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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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RF MICRO DEVICES, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
7628 THORNDIKE ROAD
NORTH CAROLINA GREENSBORO, NORTH CAROLINA 27409-9421 56-1733461
------------------------------ -------------------------------------- ---------------
(State or other jurisdiction of (Address of principal executive offices) (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
1999 STOCK INCENTIVE PLAN OF
RF MICRO DEVICES, INC.
(8,000,000 SHARES)
CERTAIN OPTION AGREEMENTS
BETWEEN RF MICRO DEVICES, INC.
AND CERTAIN DIRECTORS OF
RF MICRO DEVICES, INC.
(60,000 SHARES)
(Full title of the plans)
------------------------------
David A. Norbury
President and Chief Executive Officer
RF Micro Devices, Inc.
7628 Thorndike Road
Greensboro, North Carolina 27409-9421
(336) 664-1233
------------------------------
(Name, address and telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE(1) PRICE(1) FEE(1)
- ---------- ---------- ------------ --------- ------------
Common Stock,
no par value 8,060,000 shares $5.22-$66.13 $516,511,483.38 $136,359.03
- --------------------------------------------------------------------------------
(1) Pursuant to Rule 457(c) and (h)(1), based on (i) the average of the
high ($67.50) and low ($61.50) sale prices of the Registrant's common
stock on December 15, 1999, as reported on the Nasdaq National Market
(7,878,000 shares); (ii) the average option price ($66.13) for shares
available for issuance upon exercise of outstanding options granted by
the Registrant under its 1999 Stock Incentive Plan (122,000 shares);
and (iii) the average option price ($5.22) for shares available for
issuance upon exercise of outstanding options granted by the Registrant
pursuant to agreements with certain directors of the Registrant (60,000
shares).
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by RF Micro Devices, Inc. (the
"Company") with the Securities and Exchange Commission (the "Commission") are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended March 27, 1999, filed with the Commission on June 25, 1999;
(b) The Company's Quarterly Reports on Form 10-Q for the
quarter ended June 26, 1999, filed with the Commission on August 10,
1999 and for the quarter ended September 25, 1999, filed with the
Commission on November 9, 1999;
(c) The Company's Current Report on Form 8-K filed as of July
23, 1999;
(d) The description of the Company's Common Stock, no par
value, contained in the Company's Registration Statement on Form 8-A,
filed pursuant to Section 12(g) of the Securities Exchange Act of 1934
(the "Exchange Act") with the Commission on May 2, 1997, including any
amendment or report filed for the purpose of updating such description;
and
(e) All other reports filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the period referred to in (a),
above.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the securities offered hereby has been passed
upon by the firm of Womble Carlyle Sandridge & Rice, PLLC, counsel to the
Company. Members of the firm own an aggregate of approximately 4,600 shares of
Common Stock and have options to purchase approximately 22,000 shares of Common
Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 55-8-50 through 55-8-58 of the North Carolina
Business Corporation Act contain specific provisions relating to indemnification
of directors and officers of North Carolina corporations. In general, such
sections provide that (i) a corporation must indemnify a director or officer who
is wholly successful in his defense of a proceeding to which he is a party
because of his status as such, unless limited by the articles of incorporation,
and (ii) a corporation may indemnify a director or officer if he is not wholly
successful in such defense, if it is determined as provided by statute that the
director or officer meets a certain standard of conduct, provided that when a
director or officer is liable to the corporation or is adjudged liable on the
basis that personal benefit was improperly received by him, the corporation may
not indemnify him. A director or officer of a corporation who is a party to a
proceeding may
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also apply to the courts for indemnification, and the court may order
indemnification under certain circumstances set forth in the statute. A
corporation may, in its articles of incorporation or bylaws or by contact or
resolution, provide indemnification in addition to that provided by statute,
subject to certain conditions.
The Company's bylaws provide for the indemnification of any
director or officer of the Company against liabilities and litigation expenses
arising out of his status as such, excluding (i) any liabilities or litigation
expenses relating to activities which were at the time taken known or believed
by such person to be clearly in conflict with the best interest of the Company
and (ii) that portion of any liabilities or litigation expenses with respect to
which such person is entitled to receive payment under any insurance policy.
The Company's articles of incorporation provide for the
elimination of the personal liability of each director of the Company to the
fullest extent permitted by law.
The Company maintains directors' and officers' liability
insurance under which controlling person, directors and officers of the Company
is insured or indemnified against certain liabilities which he may incur in his
capacity as such.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed as a part of this
Registration Statement:
NUMBER DESCRIPTION
- ------ -----------
4.1 Amended and Restated Articles of Incorporation of RF Micro Devices, Inc.,
which are incorporated by reference to Exhibit 3.1 of the Company's
Quarterly Report on Form 10-Q filed on August 10, 1999.
4.2 Bylaws of RF Micro Devices, Inc., which are incorporated by reference
from Exhibit 3.2 filed with the Company's Registration Statement on
Form S-1 (File No. 333-22625).
5 Opinion of Womble Carlyle Sandridge & Rice, PLLC, as to the legality of
the Common Stock being registered.
23.1 Consent of Womble Carlyle Sandridge & Rice, PLLC, which is contained in
its opinion filed as Exhibit 5.
23.2 Consent of Ernst & Young LLP.
24 Power of Attorney (included on the signature page to this Registration
Statement).
99.1 1999 Stock Incentive Plan of RF Micro Devices, Inc.
99.2 Form of Option Agreement between RF Micro Devices, Inc. and certain
Directors of RF Micro Devices, Inc.
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ITEM 9. UNDERTAKINGS.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Company pursuant to Section
13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, RF
Micro Devices, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Greensboro, State of North Carolina, on this
20th day of December, 1999.
RF MICRO DEVICES, INC.
By: /s/ David A. Norbury
-------------------------------------------------
David A. Norbury
President, Chief Executive Officer and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose
signature appears on the signature pages to this Registration Statement hereby
constitutes and appoints David A. Norbury and William A. Priddy, Jr., and each
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the undersigned, and in his or her name,
place and stead, in any and all capacities to sign any and all amendments,
including post-effective amendments, exhibits thereto and other documents in
connection therewith, to this Registration Statement, to make such changes in
the Registration Statement as such attorneys-in-fact deems appropriate, and to
file the same, with all exhibits thereto and other documents in connection
therewith with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents and each of them, full power and authority to do so
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or either of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities indicated on December 20, 1999.
