Document:

Ex-10.32

 

EXHIBIT 10.32

AMENDMENT NO. 1 TO

CHANGE IN CONTROL AGREEMENT

     This AMENDMENT NO. 1 TO CHANGE IN CONTROL AGREEMENT (the “Amendment”) is entered into
effective as of June 9, 2005 to the Change in Control Agreement (the “Agreement”) dated
_________, by and between RF MICRO DEVICES, INC., a North Carolina corporation (the
“Company”), and
_________ (the “Executive”).

     WHEREAS, the Executive and the Company desire to enter into the Amendment in order to make
certain technical changes to the definition of “Change in Control” in the Agreement;

     NOW, THEREFORE, in consideration of the mutual promises and agreements contained in this
Amendment and the Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Executive and the Company hereby agree as follows:

     1. Paragraph 2(b) of the Agreement is amended and restated in its entirety to read as follows:

     (b) For the purposes of this Agreement, a “Change in Control” of the Company shall be
deemed to have occurred on the first to occur of the following:

     (i) The date any entity or person shall have become the beneficial owner of, or
shall have obtained voting control over, forty percent (40%) or more of the
outstanding Common Stock of the Company;

     (ii) The date the shareholders of the Company approve a definitive agreement
(A) to merge or consolidate the Company with or into another corporation or other
business entity (for these purposes, each, a “corporation”), in which the holders of
the Company’s Common Stock immediately prior to the merger or consolidation have
voting control over less than sixty percent (60%) of the voting securities of the
surviving corporation outstanding immediately after such merger or consolidation, or
(B) to sell or otherwise dispose of all or substantially all the assets of the
Company; or

     (iii) The date there shall have been a change in a majority of the Board of
Directors of the Company within a 12-month period unless the nomination for election
by the Company’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.

 

 

     2. Except as provided herein, all other terms and provisions of the Agreement shall remain
unchanged and remain in full force and effect.

     IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the date and year
first above written.

	 	 	 	 	 
	

	 	RF MICRO DEVICES, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Printed Name: ______________________
	

	 	Title: _____________________________
	 
	 	 	 	 
	ATTEST:
	 	 	 	 
	 

	 
	 	 	 	 
	 
	 	 	 	 
	Secretary	 	 	 	 
	[Corporate Seal]	 	 	 	 
	 
	 	 	 	 
	

	 	EXECUTIVE
	 

	 
	 	 	 	 
	

	 	 
	

	 	Printed Name:Ex-10.33

 

EXHIBIT 10.33

2003 STOCK INCENTIVE PLAN

OF

RF MICRO DEVICES, INC.

 

 

2003 STOCK INCENTIVE PLAN

OF

RF MICRO DEVICES, INC.

1. Purpose

     The purpose of the 2003 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. (RF Micro Devices, Inc., together with any successor corporation thereto, being
referred to herein as the “Corporation”) and its related entities 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 to selected participants 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 awards in the form of restricted stock
awards (“restricted stock awards”) and restricted stock units (“restricted stock
units”), and performance awards in the form of performance shares (“performance
shares”) and performance units (“performance units”). Incentive options and
nonqualified options shall be referred to herein collectively as “options.” Restricted
stock awards and restricted stock units shall be referred to herein collectively as “restricted
awards.” Performance shares and performance units shall be referred to herein collectively as
“performance 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 two or more “non-employee directors,”
as such term is defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or as may otherwise be permitted under Rule 16b-3. 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 two or more “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) In addition to action by meeting in accordance with applicable laws, 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, awards and award agreements made 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, to accelerate the date that any award which was not otherwise exercisable, vested or
earned shall become exercisable, vested or earned 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
(including but not limited to the establishment of subplans) as the Administrator determines to be
necessary or appropriate to conform to the applicable requirements or practices of jurisdictions
outside of the United States. No member of the Board or Committee, as applicable, shall be liable
while acting as Administrator for any action or determination made in good faith with respect to
the Plan, an award or an award agreement. The members of the Board or Committee, as applicable,
shall be entitled to indemnification and reimbursement in the manner provided in the Corporation’s
articles of incorporation.

     (c) Notwithstanding the other provisions of Section 2, the Administrator may delegate to one
or more officers 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 (subject to any restrictions imposed by applicable laws, rules and
regulations and such terms and conditions as may be established by the Administrator); provided,
however, that, to the extent required by Section 16 of the Exchange Act or Section 162(m) of the
Code, the participant, 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; and
(ii) is not deemed to be a “covered employee” as defined under Section 162(m) of the Code and
related regulations. To the extent that the Administrator has delegated authority to grant awards
pursuant to this Section 2(c) to one or more officers of the Corporation, references to the
Administrator shall include references to such officer or officers, subject, however, to the
requirements of the Plan, Rule 16b-3, Section 162(m) of the Code and other applicable laws, rules
and regulations.

