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EXHIBIT 10.5
NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN
OF
RF MICRO DEVICES, INC.
(As Amended and Restated Effective January 26, 1999)
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NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN
OF
RF MICRO DEVICES, INC.
(As Amended and Restated Effective January 26, 1999)
1. Purpose.
The purposes of the Nonemployee Directors' Stock Option Plan of RF
Micro Devices, Inc., as amended and restated effective January 26, 1999 (the
"Plan"), are to compensate nonemployee members of the Board of Directors (the
"Board") of RF Micro Devices, Inc. (the "Corporation") for their service on the
Board, encourage and enable such members to acquire or to increase their
holdings of common stock of the Corporation (the "Common Stock") in order to
promote a closer identification of their interests with those of the Corporation
and its shareholders, thereby further stimulating their efforts to enhance the
efficiency, soundness, profitability, growth and shareholder value of the
Corporation, and allow the Corporation to attract and retain qualified
nonemployee members of the Board. These purposes will be carried out through the
granting of stock options to nonemployee Directors. Such options include options
granted to nonemployee Directors upon consummation of an initial public
offering, and, with respect to nonemployee Directors elected to the Board after
consummation of an initial public offering, upon the initial election or
appointment to the Board (collectively, "Initial Awards"), and options granted
to nonemployee Directors on an annual basis after consummation of an initial
public offering ("Annual Awards"). Initial Awards and Annual Awards are referred
to collectively herein as "Options" and individually as an "Option." Such
Options are not intended to qualify for treatment as incentive stock options
described in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). For the purposes herein, a "nonemployee Director" shall mean a Director
who is not at the time an option is granted an employee of the Corporation or a
related corporation.
2. Administration of the Plan.
(a) The Plan shall be administered by the Board of Directors
of the Corporation, or, upon its delegation, by the Compensation
Committee of the Board (the "Committee"). To the extent deemed
necessary or advisable by the Board, the Committee shall include no
fewer than the minimum number of "non-employee directors," as such term
is defined in Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), as may be required by Rule
16b-3 or any successor rule. For the purposes herein, the Board and,
upon its delegation of administrative authority to the Committee, the
Committee, shall (except for references to the Board in Section 13) be
referred to herein as the "Administrator."
(b) Any action of the Administrator may be taken by a written
instrument signed by all of the members of the Administrator and any
action so taken by written consent shall be as fully effective as if it
had been taken by a majority of the members at a meeting duly held and
called. Subject to the provisions of the Plan, the Administrator shall
have full and final authority, in its discretion, to establish, amend
and rescind rules and regulations for the administration of the Plan;
to construe and interpret the Plan, the rules and regulations, and the
agreements evidencing Options granted under the Plan; and to make all
other determinations deemed necessary or advisable for administering
the Plan. In addition, the Administrator shall have complete authority,
in its discretion, to accelerate the date that any Option shall become
exercisable in whole or in part, even if such Option was not otherwise
exercisable, without any obligation to accelerate any other Option
granted to any person.
3. Effective Date; Term of the Plan.
The effective date of the Plan was June 6, 1997, the date of
consummation of an initial public offering (as provided in Section 6(a)(i)
herein) (the "Public Offering Date"). The Plan was amended and restated
effective January 26, 1999. Options may be granted under the Plan on or after
the effective date, but not after the tenth anniversary of the Public Offering
Date.
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4. Shares of Common Stock Subject to the Plan.
The number of shares of Common Stock that may be issued pursuant to
Options shall not exceed in the aggregate 200,000 shares of authorized but
unissued Common Stock. The Corporation hereby reserves sufficient authorized
shares to provide for the exercise of Options granted under the Plan. Any shares
subject to an Option which, for any reason, expires or is terminated unexercised
as to such shares may again be subject to an Option granted under the Plan. If
there is any change in the shares of Common Stock because of a merger,
consolidation or reorganization involving the Corporation or a related
corporation, or if the Board declares a stock dividend or stock split
distributable in shares of Common Stock, or if there is a change in the capital
structure of the Corporation or a related corporation affecting the Common
Stock, the number of shares of Common Stock reserved for issuance under the Plan
shall be correspondingly adjusted, and the Administrator shall make such
adjustments to Options or to any provisions of the Plan as the Administrator
deems equitable to prevent dilution or enlargement of Options.
5. Eligibility.
An Option may be granted only to an individual who is a nonemployee
Director on the date the Option is granted. An eligible participant in the Plan
is referred to herein as a "nonemployee Director" or a "Director."
6. Grant of Options, etc.
(a) Initial Awards.