/s/ David A. Norbury /s/ William A. Priddy, Jr.
- ----------------------------------- ----------------------------------------
Name: David A. Norbury Name: William A. Priddy, Jr.
Title: President, Chief Executive Title: Vice President of Finance and
Officer and Director Treasurer (principal financial and
(principal executive officer) accounting officer)
/s/ Dr. Albert E. Paladino /s/ William J. Pratt
- ----------------------------------- ----------------------------------------
Name: Dr. Albert E. Paladino Name: William J. Pratt
Title: Director Title: Director
/s/ Erik H. van der Kaay /s/ Walter H. Wilkinson, Jr.
- ----------------------------------- ----------------------------------------
Name: Erik H. van der Kaay Name: Walter H. Wilkinson, Jr.
Title: Director Title: Director
/s/ Terri D. Zinkiewicz
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Name: Terri D. Zinkiewicz
Title: Director
II - 4
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EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM S-8 OF
RF MICRO DEVICES, INC.
NUMBER DESCRIPTION
- ------ -----------
4.1 Amended and Restated Articles of Incorporation of RF Micro Devices,
Inc., which are incorporated by reference to Exhibit 3.1 filed with
the Company's Quarterly Report on Form 10-Q filed on August 10,
1999.*
4.2 Bylaws of RF Micro Devices, Inc., which are incorporated by
reference to Exhibit 3.2 filed with the Company's Registration
Statement on Form S-1 (File No. 333-22625).*
5 Opinion of Womble Carlyle Sandridge & Rice, PLLC, as to the legality
of the Common Stock being registered.
23.1 Consent of Womble Carlyle Sandridge & Rice, PLLC, which is contained
in its opinion filed as Exhibit 5.
23.2 Consent of Ernst & Young LLP.
24 Power of Attorney (included on the signature page to this
Registration Statement).
99.1 1999 Stock Incentive Plan of RF Micro Devices, Inc.
99.2 Form of Option Agreement between RF Micro Devices, Inc. and certain
Directors of RF Micro Devices, Inc.
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* Incorporated by reference.
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EXHIBIT 5
<PAGE> 2
December 20, 1999
RF Micro Devices, Inc.
7628 Thorndike Road
Greensboro, North Carolina 27409-9421
Re: RF Micro Devices, Inc. 1999 Stock Incentive Plan and Individual
Option Agreements with Certain Directors
Ladies and Gentlemen:
We have served as counsel for RF Micro Devices, Inc. (the "Company")
in connection with its registration under the Securities Act of 1933, as
amended, of 8,060,000 shares of its common stock, no par value (the "Shares"),
which are proposed to be offered and sold pursuant to (1) the 1999 Stock
Incentive Plan of RF Micro Devices, Inc. (the "1999 Plan") and (2) option
agreements with certain directors of the Company (each, an "Agreement"). The
Company is filing today a Registration Statement on Form S-8 (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission") with
respect to the Shares.
We have reviewed the Company's articles of incorporation and bylaws,
each as amended to date, and have examined the originals, or copies certified or
otherwise identified to our satisfaction, of corporate records of the Company,
including minute books of the Company as furnished to us by the Company,
certificates of public officials and of representatives of the Company, statutes
and other instruments and documents, as a basis for the opinions hereinafter
expressed. In rendering this opinion, we have relied upon certificates of public
officials and officers of the Company with respect to the accuracy of the
factual matters contained in such certificates. We also have reviewed the 1999
Plan, the form of Agreement and the Registration Statement.
In connection with such review, we have assumed with your permission
(1) the genuineness of all signatures; (2) the authenticity of all documents
submitted to us as originals and the conformity to original documents of all
documents submitted to us as certified or photostatic copies; and (3) the proper
issuance and accuracy of certificates of public officials and officers and
agents of the Company. In rendering opinions as to future events, we have
assumed the facts and law existing on the date hereof.
Based upon the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that the Shares
have been duly authorized and, when issued and paid for in accordance with the
terms of the 1999 Plan or an Agreement, as applicable, will be validly issued,
fully paid and nonassessable.
This opinion is limited to the laws of the State of North Carolina.
This opinion is rendered as of the date hereof, and we undertake no obligation
to advise you of any changes in applicable law or any other matters that may
come to our attention after the date hereof.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5 to the Registration Statement. In giving this consent, we do not admit
that we are within the category of persons whose consent is required by Section
7 of the Securities Act, or other rules and regulations of the Commission
thereunder.
WOMBLE CARLYLE SANDRIDGE & RICE
A Professional Limited Liability Company
By: /s/ Jane Jeffries Jones
------------------------------------
Jane Jeffries Jones
<PAGE> 1
EXHIBIT 23.2
<PAGE> 2
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
(Form S-8) pertaining to the 1999 Stock Incentive Plan of RF Micro Devices, Inc.
and certain Stock Option Agreements between RF Micro Devices, Inc. and certain
directors of RF Micro Devices, Inc. of our report dated April 23, 1999, with
respect to the financial statements and schedule of RF Micro Devices, Inc.
included in its Annual Report (Form 10-K) for the year ended March 31, 1999,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Raleigh, North Carolina
December 16, 1999
<PAGE> 1
EXHIBIT 99.1
<PAGE> 2
1999 STOCK INCENTIVE PLAN
OF
RF MICRO DEVICES, INC.
<PAGE> 3
1999 STOCK INCENTIVE PLAN
OF
RF MICRO DEVICES, INC.
1. PURPOSE
The purpose of the 1999 Stock Incentive Plan of RF Micro Devices, Inc. (the
"Plan") is to encourage and enable selected employees, directors and independent
contractors of RF Micro Devices, Inc. (the "Corporation") and its related
corporations to acquire or to increase their holdings of common stock of the
Corporation (the "Common Stock") and other proprietary interests in the
Corporation 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. This purpose will be carried out through
the granting of benefits (collectively referred to herein as "awards") to
selected employees, independent contractors and directors, including the
granting of incentive stock options ("incentive options") intended to qualify
under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
nonqualified stock options ("nonqualified options"), stock appreciation rights
("SARs"), restricted stock awards ("restricted stock awards"), and restricted
units ("restricted units") to such participants. Incentive options and
nonqualified options shall be referred to herein collectively as "options."