3. Effective Date

     The effective date of the Plan shall be July 22, 2003 (the “Effective Date”). Awards
may be granted under the Plan on and after the Effective Date, but no awards will be granted after
July 21, 2013. Awards which are outstanding on July 21, 2013 (or such earlier termination date as
may be established by the Board pursuant to Section 16(a) herein) shall continue in accordance with
their terms, unless otherwise provided in the Plan or an award agreement.

4. Shares of Stock Subject to the Plan; Award Limitations

     (a) Shares Available for Awards: Subject to adjustments as provided in this Section 4(c), the
aggregate number of shares of Common Stock that may be issued pursuant to awards granted under the
Plan shall not exceed the sum of (i) 9,250,000 shares, plus (ii) any shares of Common Stock (A)
remaining available for issuance as of the Effective Date of the Plan under the Corporation’s 1999
Stock Incentive Plan, Key Employees’ 1997 Stock Option Plan, 1992 Stock Option Plan and any other
stock incentive plans maintained by the Corporation (collectively, the “Prior Plans”),
and/or (B) subject to an award granted under a Prior Plan, which award is forfeited,

2

 

cancelled, terminated, expires or lapses for any reason. Shares delivered under the Plan shall be
authorized but unissued shares or shares purchased on the open market or by private purchase. The
Corporation hereby reserves sufficient authorized shares of Common Stock to meet the grant of
awards hereunder. Notwithstanding any provision herein to the contrary, the following limitations
shall apply to awards granted under the Plan, in each case subject to adjustment pursuant to
Section 4(c):

     (i) The maximum number of shares of Common Stock that may be issued under the Plan
pursuant to the grant of incentive stock options shall not exceed 9,250,000 shares; and

     (ii) No participant may be granted awards in any 12-month period for more than 800,000
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) Shares not subject to limitations: The following will not be applied to the share
limitations of Section 4(a) above: (i) dividends, including dividends paid in shares, or dividend
equivalents paid in cash in connection with outstanding awards, (ii) awards which by their terms
are settled in cash, (iii) shares and any awards that are granted through the assumption of, or in
substitution for, outstanding awards previously granted as the result of a merger, consolidation,
or acquisition of the employing company (or an affiliate) pursuant to which it is merged with the
Corporation or becomes a related entity of the Corporation, (iv) any shares subject to an award
under the Plan which award is forfeited, cancelled, terminated, expires or lapses for any reason,
and (v) any shares surrendered by a participant or withheld by the Corporation to pay the option
price for an option or used to satisfy any tax withholding requirement in connection with the
exercise, vesting or earning of an award if, in accordance with the terms of the Plan, a
participant pays such option price or satisfies such tax withholding by either tendering previously
owned shares or having the Corporation withhold shares.

     (c) Adjustments: 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 entity, or if the
Board of Directors of the Corporation declares a stock dividend, stock split distributable in
shares of Common Stock, reverse stock split, combination or reclassification of the Common Stock,
or if there is a similar change in the capital stock structure of the Corporation or a related
entity 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 and 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 entity, (ii) a
director of the Corporation or a related entity, or (iii) an independent contractor, consultant or
advisor (collectively, “independent contractors”) providing services to the Corporation or
a related entity. For this purpose, an individual shall be considered to be an “employee”
only if there exists

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between the individual and the Corporation or a related entity 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)(i) 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, consolidation, acquisition, reorganization or similar business combination involving the
Corporation or a related entity, 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, subject to
such terms and conditions, and at such times as the Administrator shall determine. Both incentive
options and nonqualified options may be granted under the Plan, as determined by the Administrator;
provided, however, that incentive options may only be granted to employees of the Corporation or a
related corporation. 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.

     (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 award agreement evidencing
the grant of the option; provided, that (i) the option price of an option 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 (or 110% of the fair market value with respect to incentive
options granted to an employee who owns stock possessing more than 10% of the total voting power of
all classes of stock of the Corporation or a related corporation, as provided in Section 5(b)
herein); and (ii) in no event shall the option price per share of any option be less than the par
value per share, if any, 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

4

 

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 other determination is made (each, a “valuation date”), or, if
there is no transaction on such date, then on the trading date nearest preceding the
valuation date 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 or nearest preceding the valuation date 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 shall be stated in the individual award
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 (or five years with respect to
incentive options granted to an employee who owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Corporation or a related
corporation, as provided in Section 5(b) herein). Any option or portion thereof not
exercised before expiration of the option period shall terminate. The period or periods
during which, and conditions pursuant to which, an option may become exercisable shall be
determined by the Administrator in its discretion, subject to the terms of the Plan.