(i) Initial Awards Upon Completion of Initial Public
Offering. Each non-employee Director in service at the time of
consummation of an initial public offering of the Common Stock
shall receive an Option for 10,000 shares of Common Stock. The
grant of such Initial Award shall be effective concurrently
with the consummation of such initial public offering. For the
purposes of the Plan, the phrase "consummation of an initial
public offering" shall mean the closing of a firm commitment
underwritten public offering of the Company's Common Stock
pursuant to a registration statement on Form S-1 filed under
the Securities Act of 1933, as amended (the "Securities Act").
(ii) Initial Awards Upon Initial Election or
Appointment to the Board. Each nonemployee Director who is
first elected or appointed to the Board after consummation of
an initial public offering shall receive an Option to purchase
10,000 shares of Common Stock. The date of grant of such an
Initial Award shall be the fifth business day after the date
of the annual meeting of shareholders as to those nonemployee
Directors who are first elected at an annual meeting of
shareholders and the fifth business day after the date of
election or appointment to the Board as to those nonemployee
Directors who are first elected or appointed to the Board
other than at an annual meeting of shareholders.
(b) Annual Awards.
(i) Each nonemployee Director who is re-elected to
the Board by the shareholders of the Company at an annual or
other meeting of the shareholders occurring after consummation
of an initial public offering and before the 1999 Annual
Meeting of Shareholders shall be granted, on an annual basis,
an Option to purchase 5,000 shares of Common Stock. The date
of grant of such an Annual Award shall be the fifth business
day after the date of the annual or other shareholders meeting
at which such Director is re-elected.
(ii) Commencing with the 1999 Annual Meeting of
Shareholders, each nonemployee Director who is re-elected to
the Board by the shareholders of the Company at an annual or
other meeting of the shareholders shall be granted, on an
annual basis, an Option to purchase 10,000 shares
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of the Common Stock. The date of grant of such an Annual Award
shall be the fifth business day after the date of the annual
or other shareholders meeting at which such Director is
re-elected.
7. Option Price.
The price per share of Common Stock at which an Option may be exercised
(the "Option Price") shall be the fair market value per share of the Common
Stock on the date the Option is granted. For this purpose, "fair market value"
shall be determined in accordance with the following provisions: (i) if the
shares of Common Stock are listed for trading on the New York Stock Exchange or
the American Stock Exchange, the fair market value shall be the closing sales
price per share of the shares on the New York Stock Exchange or the American
Stock Exchange (as applicable) on the date immediately preceding the date the
Option is granted, or, if there is no transaction on such date, then on the
trading date nearest preceding the date the Option is granted for which closing
price information is available, and, provided further, if the shares are quoted
on the Nasdaq National Market or the Nasdaq SmallCap Market of the Nasdaq
National Market but are not listed for trading on the New York Stock Exchange or
the American Stock Exchange, the fair market value shall be the closing sales
price per share for such stock (or the closing bid, if no sales were reported)
as quoted on such system on the date immediately preceding the date the Option
is granted for which such information is available; or (ii) if the shares of
Common Stock are not listed or reported in any of the foregoing, then fair
market value shall be determined in good faith in accordance with the applicable
provisions of Section 20.2031-2 of the Federal Estate Tax Regulations, or in any
other manner consistent with the Code and accompanying regulations.
8. Option Period and Limitations on the Right to Exercise Options.
(a) The term of an Option (the "Option Period") shall be ten
years from the date of grant. Initial Awards shall become exercisable
as provided in Section 8(a)(i) below, and Annual Awards shall become
exercisable as provided in Section 8(a)(ii) below. To the extent that
all or part of an Option becomes exercisable but is not exercised, such
Option shall accumulate and be exercisable by the Director in whole or
in part at any time before the expiration of the Option Period. The
total number of shares that may be acquired upon the exercise of an
Initial Award or Annual Award shall be rounded down to the nearest
whole share. No fractional shares shall be issued. Any Option or
portion thereof not exercised before expiration of the Option Period
shall terminate.
(i) Initial Awards. Initial Awards that are granted
upon consummation of an initial public offering shall vest and
become exercisable in full immediately upon the date of grant.
Initial Awards that are granted after consummation of an
initial public offering and prior to January 26, 1999 shall
vest and become exercisable in three equal installments on
each of the first three anniversaries of the date of grant.
Initial Awards that are granted after January 26, 1999 shall
vest and become exercisable in three equal installments on the
date of grant and on each of the first and second
anniversaries of the date of grant.