Restricted stock awards and restricted units shall be referred to herein
collectively as "restricted awards."
2. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Board of Directors of the
Corporation (the "Board" or the "Board of Directors") or, upon its delegation,
by the Compensation Committee of the Board of Directors (the "Committee").
Unless the Board determines otherwise, the Committee shall be comprised solely
of "non-employee directors," as such term is defined in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or as may
otherwise be permitted under Rule 16b-3. Further, to the extent required by
Section 162(m) of the Code and related regulations, the Plan shall be
administered by a committee comprised of "outside directors" (as such term is
defined in Section 162(m) or related regulations) or as may otherwise be
permitted under Section 162(m) and related regulations. For the purposes herein,
the term "Administrator" shall refer to the Board and, upon its delegation to
the Committee of all or part of its authority to administer the Plan, to the
Committee.
(b) Any action of the Administrator with respect to the Plan may be taken
by a written instrument signed by all of the members of the Board or Committee,
as appropriate, and any such 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 take any
action with respect to the Plan including, without limitation, the authority (i)
to determine all matters relating to awards, including selection of individuals
to be granted awards, the types of awards, the number of shares of the Common
Stock, if any, subject to an award, and all terms, conditions, restrictions and
limitations of an award; (ii) to prescribe the form or forms of the agreements
evidencing any awards granted under the Plan; (iii) to establish, amend and
rescind rules and regulations for the administration of the Plan; and (iv) to
construe and interpret the Plan and agreements evidencing awards granted under
the Plan, to interpret rules and regulations for administering the Plan and to
make all other determinations deemed necessary or advisable for administering
the Plan. The Administrator shall also have authority, in its sole discretion,
<PAGE> 4
to accelerate the date that any award which was not otherwise exercisable or
vested shall become exercisable or vested in whole or in part without any
obligation to accelerate such date with respect to any other award granted to
any recipient. In addition, the Administrator shall have the authority and
discretion to establish terms and conditions of awards as the Administrator
determines to be necessary or appropriate to conform to the applicable
requirements or practices of jurisdictions outside of the United States.
(c) Notwithstanding Section 2(b), the Administrator may delegate to the
chief executive officer of the Corporation the authority to grant awards, and to
make any or all of the determinations reserved for the Administrator in the Plan
and summarized in Section 2(b) herein with respect to such awards, to any
individual who, at the time of said grant or other determination, (i) is not
deemed to be an officer or director of the Corporation within the meaning of
Section 16 of the Exchange Act, (ii) is not deemed to be a covered employee (as
defined in Section 18(b) herein), and (iii) is otherwise eligible under Section
5. To the extent that the Administrator has delegated authority to grant awards
pursuant to this Section 2(c) to the chief executive officer, references to the
Administrator shall include references to such person, subject, however, to the
requirements of the Plan, Rule 16b-3, Section 162(m) of the Code and other
applicable law.
3. EFFECTIVE DATE
The effective date of the Plan shall be July 1, 1999 (the "Effective
Date"). Awards may be granted under the Plan on and after the effective date,
but no awards will be granted after June 30, 2009.
4. SHARES OF STOCK SUBJECT TO THE PLAN; AWARD LIMITATIONS
(a) Subject to adjustments as provided in this Section 4, the number of
shares of Common Stock that may be issued pursuant to awards shall be four
million (4,000,000) shares. Such shares shall be authorized but unissued shares
or shares purchased on the open market or by private purchase. The maximum
number of shares of Common Stock that may be issued under the Plan pursuant to
the grant of restricted awards shall not exceed 500,000 shares. No participant
may be granted awards in any 12-month period for more than 100,000 shares of
Common Stock (or the equivalent value thereof based on the fair market value per
share of the Common Stock on the date of grant of an award).
(b) The Corporation hereby reserves sufficient authorized shares of Common
Stock to meet the grant of awards hereunder. Any shares subject to an award
which is subsequently forfeited, expires or is terminated may again be the
subject of an award granted under the Plan. To the extent that any shares of
Common Stock subject to an award are not delivered to a participant (or his
beneficiary) because the award is forfeited, canceled, settled in cash or used
to satisfy applicable tax withholding obligations, such shares shall not be
deemed to have been issued for purposes of determining the maximum number of
shares of Common Stock available for issuance under the Plan. If the purchase
price of an award granted under the Plan is satisfied by tendering shares of
Common Stock, only the number of shares issued net of the shares of Common Stock
tendered shall be deemed issued for purposes of determining the maximum number
of shares of Common Stock available for issuance under the Plan.
(c) If there is any change in the outstanding shares of Common Stock
because of a merger, consolidation or reorganization involving the Corporation
or a related corporation, or if the Board of
2
<PAGE> 5
Directors of the Corporation declares a stock dividend or stock split
distributable in shares of Common Stock, or if there is a similar change in the
capital stock 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 awards or to any provisions of this Plan as the
Administrator deems equitable to prevent dilution or enlargement of awards or as
may be otherwise advisable.
5. ELIGIBILITY
An award may be granted only to an individual who satisfies the following
eligibility requirements on the date the award is granted:
(a) The individual is either (i) an employee of the Corporation or a
related corporation, (ii) a director of the Corporation or a related
corporation, or (iii) an independent contractor, consultant or advisor
(collectively, "independent contractors") providing services to the Corporation
or a related corporation. For this purpose, an individual shall be considered to
be an "employee" only if there exists between the individual and the Corporation
or a related corporation the legal and bona fide relationship of employer and
employee.
(b) With respect to the grant of incentive options, the individual does not
own, immediately before the time that the incentive option is granted, stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Corporation or a related corporation. Notwithstanding the
foregoing, an individual who owns more than 10% of the total combined voting
power of the Corporation or a related corporation may be granted an incentive
option if the option price is at least 110% of the fair market value of the
Common Stock (as defined in Section 6(c)(ii) herein), and the option period (as
defined in Section 6(d) herein) does not exceed five years. For this purpose, an
individual will be deemed to own stock which is attributable to him under
Section 424(d) of the Code.
