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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
RF MICRO DEVICES, INC.
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(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
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RF MICRO DEVICES, INC.
7628 THORNDIKE ROAD
GREENSBORO, NORTH CAROLINA 27409-9421
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 24, 2001
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS:
We hereby give notice that the Annual Meeting of Shareholders of RF
Micro Devices, Inc. (the Company) will be held on Tuesday, July 24, 2001 at
10:00 a.m. local time, at The Greensboro-High Point Marriott, One Marriott
Drive, Greensboro, North Carolina, for the following purposes:
(1) To elect five directors for one-year terms and until their
successors are duly elected and qualified; and
(2) To transact such other business as may properly come before the
meeting.
Under North Carolina law, only shareholders of record at the close of
business on the record date, which is June 7, 2001, are entitled to notice of
and to vote at the annual meeting or any adjournment. It is important that your
shares of common stock be represented at this meeting so that the presence of a
quorum is assured.
A copy of our 2001 Annual Report containing our financial statements
for the fiscal year ended March 31, 2001 is enclosed.
By Order of the Board of Directors
/s/ Powell T. Seymour
Powell T. Seymour
Secretary
June 19, 2001
Even if you plan to attend the meeting in person, please date and
execute the enclosed proxy and mail it promptly. If you attend the meeting, you
may revoke your proxy and vote your shares in person. A postage-paid,
return-addressed envelope is enclosed.
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RF MICRO DEVICES, INC.
7628 THORNDIKE ROAD
GREENSBORO, NORTH CAROLINA 27409-9421
PROXY STATEMENT
SOLICITATION OF PROXIES
The enclosed proxy, for use only at the Annual Meeting of Shareholders
to be held July 24, 2001, at 10:00 a.m. local time at The Greensboro-High Point
Marriott, One Marriott Drive, Greensboro, North Carolina, and any adjournment
thereof, is solicited on behalf of the Board of Directors of RF Micro Devices,
Inc. (the Company). The approximate date that we are first sending these proxy
materials to shareholders is June 19, 2001. This solicitation is being made by
mail and may also be made in person or by fax, telephone or Internet by our
officers or employees. We will pay all expenses incurred in this solicitation.
We will request banks, brokerage houses and other institutions, nominees and
fiduciaries to forward the soliciting material to beneficial owners and to
obtain authorization for the execution of proxies. We will, upon request,
reimburse these parties for their reasonable expenses in forwarding proxy
materials to beneficial owners.
The accompanying proxy is for use at the meeting if a shareholder
either will be unable to attend in person or will attend but wishes to vote by
proxy. The proxy may be revoked by the shareholder at any time before it is
exercised by filing with our corporate secretary an instrument revoking it,
filing a duly executed proxy bearing a later date or by attending the meeting
and electing to vote in person. All shares of the Company's common stock
represented by valid proxies received pursuant to this solicitation, and not
revoked before they are exercised, will be voted in the manner specified
therein. If no specification is made, the proxies will be voted in favor of
electing the five nominees for directors named herein (or their substitutes) for
one-year terms expiring in 2002.
The presence in person or by proxy of a majority of the shares of
common stock outstanding on the record date constitutes a quorum for purposes of
conducting business at the meeting. Once a share is represented for any purpose
at a meeting, it is deemed present for quorum purposes for the remainder of the
meeting and for any adjourned meeting. Abstentions and shares that are withheld
as to voting with respect to one or more of the nominees for director will be
counted in determining the existence of a quorum, but shares held by a broker,
as nominee, and not voted on any matter will not be counted for such purpose.
In accordance with the laws of North Carolina, the persons receiving a
plurality of the votes cast by the shares entitled to vote will be elected as
directors. Abstentions, shares which are withheld as to voting with respect to
nominees for director and shares held of record by a broker, as nominee, that
are not voted with respect to this proposal will not be counted as a vote in
favor of or against the proposal and, therefore, will have no effect on the
proposal to elect the nominees for directors.
VOTING SECURITIES OUTSTANDING
In accordance with North Carolina law, June 7, 2001 has been fixed as
the record date for determining holders of common stock entitled to notice of
and to vote at the meeting. Each share of our common stock issued and
outstanding on June 7, 2001 is entitled to one vote on all proposals at the
meeting, except that shares we hold in a fiduciary capacity may be voted only in
accordance with the instruments creating the fiduciary capacity. Holders of
shares of common stock vote together as a voting group on all proposals. At the
close of business on June 7, 2001, there were 164,766,091 shares of our common
stock outstanding and entitled to vote.
Where appropriate, we have adjusted references in this proxy statement
to prices and share numbers of our common stock to reflect three 2-for-1 stock
splits, each effected in the form of a 100% share dividend. The first was
payable on March 31, 1999 to record holders of common stock on March 17, 1999;
the second was payable on August 18, 1999 to record holders on August 2, 1999;
and the third was payable on August 25, 2000 to record holders on August 8,
2000.
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NOMINEES FOR ELECTION OF DIRECTORS
Under our bylaws, the Board of Directors consists of seven to nine
members, as determined by the Board or the shareholders from time to time. The
Board has determined that the number of directors within the range shall be
seven, as to which there are currently two vacancies caused by the resignations
of two of our directors, one in 1999 and one in 2000. Currently, replacements
have not been found to fill these vacancies. Assuming the election of the
remaining nominees for director named in the proxy statement, there will be two
vacancies that the Board intends to fill, pursuant to our bylaws, following
identification of qualified nominees. Proxies may not be voted for a greater
number of persons than the number of nominees named. Directors are elected
annually to serve for one-year terms and until their successors are duly elected
and qualified. There are no family relationships among any of our directors or
officers. All nominees presently serve as directors. We intend that the
proxyholders named in the accompanying form of proxy will vote to elect the five
nominees listed below as directors, unless the authority to vote is withheld.
Although we expect that each of the nominees will be available for election, if
any vacancy in the slate of nominees occurs, we expect that shares of common
stock represented by proxies will be voted for the election of a substitute
nominee or nominees recommended by management or to reduce the number of
directors to be elected at the meeting by the number of vacancies in the slate
of nominees.
The names of the nominees for election to the Board, their principal
occupations and certain other information follows:
DAVID A. NORBURY AGE 50 DIRECTOR SINCE 1992
Mr. Norbury has been President and Chief Executive Officer and a
Director of the Company since September 1992. Mr. Norbury served as President
and Chief Executive Officer of Polylythics, Inc., a developer of semiconductor
technology based in Santa Clara, California, from August 1989 to March 1991. He
is also a Director of Telaxis Communications Corporation, a publicly traded
manufacturer of broadband wireless equipment for network access applications.
