be made in equal installments in arrears not
less frequently than once per month and will be subject to normal
tax withholdings.
(c) Payments for COBRA
Continuation Coverage; Special Bonus . Upon retirement,
Employee will be offered the option of continuing his current
individual and family dependent medical and dental insurance
coverage (the "Continuation Coverage") under Employer's medical and
dental plans pursuant to the requirements of the Consolidated
Omnibus Budget Reconciliation Act ("COBRA"). If Employee
elects Continuation Coverage under COBRA, Employer will pay
Employee's COBRA premium for 18 months from the Retirement Date or
until Employee is no longer eligible for Continuation Coverage
under COBRA, whichever period is shorter. Thereafter, for a
period of two years, less the period during which COBRA is provided
by Employer, Employee will acquire for himself a Medicare
supplemental insurance policy and for his wife a medical and dental
insurance policy, both providing reasonably equivalent coverage to
the coverage presently provided by Employer under its medical and
dental plans as of the Effective Date, and Employer will reimburse
Employee for the cost of both such policies. With respect to each
calendar year during which the Continuation Coverage is provided to
Employee and his dependents pursuant to this subsection (c) and
each calendar year during which the private policies are reimbursed
by Employer, to the extent that the Continuation Coverage benefits
and the reimbursements constitute taxable income to Employee,
Employer shall report as income to Employee for federal and state
income tax purposes the value of the Continuation Coverage and the
reimbursements. In addition, Employer shall pay to Employee
an annual special bonus equal to the amount necessary to pay any
federal income tax, state income tax, or other tax imposed upon
Employee as a result of the receipt of the Continuation Coverage,
the reimbursements and the special bonus provided for in this
subsection (c). For purposes of determining the amount of the
special bonus, Employee shall be deemed to pay federal income taxes
at the highest marginal rate of federal income taxation for
individuals in the calendar year in which the special bonus is
paid. In addition, Employee shall be deemed to pay state
income taxes at a rate determined in accordance with the following
formula:
(1
- (highest marginal rate of federal income taxation for
individuals)) X (highest marginal rate of income tax in the state
in which Employee is domiciled for individuals in the calendar year
in which the special bonus is paid).
The amount of the special bonus shall be determined by Employer in
good faith. The special bonus shall be paid to Employee in a
single lump sum payment on or prior to December 31 of each calendar
year during which the Continuation Coverage or the reimbursements
are provided pursuant to this subsection (c).
(d) Equity Awards
. Upon retirement, any stock options granted to Employee
under the 2003 Stock Incentive Plan of RF Micro Devices, Inc., as
amended (the "2003 Plan"), pursuant to any "Stock Option Agreement
(Senior Officers)" shall continue to vest and be exercisable
following retirement in accordance with the terms of such
agreement, including but not limited to Section 2 of Schedule A
thereto, and Employer agrees that the Administrator (as defined
in the 2003 Plan) shall not exercise negative discretion to
alter such post-termination exercise and vesting terms. Upon
retirement, any restricted stock awards ("RSAs") granted to
Employee under the 2003 Plan pursuant to any "Restricted Stock
Award Agreement (Service-Based Award for Senior Officers)" shall
continue to vest following termination in accordance with the terms
of such agreement, including but not limited to Section 2 of
Schedule A thereto, and Employer agrees that the Administrator
shall not exercise negative discretion to alter such
post-termination vesting terms. Any other stock options
and/or RSAs granted to Employee under the 2003 Plan or any other
stock incentive plan maintained by Employer (each of the 2003 Plan
and any other such stock incentive plans, a "Stock
Plan") shall continue in accordance with the terms of the
respective Stock Plan and award agreement, except that Employer
agrees to accelerate vesting of any such outstanding options and/or
RSAs (but not to extend the option period, with respect to
options), so that such options and/or RSAs shall be vested in full
on or before the Retirement Date. Without limiting the effect
of the foregoing, the following provisions shall apply with respect
to any RSA (the "performance-based RSA") that may be subject to
that certain "Restricted Stock Award Agreement (Performance-Based
and Service-Based Award)" authorized under the 2003 Plan: (i) the
performance-based RSA shall be granted to the extent that the
applicable performance objectives stated in the agreement were met
and the other terms and conditions of the agreement are satisfied;
(ii) Employer agrees to grant such performance-based RSA effective
March 30,2008; and (iii) the performance-based RSA will remain
subject to the terms of the agreement, except that the
performance-based RSA will vest with respect to 100% (rather than
50%) of the shares subject to the RSA as of the grant date.
Employer and Employee hereby agree that any stock option agreement
and/or RSA agreement entered into under any Stock Plan shall hereby
be amended if and solely to the extent deemed necessary to comply
with the provisions of Section 2(d) herein.
3. Consulting
and Assistance in Litigation . Commencing on the
Retirement Date and continuing for a period of two years
thereafter, Employee will make himself reasonably available to
perform services of an advisory or consulting nature on behalf of
Employer on terms that are mutually agreeable to the parties with
respect to each individual assignment, i
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