(c) With respect to the grant of substitute awards or assumption of awards
in connection with a merger, reorganization or similar business combination
involving the Corporation or related corporation, the recipient is otherwise
eligible to receive the award and the terms of the award are consistent with the
Plan and applicable laws, rules and regulations (including, to the extent
necessary, the federal securities laws registration provisions and Section
424(a) of the Code).
(d) The individual, being otherwise eligible under this Section 5, is
selected by the Administrator as an individual to whom an award shall be granted
(a "participant").
6. OPTIONS
(a) Grant of Options: Subject to the limitations of the Plan, the
Administrator may in its sole and absolute discretion grant options to such
eligible individuals in such numbers, upon such terms and at such times as the
Administrator shall determine. Both incentive options and nonqualified options
may be granted under the Plan. To the extent that an option is designated as an
incentive option but does not qualify as such under Section 422 of the Code, the
option (or portion thereof) shall be treated as a nonqualified option.
3
<PAGE> 6
(b) Option Price: The price per share at which an option may be exercised
(the "option price") shall be established by the Administrator and stated in the
agreement evidencing the grant of the option; provided, that (i) in the case of
an incentive option, the option price shall be no less than the fair market
value per share of the Common Stock (as determined in accordance with Section
6(c)(ii) on the date the option is granted) and (ii) in no event shall the
option price per share of any option be less than the par value per share of the
Common Stock.
(c) Date of Grant; Fair Market Value
(i) An incentive option shall be considered to be granted on the date
that the Administrator acts to grant the option, or on any later date
specified by the Administrator as the effective date of the option. A
nonqualified option shall be considered to be granted on the date the
Administrator acts to grant the option or any other date specified by the
Administrator as the date of grant of the option.
(ii) For the purposes of the Plan, the fair market value per share of
the Common Stock shall be established in good faith by the Administrator
and, except as may otherwise be determined by the Administrator, the fair
market value shall be determined in accordance with the following
provisions: (A) 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 Stock 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 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 (B) if the shares of
Common Stock are not listed or reported in any of the foregoing, then the
fair market value shall be determined by the Administrator 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.
(iii) In no event shall there first become exercisable by an employee
in any one calendar year incentive options granted by the Corporation or
any related corporation with respect to shares having an aggregate fair
market value (determined at the time an incentive option is granted)
greater than $100,000.
(d) Option Period and Limitations on the Right to Exercise Options
(i) The term of an option (the "option period") shall be determined by
the Administrator at the time the option is granted and stated in the
individual agreement. With respect to incentive options, the option period
shall not extend more than 10 years from the date on which the option is
granted. Any option or portion thereof not exercised before expiration of
the option period shall terminate. The period or periods during which an
option may become
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<PAGE> 7
exercisable shall be determined by the Administrator in a manner consistent
with the terms of the Plan.
(ii) An option may be exercised by giving written notice to the
Corporation at such place as the Corporation or its designee 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. Unless the individual
option agreement provides otherwise, such payment shall be in the form of
(A) cash; (B) delivery (by either actual delivery or attestation) of shares
of Common Stock owned by the participant at the time of exercise and
acceptable to the Administrator; (C) shares of Common Stock withheld upon
exercise; (D) delivery of written notice of exercise to the Corporation 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 (E) a combination of the
foregoing methods. Shares tendered or withheld in payment on the exercise
of an option shall be valued at their fair market value on the date of
exercise, as determined by the Administrator by applying the provisions of
Section 6(c)(ii).
(iii) Unless an individual option agreement provides otherwise, no
option granted to a participant who was an employee at the time of grant
shall be exercised unless the participant is, at the time of exercise, an
employee as described in Section 5(a), and has been an employee
continuously since the date the option was granted, subject to the
following:
(A) An option shall not be affected by any change in the terms,
conditions or status of the participant's employment, provided that
the participant continues to be an employee of the Corporation or a
related corporation.
(B) The employment relationship of a participant shall be treated
as continuing intact for any period that the participant is on
military or sick leave or other bona fide leave of absence, provided
that the period of such leave does not exceed 90 days, or, if longer,
as long as the participant's right to reemployment is guaranteed
either by statute or by contract. The employment relationship of a
participant shall also be treated as continuing intact while the
participant is not in active service because of disability. The
Administrator shall have sole authority to determine whether a
participant is disabled and, if applicable, the date of a
participant's termination of employment or service for any reason (the
"termination date").
(C) Unless an individual option agreement provides otherwise, if
the employment of a participant is terminated because of disability,
or if the participant dies while he is an employee, the option may be
exercised only to the extent exercisable on the participant's
termination date, except that the Administrator may in its discretion
accelerate the date for exercising all or any part of the option which
was not otherwise exercisable on the termination date. The option must
be exercised, if at all, prior to the first to occur of the following,
whichever shall be applicable: (X) the close of the period of 12
months next
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<PAGE> 8
succeeding the termination date; or (Y) the close of the option
period. In the event of the participant's death, such option shall be
exercisable by such person or persons as shall have acquired the right
to exercise the option by will or by the laws of intestate succession.
(D) Unless an individual option agreement provides otherwise, if
the employment of the participant is terminated for any reason other
than disability, death or for "cause," his option may be exercised to
the extent exercisable on his termination date, except that the
Administrator may in its discretion accelerate the date for exercising
all or any part of the option which was not otherwise exercisable on
the termination date. The option must be exercised, if at all, prior
to the first to occur of the following, whichever shall be applicable:
(X) the close of the period of 90 days next succeeding the termination
date; or (Y) the close of the option period. If the participant dies
following such termination of employment and prior to the earlier of
the dates specified in (X) or (Y) of this subparagraph (D), the
participant shall be treated as having died while employed under
subparagraph (C) immediately preceding (treating for this purpose the
participant's date of termination of employment as the termination
date). In the event of the participant's death, such option shall be
exercisable by such person or persons as shall have acquired the right
to exercise the option by will or by the laws of intestate succession.