WILLIAM J. PRATT AGE 58 DIRECTOR SINCE 1991
Mr. Pratt, a founder of the Company, served as President from February
1991 to September 1992 and was named Chairman and Chief Technical Officer in
September 1992. He has also been a Director of the Company since its inception.
Prior to such time, Mr. Pratt was employed for 13 years with Analog Devices,
Inc., an integrated circuit manufacturer, as Engineering Manager and General
Manager.
DR. ALBERT E. PALADINO AGE 68 DIRECTOR SINCE 1992
Dr. Paladino is Chairman of Telaxis Communications Corporation. Dr.
Paladino is also a member of the Board of Directors of TranSwitch Corporation, a
publicly traded developer of highly integrated digital and mixed signal
semiconductor solutions for the telecommunications and data communications
markets, and Helioss Corporation, a developer of high capacity millimeter wave
communications equipment. He was a general partner of Advanced Technology
Ventures, a venture capital firm, from 1981 through 1998. Prior to joining
Advanced Technology Ventures, he held senior positions with Raytheon Company,
GTE Laboratories, the National Institute of Standards and Technology and the
Congressional Office of Technology Assessment.
ERIK H. VAN DER KAAY AGE 61 DIRECTOR SINCE 1996
Mr. van der Kaay has been Chairman of the Board of Datum, Inc., a
publicly traded synchronization products company based in Irvine, California,
since January 2000 and President and Chief Executive Officer since April 1998.
He is also a Director of Datum, Inc. and TranSwitch Corporation. Mr. van der
Kaay was employed with Allen Telecom, a telecommunications company based in
Beachwood, Ohio, from June 1990 to March 1998, and last served as its Executive
Vice President.
WALTER H. WILKINSON, JR. AGE 55 DIRECTOR SINCE 1992
Mr. Wilkinson is the founder and a general partner of Kitty Hawk
Capital, Inc., a venture capital firm based in Charlotte, North Carolina,
established in 1980.
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COMMITTEES OF THE BOARD OF DIRECTORS
Our Board of Directors has two standing committees, a Compensation
Committee and an Audit Committee. The Compensation Committee, upon delegation of
authority by the Board of Directors, has the authority to (a) establish and
implement the cash and non-cash compensation of each officer, salaried employee
and agent of or consultant to the Company (subject to any employment or other
agreement such officer, employee, agent or consultant may have) on an annual,
semi-annual or other periodic basis; and (b) implement and monitor any personnel
policy, collective bargaining agreement, health or dental insurance plan,
retirement plan, profit sharing plan, deferred compensation plan, stock option
or other stock-based benefit plan, bonus plan, incentive plans or any other
employee benefit plan or agreement that we provide to our employees, officers,
directors or consultants. The members of the Compensation Committee are Messrs.
van der Kaay, Paladino and Wilkinson, none of whom is an employee of the
Company.
The Audit Committee is appointed by the Board to assist the Board in
monitoring the integrity of our financial statements, our compliance with legal
and regulatory requirements and the independence and performance of our external
auditors. The members of the Audit Committee are Messrs. van der Kaay, Paladino
and Wilkinson, none of whom is an employee of the Company. See "Report of the
Audit Committee" section.
All directors attended at least 75% of the Board meetings and assigned
committee meetings during the fiscal year ended March 31, 2001. The Board held
five meetings during the year, the Compensation Committee held eleven meetings,
and the Audit Committee held four meetings.
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company is eligible to
receive $12,000 per year for service as a member of the Board, plus $1,000 per
Board meeting attended, and $2,000 per year for service on each committee of the
Board on which he or she serves. In addition, all directors are reimbursed for
expenses incurred in their capacity as directors. Other than the reimbursement
of expenses, directors who are employees of the Company do not receive
compensation for Board service.
Under our Non-Employee Directors' Option Plan, as amended, and restated
effective March 27, 2001 to reflect the effect of stock splits, each
non-employee director who is first elected or appointed to the Board after that
date is eligible to receive an option to purchase 20,000 shares of our common
stock at the market price of the stock at the time of grant. Commencing with the
2001 annual meeting, each participating non-employee director who is reelected
will receive an annual option grant for 20,000 shares of common stock at the
market price at the time of grant. Awards granted under the plan generally vest
in three installments over two years. Prior to the 2001 annual meeting of
shareholders, each participating non-employee director received an annual option
grant for 10,000 shares of common stock at the market price at the time of
grant.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the
beneficial ownership of common stock as of June 7, 2001 by (a) each person known
by us to own beneficially five percent or more of our outstanding shares of
common stock, (b) each director and nominee for director, (c) the Named
Executives (as defined in "Summary Compensation Table" section), and (d) all
current directors and executive officers as a group. Beneficial ownership is
determined in accordance with the rules of the Securities and Exchange
Commission (the SEC). In computing the number of shares beneficially owned by a
person and the percentage ownership of that person, shares of common stock
subject to options or warrants held by that person that are currently
exercisable or that are or may become exercisable within 60 days of June 7, 2001
are deemed outstanding. These shares, however, are not deemed outstanding for
purposes of computing the percentage ownership of any other person. Except as
indicated in the footnotes to this table and under applicable community property
laws, each shareholder named in the table has sole voting and dispositive power
with respect to the shares set forth opposite the shareholder's name.
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Beneficial Ownership
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Name of Number of Percent
Beneficial Owner Shares of Class
---------------- ------ --------
TRW Inc. (1) .................................. 23,501,896 14.26%
William J. Pratt (2) .......................... 1,723,812 1.04%
David A. Norbury (3) .......................... 882,834 *
Jerry D. Neal (4) ............................. 630,678 *
Walter H. Wilkinson, Jr. (5) .................. 352,592 *
Arthur E. Geissberger (6) ..................... 262,498 *
Dr. Albert E. Paladino (7) .................... 193,335 *
Erik H. van der Kaay (8) ...................... 188,000 *
Robert A. Bruggeworth (9) ..................... 4,652 *
Directors and executive officers as a group (12
persons) (10).................................. 5,338,541 3.20%
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* Indicates less than one percent
(1) TRW's address is 1900 Richmond Road, Cleveland, Ohio 44124. Includes
4,000,000 shares as to which TRW has sole voting power and shared
dispositive power.
(2) Includes (a) 438,419 shares of common stock issuable upon the exercise
of stock options, (b) 80,000 shares held by the William John Pratt 2001
Grantor Retained Annuity Trust, as to which Mr. Pratt shares voting and
dispositive power and (c) 52,000 shares held by Mr. Pratt's spouse.
(3) Includes 268,608 shares of common stock issuable upon the exercise of
stock options.
(4) Includes 472,996 shares of common stock issuable upon the exercise of
stock options.