     (ii) An option may be exercised by giving written notice to the Corporation in form
acceptable to the Administrator at such place and subject to such conditions as may be
established by the Administrator or its designee. 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 payment of such purchase price. Unless an individual
award agreement provides otherwise, such payment shall be in the form of cash or cash
equivalent; provided that, where permitted by the Administrator and applicable laws, rules

5

 

and regulations (including but not limited to Section 402 of the Sarbanes-Oxley Act of
2002), payment may also be made:

     (A) By delivery (by either actual delivery or attestation) of shares of Common
Stock owned by the participant at the time of exercise for a period of at least six
months and otherwise acceptable to the Administrator;

     (B) By shares of Common Stock withheld upon exercise;

     (C) By 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;

     (D) By such other payment methods as may be approved by the Administrator and
which are acceptable under applicable law; or

     (E) By any 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 the Administrator determines 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
entity.

     (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 the Administrator determines otherwise, if the employment of
a participant is terminated because of disability or death, 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

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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 succeeding the termination date (or such other period stated in the
applicable award agreement); 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 the Administrator determines 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 such other period stated in the
applicable award agreement); 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 the Administrator determines 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 the Plan, unless the Administrator
determines otherwise, a participant’s termination shall be for “cause” if
such termination results from the participant’s (X) termination for “cause”
under the participant’s employment, consulting or other agreement with the
Corporation or a related entity, if any, or (Y) if the participant has not
entered into any such employment, consulting or other agreement, then the
participant’s termination shall be for “cause” if termination results due to
the participant’s (i) dishonesty; (ii) refusal to perform his duties for the
Corporation; or (iii) 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 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, extend the
period during which an option may be exercised, modify the terms and
conditions to exercise, or any combination of the foregoing.

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     (iv) Unless the Administrator determines otherwise, an option granted to a participant
who was a non-employee director of the Corporation or a related entity 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 entity (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 24 months next succeeding the termination date
(or such other period stated in the applicable award agreement); or (Y) the close of the
option period. If the services of such a participant are terminated for cause (as defined
in Section 6(a)(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, extend the period
during which an option may be exercised, modify the other terms and conditions to exercise,
or any combination of the foregoing.

     (v) Unless the Administrator determines otherwise, an option granted to a participant
who was an independent contractor of the Corporation or a related entity 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
entity (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 such other period stated in the applicable award
agreement); 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, extend the period during which an option may be exercised, modify the
other terms and conditions to exercise, or any combination of the foregoing.

     (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)(C) herein).

     (vii) If shares of Common Stock acquired upon exercise of an incentive option are
disposed of within two years following the date of grant or one year following the transfer
of such shares to a participant upon exercise, the participant shall, promptly following
such disposition, notify the Corporation in writing of the date and terms of such
disposition and provide such other information regarding the disposition as the
Administrator may reasonably require.

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     (e) Nontransferability of Options: Incentive options shall not be transferable (including by
sale, assignment, pledge or hypothecation) other than by will or the laws of intestate succession.
Nonqualified options shall not be transferable (including by sale, assignment, pledge or
hypothecation) 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.

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 the holder 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”). Subject to the limitations of
the Plan, upon the exercise of an SAR, a participant shall be entitled to receive from the
Corporation, for each share of Common Stock with respect to which the 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 SAR. The base price per share of an SAR
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 SAR is granted.

     (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.

     (c) Freestanding SARs: An SAR may be granted without relationship to an option (as defined
above, a “freestanding SAR”) and, in such case, will be exercisable upon such terms and subject to
such conditions as may be determined by the Administrator, subject to the terms of the Plan.

     (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
applicable award 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

9

 

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.

     (ii) SARs may be exercised by giving written notice to the Corporation in form
acceptable to the Administrator at such place and subject to such terms and conditions as
may be established by the Administrator or its designee. 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) Each participant’s award agreement shall set forth the extent to which the
participant shall have the right to exercise an SAR following termination of the
participant’s employment or service with the Corporation. Such provisions shall be
determined in the sole discretion of the Administrator, shall be included in the award
agreement entered into with a participant, need not be uniform among all SARs issued
pursuant to this Section 7, and may reflect distinctions based on the reasons for
termination of employment. Notwithstanding the foregoing, unless the Administrator
determines otherwise, 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 award agreement,
the participant will receive cash in lieu of fractional shares.