(E) Unless an individual option agreement provides otherwise, if
the employment of the participant is terminated for "cause," his
option shall lapse and no longer be exercisable as of his termination
date, as determined by the Administrator. For purposes of this
subparagraph (E) and subparagraph (D), the participant's termination
shall be for "cause" if such termination results from the
participant's (X) dishonesty; (Y) refusal to perform his duties for
the Corporation; or (Z) engaging in conduct that could be materially
damaging to the Corporation without a reasonable good faith belief
that such conduct was in the best interest of the Corporation. The
determination of "cause" shall be made by the Administrator and its
determination shall be final and conclusive.
(F) Notwithstanding the foregoing, the Administrator shall have
authority, in its discretion, to extend the period during which an
option may be exercised; provided that, in the event that any such
extension shall cause an incentive option to be designated as a
nonqualified option, no such extension shall be made without the prior
written consent of the participant.
(iv) Unless an individual option agreement provides otherwise, an
option granted to a participant who was a non-employee director of the
Corporation or a related corporation at the time of grant may be exercised
only to the extent exercisable on the date of the participant's termination
of service to the Corporation or a related corporation (unless the
termination was for cause), and must be exercised, if at all, prior to the
first to occur of the following, as applicable: (X) the close of the period
of one year next succeeding the termination date; or (Y) the close of the
option period. If the services of such a participant are terminated for
cause (as defined in Section 6(d)(iii)(E) herein), his option shall lapse
and no longer be exercisable as of
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<PAGE> 9
his termination date, as determined by the Administrator. Notwithstanding
the foregoing, the Administrator may in its discretion accelerate the date
for exercising all or any part of an option which was not otherwise
exercisable on the termination date or extend the period during which an
option may be exercised, or both.
(v) Unless an individual option agreement provides otherwise, an
option granted to a participant who was an independent contractor of the
Corporation or a related corporation at the time of grant (and who does not
thereafter become an employee, in which case he shall be subject to the
provisions of Section 6(d)(iii) herein) may be exercised only to the extent
exercisable on the date of the participant's termination of service to the
Corporation or a related corporation (unless the termination was for
cause), and must be exercised, if at all, prior to the first to occur of
the following, as applicable: (X) the close of the period of 90 days next
succeeding the termination date; or (Y) the close of the option period. If
the services of such a participant are terminated for cause (as defined in
Section 6(d)(iii)(E) herein), his option shall lapse and no longer be
exercisable as of his termination date, as determined by the Administrator.
Notwithstanding the foregoing, the Administrator may in its discretion
accelerate the date for exercising all or any part of an option which was
not otherwise exercisable on the termination date or extend the period
during which an option may be exercised, or both.
(vi) A participant or his legal representative, legatees or
distributees shall not be deemed to be the holder of any shares subject to
an option and shall not have any rights of a shareholder unless and until
certificates for such shares have been issued and delivered 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
participant (or his beneficiary) and distributed to the participant (or his
beneficiary) as soon as practicable following receipt of notice of exercise
and payment of the purchase price (except as may otherwise be determined by
the Corporation in the event of payment of the option price pursuant to
Section 6(d)(ii)(D) herein).
(e) Nontransferability of Options
(i) Incentive options shall not be transferable other than by will or
the laws of intestate succession. Nonqualified options shall not be
transferable other than by will or the laws of intestate succession, except
as may be permitted by the Administrator in a manner consistent with the
registration provisions of the Securities Act of 1933, as amended (the
"Securities Act"). Except as may be permitted by the preceding sentence, an
option shall be exercisable during the participant's lifetime only by him
or by his guardian or legal representative. The designation of a
beneficiary does not constitute a transfer.
(ii) If a participant is subject to Section 16 of the Exchange Act,
shares of Common Stock acquired upon exercise of an option may not, without
the consent of the Administrator, be disposed of by the participant until
the expiration of six months after the date the option was granted.
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<PAGE> 10
7. STOCK APPRECIATION RIGHTS
(a) Grant of SARs: Subject to the limitations of the Plan, the
Administrator may in its sole and absolute discretion grant SARs to such
eligible individuals, in such numbers, upon such terms and at such times as the
Administrator shall determine. SARs may be granted to an optionee of an option
(hereinafter called a "related option") with respect to all or a portion of the
shares of Common Stock subject to the related option (a "tandem SAR") or may be
granted separately to an eligible individual (a "freestanding SAR").
(b) Tandem SARs: A tandem SAR may be granted either concurrently with the
grant of the related option or (if the related option is a nonqualified option)
at any time thereafter prior to the complete exercise, termination, expiration
or cancellation of such related option. Tandem SARs shall be exercisable only at
the time and to the extent that the related option is exercisable (and may be
subject to such additional limitations on exercisability as the Administrator
may provide in the agreement), and in no event after the complete termination or
full exercise of the related option. For purposes of determining the number of
shares of Common Stock that remain subject to such related option and for
purposes of determining the number of shares of Common Stock in respect of which
other awards may be granted, a related option shall be considered to have been
surrendered upon the exercise of a tandem SAR to the extent of the number of
shares of Common Stock with respect to which such tandem SAR is exercised. Upon
the exercise or termination of a related option, the tandem SARs with respect
thereto shall be canceled automatically to the extent of the number of shares of
Common Stock with respect to which the related option was so exercised or
terminated. Subject to the limitations of the Plan, upon the exercise of a
tandem SAR, the participant shall be entitled to receive from the Corporation,
for each share of Common Stock with respect to which the tandem SAR is being
exercised, consideration equal in value to the excess of the fair market value
of a share of Common Stock on the date of exercise over the related option price
per share; provided, that the Administrator may establish a maximum value
payable for such SARs.
(c) Freestanding SARs: Unless an individual agreement provides otherwise,
the base price of a freestanding SAR shall be not less than 100% of the fair
market value of the Common Stock (as determined in accordance with Section
6(c)(ii) herein) on the date of grant of the freestanding SAR. Subject to the
limitations of the Plan, upon the exercise of a freestanding SAR, the
participant shall be entitled to receive from the Corporation, for each share of
Common Stock with respect to which the freestanding SAR is being exercised,
consideration equal in value to the excess of the fair market value of a share
of Common Stock on the date of exercise over the base price per share of such
freestanding SAR; provided, that the Administrator may establish a maximum value
payable for such SARs.