(5) Includes 200,000 shares of common stock issuable upon the exercise of
stock options.
(6) Includes 255,986 shares of common stock issuable upon the exercise of
stock options.
(7) Includes 53,335 shares of common stock issuable upon the exercise of
stock options.
(8) Includes 140,000 shares of common stock issuable upon the exercise of
stock options.
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(9) Includes 4,652 shares of common stock issuable upon the exercise of
stock options.
(10) Includes 2,148,920 shares of common stock issuable upon the exercise of
stock options.
EXECUTIVE OFFICERS
Our current executive officers are as follows:
Name Age Position
---- --- --------
David A. Norbury.......... 50 President, Chief Executive Officer and
Director
William J. Pratt.......... 58 Chairman of the Board, Chief Technical
Officer and Director
Powell T. Seymour......... 58 Vice President of Operations and Secretary
Jerry D. Neal............. 56 Executive Vice President of Sales, Marketing
and Strategic Development
William A. Priddy, Jr..... 40 Chief Financial Officer and Vice President of
Administration
Arthur E. Geissberger..... 48 Vice President of Wafer Fabrication Operations
Gary J. Grant............. 45 Vice President of Quality Assurance
Robert A. Bruggeworth..... 40 Vice President of Wireless Products
J. Forrest Moore.......... 53 Chief Information Officer and Vice President
of Information Technology
Set forth below is certain information with respect to our executive
officers. Officers are appointed to serve at the discretion of the Board of
Directors. There are no family relationships between any of our executive
officers or directors. Information regarding Messrs. Norbury and Pratt is
included in the director profiles above.
POWELL T. SEYMOUR, a founder of the Company, has been Vice President of
Operations and Secretary since the Company's inception in February 1991. Prior
to such time, Mr. Seymour was employed for 11 years with Analog Devices, Inc. as
Manufacturing Engineer and Manufacturing Engineer Manager. Mr. Seymour served as
a Director from February 1992 to July 1993.
JERRY D. NEAL, a founder of the Company, served as Vice President of
Sales and Marketing from May 1991 to January 2000, when he became Executive Vice
President of Sales, Marketing and Strategic Development. Prior to joining the
Company, Mr. Neal was employed for 10 years with Analog Devices, Inc. as
Marketing Engineer, Marketing Manager and Business Development Manager. Mr. Neal
served as a Director from February 1992 to July 1993.
WILLIAM A. PRIDDY, JR. became Chief Financial Officer and Vice
President of Administration in July 1997. He was Controller from December 1991
to December 1993, Treasurer from December 1993 to May 1999, and Vice President
of Finance from December 1994 to July 1997. Prior to joining the Company, Mr.
Priddy was employed for 5 years with Analog Devices, Inc. as Financial Analyst,
Marketing Analyst and Marketing Services Manager.
ARTHUR E. GEISSBERGER has been Vice President of Wafer Fabrication
Operations since July 1996. From February 1991 to July 1996, Dr. Geissberger was
employed with Alpha Industries, Inc., a manufacturer of
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microwave and millimeter-wave frequency components and subsystems based in
Methuen, Massachusetts, as GaAs Wafer Fabrication Manager and Manager of Foundry
Operations.
GARY J. GRANT has served as Vice President of Quality Assurance since
November 1998. From April 1995 to November 1998, Mr. Grant was employed with ST
Microelectronics, Inc., a broad-ranged manufacturer of integrated circuits, as
Director of Quality and Facilities. From July 1980 to April 1994, Mr. Grant was
employed with Texas Instruments Inc. as Fab Process Engineer, Product
Engineering Manager and Total Quality Manager.
ROBERT A. BRUGGEWORTH has been Vice President of Wireless Products
since September 1999. Mr. Bruggeworth was employed at Tyco Electronics/AMP Inc.,
a supplier of electrical and electronic connection devices, from July 1983 to
June 1999. He held a number of manufacturing and engineering management
positions from July 1983 to July of 1995. From July 1995 to June 1999, Mr.
Bruggeworth served first as Vice President of Asia Pacific Operations and then
as Vice President of Global Computer and Consumer Electronics based in Hong
Kong, China. Mr. Bruggeworth is a member of the Board of Directors of LightPath
Technologies, Inc. a publicly traded, manufacturer of families of high
performance fiber-optic components for the telecommunications industry.
J. FORREST MOORE became Chief Information Officer and Vice President of
Information Technology in June 2000. He was the Director of Information
Technology from February 1997 to June 2000. Mr. Moore was employed with IBM as
Project Manager from July 1996 to February 1997.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE
The objectives of the Compensation Committee are to enhance the
Company's ability to recruit and retain qualified management, to motivate
executives to achieve established performance goals and to ensure an element of
congruity between the financial interests of the Company's management and its
shareholders.
The Compensation Committee considers the following factors in setting
the compensation of the Chief Executive Officer and the other executive officers
of the Company:
- The overall performance of the Company during the fiscal year in
question;
- Individual performance appraisals of the executive officers and
their contributions toward the Company's performance goals and other
objectives as established by the Board of Directors and the
Compensation Committee;
- The compensation packages for executives at other publicly held
U.S. manufacturers of integrated circuits with similar ranks and levels
of responsibility; and
- The overall compensation level of all employees of the Company.
Compensation arrangements adopted by the Compensation Committee include
up to four components: (a) a base salary; (b) grant of equity incentives in the
form of stock options, restricted stock and other stock-based awards; (c) a
discretionary cash bonus program pursuant to which bonuses may be awarded to
executive officers from time to time in amounts based both on objective criteria
established by the Compensation Committee, such as attainment of revenue, profit
and gross margin goals, and on the Compensation Committee's subjective
evaluation of such executive officers' contributions to the Company; and (d)
other compensation and employee benefits generally available to all employees of
the Company, such as health insurance and participation in the Company's 401(k)
plan. Also during fiscal 2001, the Company entered into change in control
agreements with certain senior officers of the Company, including each of the
Named Executives. See "Key Employee Retention" section.
The Chief Executive Officer's salary, bonus and equity incentive awards
are established by the Compensation Committee. Recommendations regarding the
base salary, bonuses and stock option or other awards of the Company's executive
officers, other than Mr. Norbury, are made to the Compensation Committee by Mr.
Norbury and are subject to its approval. The amount of bonuses and stock option
or other awards, if any, for which an executive officer, including the Chief
Executive Officer, may be eligible to receive are based on the attainment of
specified corporate performance factors. The relevant corporate performance
factors for the last fiscal year included
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revenues, gross margin percentages, earnings per share, net bookings and module
production. The objective criteria for payment of cash bonuses during fiscal
2001 were not met, and no bonuses were awarded.