     (f) Limitations: The applicable award 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 award 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: Unless the Administrator determines otherwise, SARs shall not be
transferable (including by sale, assignment, pledge or hypothecation) other than by will or the
laws of intestate succession, and 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.

10

 

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. Such restricted awards may
be in the form of restricted stock awards and/or restricted stock units that are subject to certain
conditions, which conditions must be met in order for the restricted award to vest and be earned
(in whole or in part) and no longer subject to forfeiture. 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 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, continued service or employment for a certain
period of time (or a combination of attainment of performance objectives and continued service),
retirement, displacement, disability, 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, which performance objectives may vary from participant to participant
and between groups of participants and shall be based upon such corporate, business unit or
division and/or individual performance factors and criteria as the Administrator in its sole
discretion may deem appropriate; provided, however, that, with respect to restricted awards payable
to covered employees which are intended to be eligible for the compensation deduction limitation
exception available under Section 162(m) of the Code and related regulations, such performance
factors shall be limited to one or more of the following (as determined by the Administrator in its
discretion): sales goals, earnings per share, return on equity, return on assets and total return
to shareholders. The Administrator shall have sole authority to determine whether and to what
degree restricted awards have vested and been earned and are payable and to establish and interpret
the terms and conditions of restricted awards and the provisions herein. The Administrator shall
also determine the form and terms of payment of restricted 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 vested or earned in whole or in part, without any obligation to
accelerate such date with respect to other restricted awards granted to any participant.

     (b) Forfeiture of Restricted Awards: Unless the Administrator determines otherwise, if the
employment or service of a participant shall be terminated for any reason and all or any part of a
restricted award has not vested or been earned pursuant to the terms of the Plan and the individual
award agreement, such award, to the extent not then vested or 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: The Administrator shall have sole
discretion to determine whether a participant shall have dividend rights, voting rights or other
rights as a shareholder with respect to shares subject to a restricted award which has not yet
vested or been earned. Unless the Administrator determines otherwise, a certificate or
certificates for shares of Common Stock subject to a restricted award 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 (or portion thereof) have vested and been
earned. Notwithstanding the foregoing, the Administrator shall have the right to retain custody of
certificates evidencing the

11

 

shares subject to a restricted award and to require the participant to deliver to the Corporation a
stock power, endorsed in blank, with respect to such award, until such time as the restricted award
vests (or is forfeited).

     (d) Nontransferability: Unless the Administrator determines otherwise, restricted awards that
have not vested shall not be transferable (including by sale, assignment, pledge or hypothecation)
other than by will or the laws of intestate succession, and the recipient of a restricted award
shall not sell, transfer, assign, pledge or otherwise encumber shares subject to the award until
the restriction period has expired and until all conditions to vesting have been met.

9. Performance Awards

     (a) Grant of Performance Awards: Subject to the terms of the Plan, performance awards may be
granted to participants upon such terms and conditions and at such times as shall be determined by
the Administrator. Such performance awards may be in the form of performance shares and/or
performance units. An award of a performance share is a grant of a right to receive shares of
Common Stock or the cash value thereof (or a combination thereof) which is contingent upon the
achievement of performance or other objectives during a specified period and which has a value on
the date of grant equal to the fair market value (as determined in accordance with Section
6(c)(iii) herein) of a share of Common Stock. An award of a performance unit is a grant of a right
to receive shares of Common Stock or a designated dollar value amount of Common Stock which is
contingent upon the achievement of performance or other objectives during a specified period, and
which has an initial value established by the Administrator at the time of grant. Subject to
Section 4(a), above, the Administrator shall have complete discretion in determining the number of
performance units and/or performance shares granted to any participant. The Administrator shall
determine the nature, length and starting date of the period during which a performance award may
be earned (the “performance period”), and shall determine the conditions which must be met
in order for a performance award to be granted or to vest or be earned (in whole or in part), which
conditions may include but are not limited to specified performance objectives, continued service
or employment for a certain period of time, or a combination of such conditions. The Administrator
shall determine the performance objectives to be used in valuing performance awards, which
performance objectives may vary from participant to participant and between groups of participants
and shall be based on such corporate, business unit or division and/or individual performance
factors and criteria as the Administrator in its sole discretion may deem appropriate; provided,
however, that, with respect to performance awards payable to covered employees which are intended
to be eligible for the compensation deduction limitation exception available under Section 162(m)
of the Code and related regulations, such performance factors shall be limited to one or more of
the following (as determined by the Administrator in its discretion): sales goals, earnings per
share, return on equity, return on assets and total return to shareholders. The Administrator
shall have sole authority to determine whether and to what degree performance awards have been
earned and are payable and to interpret the terms and conditions of performance awards and the
provisions herein. The Administrator also shall determine the form and terms of payment of
performance awards. The Administrator, in its sole and absolute discretion, may accelerate the
date that any performance award granted to a participant shall be deemed to be earned in whole or
in part, without any obligation to accelerate such date with respect to other awards granted to any
participant.