(d) Exercise of SARs:
(i) Subject to the terms of the Plan, SARs shall be exercisable in
whole or in part upon such terms and conditions as may be established by
the Administrator and stated in the related agreement. The period during
which an SAR may be exercisable shall not exceed 10 years from the date of
grant or, in the case of tandem SARs, such shorter option period as may
apply to the related option. Any SAR or portion thereof not exercised
before expiration of the exercise period established by the Administrator
shall terminate.
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<PAGE> 11
(ii) SARs may be exercised by giving written notice to the Corporation
at such place as the Administrator or its designee shall direct. The date
of exercise of an SAR shall mean the date on which the Corporation shall
have received proper notice from the participant of the exercise of such
SAR.
(iii) No SAR may be exercised unless the participant is, at the time
of exercise, an eligible participant, as described in Section 5, and has
been a participant continuously since the date the SAR was granted, subject
to the provisions of Sections 6(d)(iii), (iv) and (v) herein.
(e) Consideration: The consideration to be received upon the exercise of
the SAR by the participant shall be paid in cash, shares of Common Stock (valued
at fair market value on the date of exercise of such SAR in accordance with
Section 6(c)(ii) herein) or a combination of cash and shares of Common Stock, as
elected by the Administrator. The Corporation's obligation arising upon the
exercise of the SAR may be paid currently or on a deferred basis with such
interest or earnings equivalent, if any, as the Administrator may determine. A
certificate or certificates for shares of Common Stock acquired upon exercise of
an SAR for shares shall be issued in the name of the participant (or his
beneficiary) and distributed to the participant (or his beneficiary) as soon as
practicable following receipt of notice of exercise. A participant or his legal
representative, legatees or distributees shall not be deemed to be the holder of
any shares subject to an SAR and shall not have any rights as a shareholder
unless and until certificates for such shares have been issued and delivered to
him or them under the Plan. No fractional shares of Common Stock will be
issuable upon exercise of the SAR and, unless otherwise provided in the
applicable agreement, the participant will receive cash in lieu of fractional
shares.
(f) Limitations: The applicable SAR agreement shall contain such terms,
conditions and limitations consistent with the Plan as may be specified by the
Administrator. Unless otherwise provided in the applicable agreement or the
Plan, any such terms, conditions or limitations relating to a tandem SAR shall
not restrict the exercisability of the related option.
(g) Nontransferability:
(i) SARs shall not be transferable other than by will or the laws of
intestate succession. SARs may be exercised during the participant's
lifetime only by him or by his guardian or legal representative. The
designation of a beneficiary does not constitute a transfer.
(ii) If the participant is subject to Section 16 of the Exchange Act,
shares of Common Stock acquired upon exercise of an SAR may not, without
the consent of the Administrator, be disposed of by the participant until
the expiration of six months after the date the SAR was granted.
8. RESTRICTED AWARDS
(a) Grant of Restricted Awards: Subject to the limitations of the Plan, the
Administrator may in its sole and absolute discretion grant restricted awards to
such individuals in such numbers, upon such terms and at such times as the
Administrator shall determine. A restricted award may consist of a restricted
stock award or a restricted unit, or both. Restricted awards shall be payable in
cash or whole shares of Common Stock (including restricted stock), or partly in
cash and partly in whole shares of
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<PAGE> 12
Common Stock, in accordance with the terms of the Plan and the sole and absolute
discretion of the Administrator. The Administrator shall determine the nature,
length and starting date of the period, if any, during which a restricted award
may be earned (the "restriction period"), and shall determine the conditions
which must be met in order for a restricted award to be granted or to vest or be
earned (in whole or in part), which conditions may include, but are not limited
to, attainment of performance objectives, completion of the restriction period
(or a combination of attainment of performance objectives and completion of the
restriction period), retirement, displacement, disability or death, or any
combination of such conditions. In the case of restricted awards based upon
performance criteria, or a combination of performance criteria and continued
service, the Administrator shall determine the performance objectives to be used
in valuing restricted awards and determine the extent to which such awards have
been earned. Performance objectives may vary from participant to participant and
between groups of participants and shall be based upon such Corporation,
business unit and/or individual performance factors and criteria as the
Administrator in its sole discretion may deem appropriate, including, but not
limited to, sales goals, earnings per share, return on equity, return on assets
or total return to shareholders. The Administrator shall have sole authority to
determine whether and to what degree restricted awards have been earned and are
payable and to interpret the terms and conditions of restricted awards and the
provisions herein. The Administrator shall also determine the form and terms of
payment of awards. The Administrator, in its sole and absolute discretion, may
accelerate the date that any restricted award granted to the participant shall
be deemed to be earned in whole or in part, without any obligation to accelerate
such date with respect to other restricted awards.
(b) Forfeiture of Restricted Awards: Unless an individual agreement
provides otherwise, if the employment or service of a participant shall be
terminated for any reason and the participant has not yet earned all or part of
a restricted award pursuant to the terms of the Plan and the individual
agreement, such award to the extent not then earned shall be forfeited
immediately upon such termination and the participant shall have no further
rights with respect thereto.
(c) Dividend and Voting Rights; Share Certificates: Unless an individual
agreement provides otherwise, (i) a participant shall have no dividend rights or
voting rights or other rights as a shareholder with respect to shares subject to
a restricted award that has not yet vested; and (ii) a certificate or
certificates for shares representing a restricted award payable in shares shall
be issued in the name of the participant (or his beneficiary) and distributed to
the participant (or his beneficiary) as soon as practicable after the shares
subject to the award shall be earned.
(d) Nontransferability:
(i) The recipient of a restricted award shall not sell, transfer,
assign, pledge or otherwise encumber shares subject to the award until all
conditions to vesting have been met and shares have been issued and
delivered to him.
(ii) Restricted awards shall not be transferable other than by will or
the laws of intestate succession. The designation of a beneficiary does not
constitute a transfer.
(iii) If a participant of a restricted award is subject to Section 16
of the Exchange Act, shares of Common Stock subject to such award may not,
without the consent of the Administrator, be sold or otherwise disposed of
within six months following the date of grant of such award.