During fiscal 2001, Mr. Norbury earned a base salary of $297,115, which
represents a 23% increase over his base salary during the preceding fiscal year.
At this level, Mr. Norbury's base salary is approximately 5.7 times the average
Company employee's salary. Mr. Norbury was awarded stock options to purchase
93,040 shares of common stock at an exercise price of $49.75 per share on May 3,
2000 and 22,500 shares of restricted stock on October 19, 2000. These options
and shares of restricted stock vest over a period of five years, subject to Mr.
Norbury's continued employment with the Company. The Compensation Committee
feels that the adjustment in Mr. Norbury's base salary for fiscal 2001 was
justified by the continued positive results then being achieved by the
Company--particularly its steady growth in revenues and profitability--and by
other significant developments then occurring, including the rapid progress in
the ramping up of production from the Company's first wafer fabrication facility
and the completion of a second facility. The Compensation Committee believes,
based on its review of publicly available information concerning the Company's
competitors, that Mr. Norbury's compensation is well within the range of
compensation provided to executives of similar rank and responsibility. The
Committee believes that competition for qualified executives in the integrated
circuit industry is extremely strong, and that to attract and retain such
persons the Company must maintain an overall compensation package similar to
those offered by its peer companies.
The Compensation Committee believes that substantial equity ownership
encourages management to take action favorable to shareholders of the Company.
Accordingly, equity-based compensation makes up a significant portion of the
overall compensation of the Named Executives and other executive officers.
During fiscal 2001, the Company granted equity-based awards in the form of stock
option and restricted stock awards to approximately 1,100 employees, including
the Named Executives. The Company also encourages its employees to commit a
portion of their base salary to the purchase of the Company's common stock
through the Employee Stock Purchase Plan.
In general, compensation in excess of $1.0 million to any of the Named
Executives may be subject to limitations on deductibility by the Company under
Section 162(m) of the Internal Revenue Code of 1986, as amended. The limits on
deduction do not apply to performance-based compensation that satisfies certain
requirements. The Compensation Committee has not adopted any policies with
respect to Section 162(m), although the 1999 Stock Incentive Plan, which was
adopted by shareholders at the 1999 annual meeting, is structured to comply with
Section 162(m) to the extent practicable.
This report has been prepared by members of the Compensation Committee.
Members of this committee are:
Walter H. Wilkinson, Jr. (Chairman)
Erik H. van der Kaay
Dr. Albert E. Paladino
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SUMMARY COMPENSATION TABLE
The following table presents information relating to total compensation
during fiscal years 2001, 2000 and 1999, of the Chief Executive Officer and our
four next most highly compensated executive officers (the Named Executives).
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ----------------------
RESTRICTED SECURITIES ALL OTHER
NAME AND YEAR STOCK UNDERLYING COMPENSATION
PRINCIPAL POSITIONS (1) SALARY ($) BONUS ($)(2) AWARDS ($)(3) OPTIONS (#) ($)(4)
------------------- --- ---------- ------------ ------------- -------------- -----------
David A. Norbury 2001 297,115 0 320,625 93,040 5,949
President and Chief 2000 241,923 250,000 603,394 100,000 5,190
Executive Officer 1999 211,923 220,000 0 450,000 5,190
William J. Pratt 2001 258,674 0 213,750 83,736 0
Chairman and Chief 2000 213,269 220,000 0 90,000 0
Technical Officer 1999 188,403 195,000 0 405,000 0
Jerry D. Neal 2001 246,634 0 249,375 74,432 4,997
Executive Vice 2000 196,038 218,000 521,670 80,000 4,568
President of Sales, 1999 168,592 175,000 0 372,000 4,452
Marketing and Strategic
Development
Arthur E. Geissberger 2001 227,015 0 320,625 74,432 4,959
Vice President of Wafer 2000 191,808 198,000 441,528 80,000 4,446
Fabrication Operations 1999 168,370 175,000 0 422,000 4,460
Robert A. Bruggeworth(5) 2001 219,808 0 427,500 73,260 5,495
Vice President of 2000 95,000 98,800 0 130,000 1,096
Wireless Products 1999 0 0 0 0 0
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(1) The Company uses a 52-week or 53-week fiscal year ending on the
Saturday closest to March 31 in each year. Each of the 1999 and 2000
fiscal years was a 52-week year and the 2001 fiscal year was a 53-week
year. For purposes of this proxy statement, each fiscal year is
described as ending on March 31.
(2) The Compensation Committee has implemented a discretionary bonus
program pursuant to which bonuses may be awarded to our executive
officers from time to time in amounts reflecting the Compensation
Committee's evaluation of the executive officers' contributions. See
"Report of the Compensation Committee" section.
(3) The value shown is the number of restricted shares times the closing
market price of the common stock on the day of grant. The restricted
shares generally vest over a period of five years. At fiscal year-end,
the total number and value (based on the closing market price of the
common stock on the last trading day of the fiscal year) of restricted
shares held by the Named Executives was: Mr. Norbury, 46,533 shares
worth $543,878; Mr. Pratt, 15,000 shares worth $175,320; Mr. Neal,
38,278 shares worth $447,393; Dr. Geissberger, 40,086 shares worth
$468,525; and Mr. Bruggeworth, 30,000 shares worth $350,640. The values
given do not reflect the fact that the shares are restricted. Any
dividends paid on the common stock would not be paid on the restricted
shares.
(4) Reflects amounts contributed by the Company during the fiscal year to
the accounts of the Named Executives under the Company's 401(k) plan.
(5) Mr. Bruggeworth became an employee of the Company on September 20,
1999.
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Stock Options
The following table provides information concerning options for the
common stock exercised by each of the Named Executives during fiscal year 2001,
and the value of options held by each at the end of the fiscal year.
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES VALUED AT FISCAL YEAR-END( #) AT FISCAL YEAR-END ($)(2)
ACQUIRED ON REALIZED ---------------------------- -----------------------------
NAME EXERCISE (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------ ----------- ------------- ----------- -------------
David A. Norbury 0 0 609,820 503,040 6,026,033 3,475,985
William J. Pratt 343,552 7,162,722 494,672 460,736 5,257,538 3,215,390
Jerry D. Neal 266,242 11,588,156 431,710 393,632 4,207,931 2,678,671
Arthur E. Geissberger 88,000 3,494,200 220,400 447,632 1,997,241 3,267,179
Robert A. Bruggeworth 0 0 26,000 177,260 0 0
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(1) Value represents the difference between the option price and the market
value of the common stock on the date of exercise.
(2) Value represents the difference between the option price and the market
value of the common stock at fiscal year-end.
The following table sets forth for each of the Named Executives certain
information concerning stock options granted during fiscal year 2001.