(ii) Annual Awards. An Annual Award made prior to the
1999 Annual Meeting of Shareholders shall vest and become
exercisable in three equal installments on each of the first
three anniversaries of the date of grant. Commencing with
Annual Awards granted in conjunction with the 1999 Annual
Meeting of Shareholders and for each Annual Award granted
thereafter, such Annual Award shall vest and become
exercisable in three equal installments on the date of grant
and on each of the first and second anniversaries of the date
of grant.
(b) No Option shall be exercised unless the Director is, at
the time of exercise, a nonemployee Director and has been a Director
continuously since the date the Option was granted. Notwithstanding the
foregoing, if a Director's service on the Board terminates for any
reason (including death), that portion of his Option which was
exercisable immediately before such termination may be exercised by the
Director (or, in the event of his death, by such person or persons as
shall have acquired the right to exercise the Option by will
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or the laws of intestate succession) at any time within 180 days
following the date of such termination, and after such 180-day period,
such Options shall terminate.
(c) An Option shall be exercised by giving written notice to
the Administrator or its designee at such time and place as the
Administrator shall direct. Such notice shall specify the number of
shares to be purchased pursuant to an Option and the aggregate purchase
price to be paid therefor, and shall be accompanied by the payment of
such purchase price. Such payment shall be in the form of (i) cash;
(ii) shares of Common Stock owned by the Director at the time of
exercise; (iii) shares of Common Stock withheld upon exercise; (iv)
delivery of written notice of exercise to the Administrator and
delivery to a broker of written notice of exercise and irrevocable
instructions to promptly deliver to the Corporation the amount of sale
or loan proceeds to pay the Option Price; or (v) a combination of such
methods. Shares of Common Stock tendered or withheld in payment upon
the exercise of an Option shall be valued at their fair market value on
the date of exercise, as determined in accordance with Section 7
herein.
(d) A Director or his legal representative, legatees or
distributees shall not be deemed to be the holder of any shares subject
to an Option unless and until certificates for such shares are issued
to him or them under the Plan. A certificate or certificates for shares
of Common Stock acquired upon exercise of an Option shall be issued in
the name of the Director (or his beneficiary) and distributed to the
Director (or his beneficiary) as soon as practicable following receipt
of notice of exercise and payment of the purchase price.
9. Nontransferability of Options.
(a) An Option shall not be transferable other than by will or
the laws of intestate succession, except as (i) may be otherwise
provided in an individual option agreement and (ii) may be permitted by
the Administrator in a manner consistent with the registration
provisions of the Securities Act. Except as may be permitted by the
preceding sentence, an Option shall be exercisable during the
Director's lifetime only by him or by his guardian or legal
representative.
(b) To the extent required by Rule 16b-3, shares of Common
Stock acquired upon exercise of an Option shall not, without the
consent of the Administrator, be disposed of by the Director until the
expiration of six months after the date the Option was granted.
10. Certain Definitions.
For purposes of the Plan, the following terms shall have the meaning
indicated:
(a) "Related corporation" means any parent, subsidiary or
predecessor of the Corporation.
(b) "Parent" or "parent corporation" shall mean any
corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation if, at the time as of which a
determination is being made, each corporation other than the
Corporation owns stock possessing fifty percent or more of the total
combined voting power of all classes of stock in another corporation in
the chain.
(c) "Subsidiary" or "subsidiary corporation" means any
corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation if, at the time as of which
a determination is being made, each corporation other than the last
corporation in the unbroken chain owns stock possessing fifty percent
or more of the total combined voting power of all classes of stock in
another corporation in the chain.
(d) "Predecessor" or "predecessor corporation" means a
corporation which was a party to a transaction described in Section
424(a) of the Code (or which would be so described if a substitution or
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assumption under that section had occurred) with the Corporation, or a
corporation which is a parent or subsidiary of the Corporation, or a
predecessor of any such corporation.
11. Stock Option Agreement.
The grant of any Option under the Plan shall be evidenced by the
execution of an agreement (the "Agreement") between the Corporation and the
Director, a specimen of which is attached to the Plan. Each such Agreement shall
set forth the date of grant of the Option, the Option Price, the Option Period
and any other applicable terms and conditions.
12. Restrictions on Shares.
The Corporation may impose such restrictions on any shares issued
pursuant to the exercise of Options granted hereunder as it may deem advisable,
including without limitation restrictions under the Securities Act and the
requirements of any applicable self-regulatory organization and any blue sky or
securities laws applicable to such shares. Notwithstanding any other Plan
provision to the contrary, the Corporation shall not be obligated to issue,
deliver or transfer shares of Common Stock under the Plan or to take any other
action unless such action is in compliance with applicable laws, rules and
regulations (including but not limited to the requirements of the federal
securities laws). The Corporation may cause a restrictive legend to be placed on
any certificate issued pursuant to the exercise of an Option granted hereunder
in such form as may be prescribed from time to time by applicable laws and
regulations or as may be advised by legal counsel to the Corporation.