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9. WITHHOLDING
The Corporation shall withhold all required local, state and federal taxes
from any amount payable in cash with respect to an award. The Corporation shall
require any recipient of an award payable in shares of the Common Stock to pay
to the Corporation in cash the amount of any tax or other amount required by any
governmental authority to be withheld and paid over by the Corporation to such
authority for the account of such recipient. Notwithstanding the foregoing, the
Corporation may establish procedures to permit a recipient to satisfy such
obligation in whole or in part, and any other local, state or federal income tax
obligations relating to such an award, by electing (the "election") to have the
Corporation withhold shares of Common Stock from the shares to which the
recipient is entitled. The number of shares to be withheld shall have a fair
market value as of the date that the amount of tax to be withheld is determined
as nearly equal as possible to (but not exceeding) the amount of such
obligations being satisfied. Each election must be made in writing to the
Administrator in accordance with election procedures established by the
Administrator.
10. SECTION 16(B) COMPLIANCE
It is the general intent of the Corporation that transactions under the
Plan which are subject to Section 16 of the Exchange Act shall comply with Rule
16b-3 under the Exchange Act. Notwithstanding anything in the Plan to the
contrary, the Administrator, in its sole and absolute discretion, may bifurcate
the Plan so as to restrict, limit or condition the use of any provision of the
Plan to participants who are officers or directors subject to Section 16 of the
Exchange Act without so restricting, limiting or conditioning the Plan with
respect to other participants.
11. NO RIGHT OR OBLIGATION OF CONTINUED EMPLOYMENT
Nothing in the Plan shall confer upon the participant any right to continue
in the service of the Corporation or a related corporation as an employee,
director, or independent contractor or to interfere in any way with the right of
the Corporation or a related corporation to terminate the participant's
employment or service at any time. Except as otherwise provided in the Plan or
an individual agreement, awards granted under the Plan to employees of the
Corporation or a related corporation shall not be affected by any change in the
duties or position of the participant, as long as such individual remains an
employee of, or in service to, the Corporation or a related corporation.
12. UNFUNDED PLAN; RETIREMENT PLANS
(a) Neither a participant nor any other person shall, by reason of the
Plan, acquire any right in or title to any assets, funds or property of the
Corporation or any related corporation, including, without limitation, any
specific funds, assets or other property which the Corporation or any related
corporation, in their discretion, may set aside in anticipation of a liability
under the Plan. A participant shall have only a contractual right to the Common
Stock or amounts, if any, payable under the Plan, unsecured by any assets of the
Corporation or any related corporation. Nothing contained in the Plan shall
constitute a guarantee that the assets of such corporations shall be sufficient
to pay any benefits to any person.
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<PAGE> 14
(b) In no event shall any amounts accrued, distributable or payable under
the Plan be treated as compensation for the purpose of determining the amount of
contributions or benefits to which any person shall be entitled under any
retirement plan sponsored by the Corporation or a related corporation that is
intended to be a qualified plan within the meaning of Section 401(a) of the
Code.
13. AMENDMENT AND TERMINATION OF THE PLAN
The Plan and any award granted under the Plan may be amended or terminated
at any time by the Board of Directors of the Corporation; provided, that (i)
approval of an amendment to the Plan by the shareholders of the Corporation
shall be required to the extent, if any, that shareholder approval of such
amendment is required by applicable law, rule or regulation; and (ii) such
amendment or termination of an award shall not, without the consent of a
recipient of an award, adversely affect the rights of the recipient with respect
to an outstanding award.
14. RESTRICTIONS ON SHARES
The Corporation may impose such restrictions on any shares representing
awards hereunder as it may deem advisable, including without limitation
restrictions under the federal securities laws, the requirements of any stock
exchange or similar organization and any blue sky or state 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 make any other distribution of benefits
under the Plan, or take any other action, unless such delivery, distribution
or action is in compliance with all applicable laws, rules and regulations
(including but not limited to the requirements of the Securities Act). The
Corporation may cause a restrictive legend to be placed on any certificate
issued pursuant to an award 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.
15. APPLICABLE LAW
The Plan shall be governed by and construed in accordance with the laws of
the State of North Carolina, without regard to the conflict of laws provisions
of any state.
16. SHAREHOLDER APPROVAL
The Plan is subject to approval by the shareholders of the Corporation,
which approval must occur, if at all, within 12 months of the effective date of
the Plan. Awards granted prior to such shareholder approval shall be conditioned
upon and shall be effective only upon approval of the Plan by such shareholders
on or before such date.
17. 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 17(b) herein):
(i) All options and SARs outstanding as of the date of such change of
control shall become fully exercisable, whether or not then otherwise
exercisable.
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<PAGE> 15
(ii) Any restrictions including but not limited to the restriction
period applicable to any restricted award shall be deemed to have expired,
and such restricted awards shall become fully vested and payable to the
fullest extent of the original grant of the applicable award.
(iii) 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 sole
and absolute discretion, determine that any or all awards granted pursuant
to the Plan shall not vest or become exercisable on an accelerated basis,
if the Corporation or 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 awards granted under the Plan or the
grant of substitute awards (in either case, with substantially similar
terms as awards 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 17(a)(iii), 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.
(b) 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.)
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<PAGE> 16
18. CERTAIN DEFINITIONS
In addition to other terms defined in the Plan, the following terms shall
have the meaning indicated:
(a) "Agreement" means any written agreement or agreements between the
Corporation and the recipient of an award pursuant to the Plan relating to the
terms, conditions and restrictions of options, SARs, restricted awards and any
other awards conferred herein.
(b) "Covered employee" shall have the meaning given the term in Section
162(m) of the Code or the regulations thereunder.
(c) "Disability" shall mean the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or which has lasted or can
be expected to last for a continuous period of not less than twelve months.
(d) "Parent" or "parent corporation" shall mean any corporation (other than
the Corporation) in an unbroken chain of corporations ending with the
Corporation if each corporation other than the Corporation owns stock possessing
50% or more of the total combined voting power of all classes of stock in
another corporation in the chain.
(e) "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 assumption under Section 424(a) had
occurred) with the Corporation, or a corporation which is a parent or subsidiary
of the Corporation, or a predecessor of any such corporation.
(f) "Related corporation" means any parent, subsidiary or predecessor of
the Corporation.
(g) "Restricted stock" shall mean shares of Common Stock which are subject
to restricted awards payable in shares, the vesting of which is subject to
restrictions set forth in the Plan or the agreement relating to such award.
(h) "Retirement" shall mean retirement in accordance with the retirement
policies and procedures established by the Corporation, unless an individual
agreement establishes a different meaning for such term.