Option Grants in Last Fiscal Year
INDIVIDUAL GRANTS
--------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM (1)
OPTIONS EMPLOYEES OR BASE -------------------------------
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#)(2) YEAR ($/SH) DATE 5% ($) 10% ($)
- ---- ------ ---- ----- ------ --------- ---------
David A. Norbury 93,040 1.99 49.75 5/3/10 2,910,990 7,377,019
William J. Pratt 83,736 1.79 49.75 5/3/10 2,619,891 6,639,318
Jerry D. Neal 74,432 1.59 49.75 5/3/10 2,328,792 5,901,616
Arthur E. Geissberger 74,432 1.59 49.75 5/3/10 2,328,792 5,901,616
Robert A. Bruggeworth 50,000 1.07 14.25 10/19/10 677,191 1,500,351
23,260 0.50 49.75 5/3/10 727,747 1,844,255
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- ---------------
(1) The potential realizable value is calculated based on the term of the
option at its time of grant (10 years) and is calculated by assuming
that the stock price on the date of grant as determined by the Board of
Directors appreciates at the indicated annual rate compounded annually
for the entire term of the option and that the option is exercised and
sold on the last day of its term for the appreciated price. The 5% and
10% assumed rates of appreciation are derived from the rules of the SEC
and do not represent our estimate or projection of the future common
stock price.
(2) These options have an exercise price equal to the fair market value of
the common stock at the time of grant and vest and become exercisable
in five equal installments on the first five anniversaries of the date
of grant.
EMPLOYEE BENEFIT PLANS
1999 Stock Incentive Plan. The 1999 Stock Incentive Plan, which the
Company's shareholders approved at the 1999 annual meeting of shareholders,
provides for the issuance of a maximum of 16,000,000 shares of common stock (as
adjusted to reflect stock splits) pursuant to awards granted under the plan.
Awards that may be granted under the plan include incentive stock options and
nonqualified stock options, stock appreciation rights, and restricted stock
awards and restricted units. The number of shares reserved for issuance under
the plan and the terms of awards may be adjusted upon certain events affecting
the Company's capitalization. No awards may be granted under the plan after June
30, 2009.
The plan is administered by the Compensation Committee upon delegation
from the Board of Directors. Under the terms of the plan, the committee has full
and final authority to take any action with respect to the plan, including
selection of individuals to be granted awards, the types of awards and the
number of shares of common stock subject to an award, and determination of the
terms, conditions, restrictions and limitations of each award.
1997 Key Employees' Stock Option Plan. Our 1997 Key Employees' Stock
Option Plan provides for the grant of options to purchase common stock to key
employees and independent contractors in our service. This plan permits the
granting of both incentive options and nonqualified options. The aggregate
number of shares of common stock that may be issued pursuant to options granted
under the plan may not exceed 10,400,000 shares (as adjusted to reflect stock
splits), subject to adjustment upon certain events affecting our capitalization.
This plan is similarly administered by the Compensation Committee.
As of March 31, 2001, we had granted options to employees, including
the Named Executives, for 26,637,751 shares of common stock under these two
plans and a predecessor plan, of which options for 8,557,482 shares have been
exercised and options for 806,613 shares have been forfeited. The exercise
prices for outstanding options granted under the plans range from $.0344 to
$87.50 per share, with a weighted average of $14.15 per share. The Company also
has granted a total of 957,628 shares of restricted stock under the 1999 plan.
Employee Stock Purchase Plan. Our Employee Stock Purchase Plan is
intended to qualify as an "employee stock purchase plan" under Section 423 of
the Code. This plan is intended to encourage stock ownership through means of
payroll deductions. All of our regular full-time employees (including officers)
and all other employees (except for certain part-time and seasonal employees)
are eligible to participate after being employed for three months. Directors who
are not employees are not eligible to participate. An aggregate of 4,000,000
shares of common stock (as adjusted to reflect stock splits) has been reserved
for offering under the stock purchase plan, subject to anti-dilution adjustments
in the event of certain changes in our capital structure.
We make no cash contributions to the stock purchase plan, but bear the
expenses of its administration. The plan is administered by the Compensation
Committee, which has authority to establish the number and duration of the
purchase periods during the term of the plan, and to interpret the terms of the
plan.
Retirement Plan. Each employee is eligible to participate in our
qualified 401(k) plan after three months of service. An employee may invest a
maximum of 15% of pretax earnings in the plan. Employer contributions to the
plan are made at the discretion of management and the Board of Directors. An
employee is fully vested in the employer contribution portion of the plan after
completion of five continuous years of service. We made contributions to the
plan of approximately $922,000 during the fiscal year ended March 31, 2001.
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KEY EMPLOYEE RETENTION
The Company has entered into change in control agreements with certain
senior officers of the Company, including the Named Executives. The terms and
conditions of the change in control agreements are substantially the same,
except for certain differences in Mr. Norbury's and Mr. Priddy's agreements
which are described below. Each change in control agreement will continue in
effect until the earliest of (a) the end of three years after the effective date
of the agreement if no change in control has occurred, subject to automatic
renewal for additional one-year periods unless the Company gives notice to the
Named Executive that it does not wish to extend the agreement; (b) the
termination of the Named Executive's employment with the Company for any reason
prior to the change in control; or (c) the end of a two-year period following a
change in control and the fulfillment by the Company and the Named Executive of
all obligations under the change in control agreement.
Under the terms of each change in control agreement, if a change in
control of the Company occurs while the Named Executive is an employee of the
Company, and a qualifying termination of his employment with the Company occurs
within the two-year period following the change in control, then the Named
Employee is entitled to certain compensation payments and benefits. A
"qualifying termination" means the Company's termination of the Named
Executive's employment for a reason other than death, disability, retirement or
cause, or the Named Executive's termination of his employment for "good reason"
(which includes a material reduction in duties and responsibilities or salary,
the failure of the Company to continue certain benefits and relocation). A
"change in control" is deemed to have taken place upon the occurrence of certain
events, including the acquisition by a person or entity of 51% or more of the
outstanding common stock of the Company, the merger or consolidation of the
Company with or into another corporation where the Company is not the surviving
corporation, the sale of all or substantially all of the assets of the Company
or a change in a majority of the Board of Directors of the Company within a
12-month period.