13. Amendment or Termination.
The Plan and any Option may be amended or terminated by action of the
Board; provided, that such amendment or termination shall not, without the
consent of a nonemployee Director, adversely affect the rights of such
nonemployee Director with respect to an outstanding Option held by such
nonemployee Director. The term of the Plan shall end on the earlier of: (i) the
effective date of termination of the Plan by the Board or (ii) that date Options
have been granted to purchase all of the aggregate shares which are available
for Options hereunder. Any Options outstanding at the end of the term shall
continue to be outstanding and exercisable for the remainder of the applicable
Option Period.
14. Section 16(b) Compliance.
It is the general intent of the Corporation that transactions under the
Plan shall comply in all respects with Rule 16b-3 under the Exchange Act, and,
if any Plan provision is later found not to be in compliance with Section 16 of
the Exchange Act, the provision shall be deemed null and void, and in all events
the Plan shall be construed in favor of Plan transactions meeting the
requirements of Rule 16b-3 or successor rules applicable to the Plan.
15. Applicable Law.
Except as otherwise provided herein, the Plan shall be construed and
enforced according to the laws of the State of North Carolina.
16. Change of Control.
(a) Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change of Control (as defined in Section
16(c) herein), all Options outstanding as of the date of such Change of
Control shall become fully exercisable, whether or not then otherwise
exercisable.
(b) Notwithstanding the foregoing, in the event of a merger,
share exchange, reorganization or other business combination affecting
the Corporation or a related corporation, the Administrator may, in its
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sole and absolute discretion, determine that any or all Options granted
pursuant to the Plan shall not become exercisable on an accelerated
basis, if the board of directors of the surviving or acquiring
corporation, as the case may be, shall have taken such action,
including but not limited to the assumption of Options granted under
the Plan or the grant of substitute awards (in either case, with
substantially similar terms as Options granted under the Plan), as in
the opinion of the Administrator is equitable or appropriate to protect
the rights and interests of participants under the Plan. For the
purposes herein, if the Committee is acting as the Administrator
authorized to make the determinations provided for in this Section
16(b), the Committee shall be appointed by the Board of Directors,
two-thirds of the members of which shall have been directors of the
Corporation prior to the merger, share exchange, reorganization or
other business combinations affecting the Corporation or a related
corporation.
(c) For the purposes herein, a "Change of Control" shall be
deemed to have occurred on the earliest of the following dates:
(i) The date any entity or person that is not a
shareholder on the effective date of the Plan shall have
become the beneficial owner of, or shall have obtained voting
control over, fifty-one percent (51%) or more of the
outstanding Common Stock of the Corporation;
(ii) The date the shareholders of the Corporation
approve a definitive agreement (A) to merge or consolidate the
Corporation with or into another corporation, in which the
Corporation is not the continuing or surviving corporation or
pursuant to which any shares of Common Stock of the
Corporation would be converted into cash, securities or other
property of another corporation, other than a merger or
consolidation of the Corporation in which holders of Common
Stock immediately prior to the merger or consolidation have
the same proportionate ownership of Common Stock of the
surviving corporation immediately after the merger as
immediately before, or (B) to sell or otherwise dispose of all
or substantially all the assets of the Corporation; or
(iii) The date there shall have been a change in a
majority of the Board of Directors of the Corporation within a
12-month period unless the nomination for election by the
Corporation'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 Exchange Act, other than the
Corporation, a subsidiary of the Corporation or any employee
benefit plan(s) sponsored or maintained by the Corporation or
any subsidiary thereof, and the term "beneficial owner" shall
have the meaning given the term in Rule 13d-3 under the
Exchange Act.
17. No Right to Continued Service.
Nothing in the Plan shall confer upon a Director any right to continue
in the service of the Corporation or a related corporation or to interfere in
any way with the right of the Corporation or related corporation to terminate a
Director's service at any time.
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IN WITNESS WHEREOF, this 1999 Nonemployee Directors' Stock
Option Plan of RF Micro Devices, Inc., as amended and restated effective January
26, 1999, has been executed in behalf of the Corporation effective as of the
26th day of January, 1999.
RF MICRO DEVICES, INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
Attest:
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Secretary
[Corporate Seal]
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