(i) "Subsidiary" or "subsidiary corporation" means any corporation (other
than the Corporation) in an unbroken chain of corporations beginning with the
Corporation if each corporation other than the last corporation in the unbroken
chain owns stock possessing 50% or more of the total combined voting power of
all classes of stock in another corporation in the chain.
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IN WITNESS WHEREOF, this 1999 Stock Incentive Plan of RF Micro Devices,
Inc., is, by the authority of the Board of Directors of the Corporation,
executed in behalf of the Corporation, the 1st day of July, 1999.
RF MICRO DEVICES, INC.
By: /s/ David A. Norbury
-----------------------------------------
Name: David A. Norbury
Title: President and Chief Executive Officer
ATTEST:
/s/ William A. Priddy, Jr.
- -------------------------------------
Secretary
[Corporate Seal]
<PAGE> 1
EXHIBIT 99.2
<PAGE> 2
RF MICRO DEVICES, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement"), made as of the 27th day of
October 1998, between RF MICRO DEVICES, INC., a North Carolina corporation (the
"Corporation"), and ______________ (the "Director");
R E C I T A L :
To compensate the Director for his service on the Board of Directors and to
promote a closer identification of his interests with those of the Corporation,
the Corporation and the Director hereby agree as follows:
1. The Corporation hereby grants to the Director as a matter of separate
inducement and agreement in connection with his services to the Corporation, the
right and option (the "Option") to purchase all or any part of an aggregate of
five thousand (5,000) shares of the Common Stock of the Corporation (the
"shares"), at the purchase price of $20.875 per share. The Option is designated
as a nonqualified stock option and, as such, is not intended to qualify for
treatment as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended. The Option will expire if not exercised in full on or
before the 26th day of October, 2008.
2. The Option shall become exercisable on the dates set forth on Schedule A
hereto. To the extent that the Option is exercisable but not exercised, such
Option shall accumulate and be exercisable by the Director in whole or in part
at any time prior to expiration of the Option. An Option shall be exercised by
giving written notice to the Secretary of the Corporation or his designee. Such
notice shall specify the number of shares to be purchased pursuant to the 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 Secretary 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 by the Corporation. Upon the
exercise of an Option in whole or in part and payment of the purchase price to
the Corporation in accordance with the foregoing, the Corporation shall as soon
thereafter as practicable deliver to the Director a certificate or certificates
for the shares purchased.
3. Nothing contained in this Agreement shall require the Corporation or a
related corporation to continue the services of the Director as a director for
any particular period of time, nor shall it require the Director to remain in
service to the Corporation or a related corporation as a director for any
particular period of time. Except as otherwise expressly provided below, all
rights of the Director under this Agreement with respect to the unexercised
portion of his Option shall terminate immediately upon termination of the
services of the Director with the Corporation as a director. Notwithstanding the
foregoing, (i) if the Director dies while serving as a director, any portion of
his Option which was exercisable immediately before his death may be exercised
at any time within 180
<PAGE> 3
days of the date of death by such person or persons as shall have acquired the
right to exercise the Option by will or the laws of intestate succession; and
(ii) if the Director's service on the Board terminates for any reason other than
death, that portion of his Option which was exercisable immediately before such
termination may be exercised at any time within 30 days following the date of
such termination, and after such 30-day period such Option shall terminate.
4. This Option shall not be transferable (including by pledge or
hypothecation) other than by will or the laws of intestate succession. 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 Corporation, be disposed of by
the Director until the expiration of six months after the date the Option was
granted. This Option shall be exercisable during the Director's lifetime only by
the Director or by his guardian or legal representative.
5. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective executors, administrators, next-of-kin,
successors and assigns.
6. The Corporation may impose such restrictions on any shares issued
pursuant to the exercise of the Option granted hereunder as it may deem
advisable, including without limitation restrictions under the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the requirements of any applicable self-regulatory organization and
any blue sky or securities laws applicable to such shares. Notwithstanding any
other provision herein to the contrary, the Corporation shall not be obligated
to issue, deliver or transfer shares of Common Stock under this Agreement 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.
It is the general intent of the Corporation that this Agreement and
transactions under this Agreement shall comply in all respects with Rule 16b-3
under the Exchange Act, and, if any provision herein 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 this Agreement shall be construed in favor of
transactions hereunder meeting the requirements of Rule 16b-3 or successor rules
applicable to this Agreement.
7. Notwithstanding any other provision of this Agreement to the contrary,
in the event of a Change of Control (as defined below), the Option outstanding
as of the date of such Change of Control shall become fully exercisable, whether
or not then otherwise exercisable. Notwithstanding the foregoing, in the event
of a merger, share exchange, reorganization or other business combination
affecting the Corporation or a related corporation, the Board of Directors of
the Corporation may, in its sole and absolute discretion, determine that any or
all of the Option 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
the Option or the grant of substitute awards (in either case, with substantially
similar terms as the Option), as in the opinion of the Board of Directors is
equitable or appropriate to protect the rights and interests of the Director
under this Agreement.
2
<PAGE> 4
For the purposes of this Agreement, 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
date of this Agreement 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.
8. This Agreement shall be governed by and construed in accordance with the
laws of the State of North Carolina.
3
<PAGE> 5
IN WITNESS WHEREOF, this Agreement has been executed in behalf of the
Corporation and by the Director on the day and year first above written.
RF MICRO DEVICES, INC.
By:
-------------------------------------
David A. Norbury
President and Chief Executive Officer
Attest:
- -----------------------------
- -----------------------------
Secretary
[Corporate Seal]
DIRECTOR
---------------------------------------
Printed:
-------------------------------
4
<PAGE> 6
RF MICRO DEVICES, INC.
STOCK OPTION AGREEMENT
SCHEDULE A
Name of Optionee: ________________________.
Date Option granted: October 27, 1998.
Date Option expires: October 26, 2008.
Number of shares subject to Option: 5,000 shares.
Option price (per share): $20.875.
<TABLE>
<CAPTION>
Date Installment Number of Shares
First Exercisable in Installment
----------------- ----------------
<S> <C>
October 27, 1999 1,666
October 27, 2000 1,667
October 27, 2001 1,667
</TABLE>