The change in control agreements for Mr. Norbury and Mr. Priddy provide
that, upon a qualifying termination after a change in control, the Company will
pay a severance benefit in periodic installments over the two years following
the termination equal to the sum of (a) two times the highest annual rate of
base salary during the 12-month period before termination plus (b) two times the
average annual incentive bonus earned under any incentive bonus plan of the
Company during the last three fiscal years before termination. The change in
control agreements for the other Named Executives provide that, upon a
qualifying termination after a change in control, the Company will pay a
severance benefit in periodic installments over the one-year period following
the termination equal to the sum of (a) one times the highest annual rate of
base salary during the 12-month period before termination plus (b) one times the
average annual incentive bonus earned under any incentive bonus plan of the
Company during the last three fiscal years before termination. All of the change
in control agreements also provide that, in the event of a qualifying
termination after a change in control, the Named Executive will receive a
lump-sum cash amount equal to accrued salary and bonus payments, a pro rata
portion of the annual bonus for the year of termination and any accrued vacation
pay.
In addition, the agreements provide that upon a qualifying termination
after a change in control, all Company stock options, stock appreciation rights
or similar stock-based awards held by the Named Executive will be accelerated
and exercisable in full, and all restrictions on any restricted stock,
performance stock or similar stock-based awards granted by the Company, will be
removed and such awards will be fully vested. The Named Executives will also
receive "gross-up payments" equal to the amount of excise taxes, income taxes,
interest and penalties if payments owed under a change in control agreement are
deemed excess parachute payments for federal income tax purposes. The change in
control agreements also provide that the Company will continue to provide for
one year (or two years for Mr. Norbury and Mr. Priddy) the same level of
medical, dental, vision, accident, disability and life insurance benefits upon
substantially the same terms and conditions as existed prior to termination and
will provide the Named Executive with one additional year (or two additional
years for Mr. Norbury and Mr. Priddy) of service credit under all non-qualified
retirement plans and excess benefits plans in which the Named Executive
participated at termination.
The change in control agreements also provides that the Named
Executives are subject to certain confidentiality, non-solicitation and
non-competition provisions. In the event the Named Executive fails to comply
with any of these provisions, he will not be entitled to receive any payment or
benefits under the agreement.
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PERFORMANCE GRAPH
The graph set forth below compares, for the period beginning
immediately after our initial public offering on June 3, 1997, the "cumulative
total return" to our shareholders as compared with the return of The Nasdaq
Stock Market Index (U.S. Companies) (the Nasdaq Market Index) and the Nasdaq
Electronic Components Index (the Electronic Components Index), our industry
index. The graph was prepared using information provided by the Center for
Research Studies in Securities Prices at the University of Chicago. "Cumulative
total return" has been computed assuming an investment of $100 at the beginning
of the period indicated in our common stock and the stock of the companies
included in the Nasdaq Market Index and the Electronic Components Index, and
assuming the reinvestment of dividends.
(CHART)
CRSP Total Returns Index for: 6/3/97 3/27/98 3/26/99 3/24/00 3/30/01
- --------------------------------------------------------------------------------
RF Micro Devices, Inc. 100.0 94.7 546.9 4186.1 610.6
Nasdaq Stock Market (US Companies) 100.0 132.7 177.4 363.8 134.4
Nasdaq Electronic Components Stocks 100.0 106.5 149.0 471.9 139.0
SIC 3670-3679 US & Foreign
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The stock price performance graph depicted above shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934. The stock price performance depicted in the
graph is not necessarily an indicator of future price performance.
INDEPENDENT AUDITORS
Ernst & Young LLP served as the Company's independent auditors for the
fiscal year ended March 31, 2001. The Company's independent auditors are
selected annually by the Board of Directors upon recommendation of the Audit
Committee. The Board is still in the process of selecting independent auditors
for the fiscal year ending March 31, 2002.
A representative from Ernst & Young is expected to be present at the
meeting with the opportunity to make a statement if he or she desires to do so
and to respond to the appropriate questions.
Audit Fees
Aggregate fees billed the Company during fiscal 2001 by Ernst & Young
for services rendered are set forth in the following table:
Type of Service Amount of Fee
- --------------- -------------
Audit Fees........................................................ $170,291
Financial Information Systems Design and Implementation Fees...... $ 0
Audit Related Services............................................ $153,509
Non-audit Services................................................ $322,065
The Audit Committee has considered whether the provision of the
non-audit services performed by Ernst & Young in fiscal year 2001 is compatible
with maintaining the independence of the auditors. Audit related services
generally include fees for pension audits, accounting consultations and SEC
registration statements. During fiscal year 2001, Ernst & Young did not utilize
any leased personnel in connection with the audit.
REPORT OF THE AUDIT COMMITTEE
The Board of Directors has adopted an Audit Committee charter, a copy
of which is attached to this proxy statement as Appendix A. Under the charter,
the Audit Committee has the authority to (a) review the annual audited financial
statements with management, including major issues regarding accounting and
auditing principles and practices, changes in principles and practices and
judgments made, as well as the adequacy of internal controls; (b) review and
concur in the appointment, replacement, reassignment or dismissal of the person,
if any, responsible for directing our internal auditing; (c) review with
management and the independent auditor our quarterly financial statements prior
to the filing of each Form 10-Q; (d) meet periodically with management to review
our major financial risk exposures and the steps management has taken to monitor
and control such exposures and to determine the adequacy of financial reserves;
(e) recommend to the Board the appointment of the independent auditor, approve
the fees to be paid and evaluate its performance; (f) receive periodic reports
from the independent auditor regarding the auditor's independence consistent
with applicable standards and discuss such reports with the auditor and the full
Board; (g) meet with the independent auditor prior to the audit to review the
planning, staffing and coverage of the audit, including discussions of the
matters required to be discussed by appropriate SEC accounting and auditing
standards; (h) review with the independent auditor any problems or difficulties
the auditor may have encountered and any management letter provided by the
auditor and the Company's response to that letter; (i) review and advise the
Board with respect to the policies and procedures regarding compliance with
applicable laws and regulations; (j) review with our outside counsel legal
matters that may have a material impact on the financial statements, our
compliance policies and any material reports or inquiries received from
regulators or governmental agencies; and (k) meet at least annually with the
chief financial officer and the independent auditor in separate executive
sessions. Each member of the Audit Committee is considered independent under
applicable regulatory standards.
In the performance of its oversight function, the Audit Committee has
performed the duties required by its charter, including meeting and holding
discussions with management and the independent auditors, and has
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reviewed and discussed the consolidated financial statements with management and
the independent auditors. The Audit Committee has also discussed with the
independent auditors the matters required to be discussed by the Statement on
Auditing Standards Number 61, Communication with Audit Committees, as currently
in effect.
The Audit Committee has received the written disclosures and the letter
from the independent auditors required by Independence Standards Board Standard
Number 1, Independence Discussions with Audit Committees, as currently in
effect, and has discussed with the independent auditors that firm's
independence. The Audit Committee has also received confirmations from
management with respect to information technology consulting services relating
to financial information systems design and implementation and has considered
whether the provision of these services and other non-audit services by the
independent auditors to the Company is compatible with maintaining the
independence of the auditors.
Based upon the reports by, and discussions with, management and the
independent auditors and the Audit Committee's review of the representations of
management and the Report of the Independent Auditors, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the year ended March
31, 2001, to be filed with the SEC.
This report has been prepared by members of the Audit Committee.
Members of this committee are:
Walter H. Wilkinson, Jr. (Chairman)
Dr. Albert E. Paladino
Erik H. van der Kaay
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under federal securities laws, our directors, officers and beneficial
owners of more than 10% of the common stock are required to report their
beneficial ownership of common stock and any changes in that ownership to the
SEC. Specific dates for such reporting have been established and we are required
to report in this proxy statement any failure to file by the established dates
during the last fiscal year. In the last fiscal year, to our knowledge, all of
these filing requirements were satisfied by our directors, officers and
principal shareholders, except that Mr. Pratt filed a late report with respect
to the exercise of three stock options in August 2000, and TRW Inc. filed a late
report with respect to the exercise of a warrant in January 2001.
CERTAIN TRANSACTIONS
On June 6, 1996, we initiated a strategic alliance with TRW and entered
into agreements pursuant to which we issued to TRW (a) 826,446 shares of Class C
Preferred Stock in exchange for $5,000,000 in cash (these shares converted on an
eight-for-one basis into common stock upon the closing of our initial public
offering in June 1997); (b) 21,471,440 shares of common stock in exchange for
the license agreement described below; (c) a convertible note in the maximum
principal amount of $10,000,000, which has been converted into 8,888,888 shares
of common stock; and (d) a warrant for the purchase of up to 8,000,000 shares of
common stock at $1.25 per share, which has been exercised. We also entered into
a supply agreement under which we purchased from TRW certain minimum quantities
of GaAs HBT wafers and GaAs epitaxial wafers during the years 1996 to 2000. In
addition, TRW has agreed to refrain from taking certain actions regarding
control of the Company during the five years following our initial public
offering, or through June 2002. Also, TRW has registration rights with respect
to the shares of stock described above.
On November 15, 1999, we expanded our June 1996 license agreement with
TRW to broaden the range of products covered by the arrangement. In
consideration for this expanded license, we granted TRW two additional warrants
for the purchase of shares of our common stock, described below. TRW also agreed
to maintain ownership of at least 15,882,322 shares of RFMD common stock (10% of
the shares then outstanding) until at least May 1, 2001.
License Agreement. Under the June 1996 license agreement, TRW granted
us fully paid up, royalty-free worldwide licenses with respect to certain of
TRW's existing and future GaAs HBT patent rights and MBE process patent rights,
in each case with accompanying know-how and technical information, to design,
develop and manufacture certain of our existing products and any product with an
emitter with a width of one to three microns, in either case provided the
products are for commercial wireless communication applications and operate on
signals having a frequency of less than 10 GHz. The license with respect to the
GaAs HBT patent rights was effective
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immediately, and the MBE patent right license became effective on June 15, 1998,
which was the date that our GaAs HBT wafer fabrication facility became
operational. Both licenses are exclusive as to all persons including TRW, except
that TRW has reserved the right to provide to customers on an ongoing basis
certain specified foundry services.
In this license agreement, TRW also granted us certain non-exclusive
licenses and agreed to provide us with certain technical assistance in
connection with the design, construction and operation of our GaAs HBT wafer
fabrication facility. The license agreement provides that TRW will offer to us,
on the same terms as are offered to third parties, certain non-GaAs HBT process
technologies that it develops in the future for a period of ten years following
June 15, 1998. We have agreed to share with TRW any modifications or
improvements and to grant TRW a non-exclusive, royalty-free license to use such
modifications or improvements outside our field of use.
The November 1999 expansion of the license agreement permits us to use
TRW's GaAs HBT technology also to manufacture products for commercial coaxial
and other non-fiber wire applications.
1999 Warrants. Of the warrants we issued to TRW in November 1999, the
first was for 500,000 shares of common stock at an exercise price of $20.00 per
share. The warrant became exercisable on December 31, 2000 and was exercised in
full on January 3, 2001. The second warrant is for 1,000,000 shares of common
stock at an exercise price of $20.00 per share, is exercisable after December
31, 2000 and expires on December 31, 2001; however, it may not be exercised
unless we achieve certain annualized sales milestones, and it will become null
and void if we fail to achieve these milestones. The value of these warrants has
been estimated to be $10.0 million, which represents the cost of our right to
use TRW's technology for these new applications.
Standstill Agreement. TRW has agreed with us and with the holders of
preferred stock that we issued before our initial public offering that, before
June 6, 2002 (the fifth anniversary of the closing of our initial public
offering), it will not, and will cause its affiliates not to:
- acquire, offer to acquire or agree to acquire, directly or
indirectly, any voting securities or rights or options to acquire any
of our assets or voting securities in excess of the lesser of (a) 40%
of our equity securities or (b) the actual maximum percentage of our
equity securities owned by TRW, calculated on a fully diluted basis;
- make any public announcement with respect to, or submit any
proposal for, any extraordinary transaction involving the Company or
its securities or assets;
- make, or in any way participate in, any solicitation of proxies to
vote, or seek to advise or influence any person or entity with respect
to the voting of, any of our voting securities;
- form, join or in any way participate in a "group" within the
meaning of Section 13 of the Securities Exchange Act of 1934 with
respect to any of our voting securities; or
- solicit or encourage any person to propose a business combination
or similar transaction with, or a change in control of, the Company.
If any party were to make a bona fide offer to purchase all of our
outstanding shares, however, TRW would be entitled during the 30-day period
following the offer to make a counterproposal for all of our outstanding shares
on the same or better terms and conditions as provided in the third-party offer.
PROPOSALS FOR 2002 ANNUAL MEETING
Under SEC regulations, any shareholder desiring to make a proposal to
be acted upon at the 2002 annual meeting of shareholders must present such
proposal to us at our principal office in Greensboro, North Carolina by February
19, 2002 for the proposal to be considered for inclusion in our proxy statement.
In addition to any other applicable requirements, for business to be
properly brought before the annual meeting by a shareholder even if the proposal
is not to be included in our proxy statement, our bylaws provide that the
shareholder must give timely notice in writing to our corporate secretary not
less than 60 nor more than 90 days prior to the date one year from the date of
the immediately preceding annual meeting. As to each matter, the notice
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must contain a written statement of the shareholder's proposal and the reasons
for submitting the proposal and additional specific information if the proposal
relates to director nominations, all as stated in our bylaws. A proxy may confer
discretionary authority to vote on any matter at an annual meeting if we do not
receive proper notice of the matter within the time frame described above.
FINANCIAL INFORMATION
The Company's Annual Report to Shareholders for the fiscal year ended
March 31, 2001 is enclosed. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO ANY
SHAREHOLDER OF RECORD OR BENEFICIAL OWNER OF COMMON STOCK A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31, 2001
(WITHOUT EXHIBITS), INCLUDING FINANCIAL STATEMENTS, FILED WITH THE SEC. Any such
request should be directed to Doug DeLieto, the Company's Director of Investor
Relations, at 7628 Thorndike Road, Greensboro, North Carolina 27409.
OTHER BUSINESS
As of the date of this proxy statement, the Board of Directors knows of
no other matter to come before the annual meeting. However, if any other matter
requiring a vote of the shareholders arises, the persons named in the
accompanying proxy will vote such proxy in accordance with their best judgment.
By Order of the Board of Directors
/s/ William J. Pratt
William J. Pratt
Chairman
Dated: June 19, 2001
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APPENDIX A
RF Micro Devices, Inc. Audit Committee Charter
The Audit Committee is appointed by the Board to assist the Board in monitoring
(1) the integrity of the financial statements of the Company, (2) the compliance
by the Company with legal and regulatory requirements and (3) the independence
and performance of the Company's external auditors.
The members of the Audit Committee shall meet the independence and experience
requirements of the Nasdaq Stock Market, Inc.
The Audit Committee shall have the authority to retain special legal, accounting
or other consultants, as it deems necessary to advise the committee. The Audit
Committee may request any officer or employee of the Company or the Company's
outside counsel or independent auditor to attend a meeting of the committee with
or without the presence of management or to meet with any members of, or
consultants to, the committee.
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval.
2. Review the annual audited financial statements with management,
including major issues regarding accounting and auditing principles and
practices, changes in principles and practices and judgments made, as
well as the adequacy of internal controls.
3. Review and concur in the appointment, replacement, reassignment or
dismissal of the person, if any, responsible for directing the
Company's internal auditing.
4. Review with management and the independent auditor the Company's
quarterly financial statements prior to the filing of each Form 10-Q.
5. Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to monitor
and control such exposures and to determine the adequacy of financial
reserves.
6. Recommend to the Board the appointment of the independent auditor,
approve the fees to be paid and evaluate their performance. The audit
firm is ultimately accountable to the Audit Committee and the Board.
7. Receive periodic reports from the independent auditor regarding the
auditor's independence consistent with applicable standards and discuss
such reports with the auditor and the full Board.
8. Meet with the independent auditor prior to the audit to review the
planning, staffing and coverage of the audit, including discussions of
the matters required to be discussed by appropriate accounting and
auditing standards of the Securities and Exchange Commission (SEC).
9. Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the
auditor and the Company's response to that letter. Such review should
include any restrictions on the scope of activities or access to
required information.
10. Prepare the report required by the rules of the SEC to be included in
the Company's annual proxy statement.
11. Review and advise the Board with respect to the Company's policies and
procedures regarding compliance with applicable laws and regulations.
A-1
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12. Review with the Company's outside counsel legal matters that may have a
material impact on the financial statements, the Company's compliance
policies and any material reports or inquiries received from regulators
or governmental agencies.
13. Meet at least annually with the chief financial officer and the
independent auditor in separate executive sessions.
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct auditing
or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditor. Nor is it
the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor or to
ensure compliance with laws and regulations.
A-2
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- FOLD AND DETACH HERE -
PROXY RF MICRO DEVICES, INC.
JULY 24, 2001 ANNUAL MEETING
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF RF MICRO DEVICES, INC.
The undersigned shareholder of RF Micro Devices, Inc., a North Carolina
corporation (the Company), appoints David A. Norbury and William A. Priddy, Jr.,
or either of them, with full power to act alone, the true and lawful
attorneys-in-fact of the undersigned, with full power of substitution and
revocation, to vote all shares of stock of the Company which the undersigned is
entitled to vote at the annual meeting of shareholders of the Company to be held
at The Greensboro - High Point Marriott, One Marriott Drive, Greensboro, North
Carolina on July 24, 2001 at 10:00 A.M., local time and at any adjournment
thereof, with all powers the undersigned would possess if personally present, as
follows:
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS OF THE UNDERSIGNED SHAREHOLDERS WHEN INSTRUCTIONS ARE GIVEN IN
ACCORDANCE WITH THE PROCEDURES DESCRIBED HEREIN AND THE ACCOMPANYING PROXY
STATEMENT. THIS PROXY, IF DULY EXECUTED AND RETURNED, WILL BE VOTED "FOR" THE
PROPOSALS DESCRIBED HEREIN IF NO INSTRUCTION TO THE CONTRARY IS INDICATED. IF
ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS.
1. Proposal to elect five directors of the Company for one-year term expiring in
2002.
[ ] FOR ALL NOMINEES LISTED [ ] WITHHOLD AUTHORITY TO VOTE
(except as marked to the contrary below) FOR ALL NOMINEES
David A. Norbury, William J. Pratt, Dr. Albert E. Paladino,
Erik H. van der Kaay, Walter H. Wilkinson, Jr.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE FOLLOWING SPACE. IF AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE IS NOT WITHHELD, THIS PROXY WILL BE VOTED IN FAVOR OF SUCH
NOMINEE.)
- --------------------------------------------------------------------------------
2. Any other matter that may be submitted to a vote of shareholders at the
meeting.
22
- FOLD AND DETACH HERE -
THE UNDERSIGNED HEREBY RATIFIES AND CONFIRMS ALL THAT SAID ATTORNEYS-IN-FACT, OR
EITHER OF THEM OR THEIR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY
VIRTUE HEREOF, AND ACKNOWLEDGES RECEIPT OF THE NOTICE OF THE MEETING AND THE
ACCOMPANYING PROXY STATEMENT.
Dated this day of , 2001.
----- --------
----------------------------- (SEAL)
----------------------------- (SEAL)
[INSERT NAME AS IT APPEARS ON
SHAREHOLDER RECORDS.]
PLEASE INSERT DATE OF SIGNING. SIGN
EXACTLY AS NAME APPEARS AT LEFT.
WHERE STOCK IS ISSUED IN TWO OR MORE
NAMES, ALL MUST SIGN. IF SIGNING AS
ATTORNEY, ADMINISTRATOR, EXECUTOR,
TRUSTEE OR GUARDIAN, GIVE FULL TITLE
AS SUCH. A CORPORATION SHOULD SIGN
BY AN AUTHORIZED OFFICER AND AFFIX
SEAL.
(YOU ARE REQUESTED TO COMPLETE, SIGN AND RETURN THIS PROXY PROMPTLY.)