     (b) Form of Payment: Payment of the amount to which a participant shall be entitled upon
earning a performance award shall be made in cash, shares of Common Stock, or a combination of cash
and shares of Common Stock, as determined by the Administrator in its sole

12

 

discretion. Payment may be made in a lump sum or in installments upon such terms as may be
established by the Administrator.

     (c) Forfeiture of Performance Awards: Unless the Administrator determines otherwise, if the
employment or service of a participant shall terminate for any reason and the participant has not
earned all or part of a performance award pursuant to the terms of the Plan and individual award
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.

     (d) Dividend and Voting Rights; Share Certificates: The Administrator shall have sole
discretion to determine whether a participant shall have dividend rights, voting rights, or other
rights as a shareholder with respect to shares, if any, which are subject to a performance award
prior to the time the performance award has been earned. Unless the Administrator determines
otherwise, a certificate or certificates for shares of Common Stock, if any, subject to a
performance award 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 award has been
earned. Notwithstanding the foregoing, the Administrator shall have the right to retain custody of
certificates evidencing the shares subject to a performance award and the right to require the
participant to deliver to the Corporation a stock power, endorsed in blank, with respect to such
award, until such time as the award is earned (or forfeited).

     (e) Nontransferability: Unless the Administrator determines otherwise, performance awards
which have not been earned shall not be transferable (including by sale, assignment, pledge or
hypothecation) other than by will or the laws of intestate succession, and the recipient of a
performance award shall not sell, transfer, assign, pledge or otherwise encumber any shares subject
to the award until the performance period has expired and until the conditions to earning the award
have been met.

10. Withholding

     The Corporation shall withhold all required local, state, federal, foreign and other taxes
from any amount payable in cash with respect to an award. Prior to the delivery or transfer of any
certificate for shares or any other benefit conferred under the Plan, the Corporation shall require
any recipient of an award 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 Administrator may
establish procedures to permit a recipient to satisfy such obligation in whole or in part, and any
local, state, federal, foreign or other 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.

11. Dividends and Dividend Equivalents

     The Administrator may, in its sole discretion, provide that the awards granted under the Plan
earn dividends or dividend equivalents. Such dividends or dividend equivalents may be paid
currently or may be credited to a participant’s account. Any crediting of dividends or dividend

13

 

equivalents may be subject to such restrictions and conditions as the Administrator may
establish, including reinvestment in additional shares of Common Stock or share equivalents.

12. Section 16(b) Compliance

     To the extent that any participants in the Plan are subject to Section 16(b) of the Exchange
Act, it is the general intention of the Corporation that transactions under the Plan shall comply
with Rule 16b-3 under the Exchange Act and that the Plan shall be construed in favor of the Plan
transactions meeting the requirements of Rule 16b-3 or any successor rules thereto.
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.

13. Code Section 162(m) Performance-Based Compensation

     To the extent to which Section 162(m) of the Code is applicable, the Corporation intends that
compensation paid under the Plan to covered employees (as such term is defined in Section 162(m)
and related regulations) will, to the extent practicable, constitute qualified “performance-based
compensation” within the meaning of Section 162(m) and related regulations, unless otherwise
determined by the Administrator. Accordingly, the provisions of the Plan shall be administered and
interpreted in a manner consistent with Section 162(m) and related regulations to the extent
practicable to do so.

14. No Right or Obligation of Continued Employment or Service

     Nothing in the Plan shall confer upon the participant any right to continue in the service of
the Corporation or a related entity as an employee, director or independent contractor or to
interfere in any way with the right of the Corporation or a related entity to terminate the
participant’s employment or service at any time. Except as otherwise provided in the Plan or an
award agreement, awards granted under the Plan to employees of the Corporation or a related entity
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 entity.

15. 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 entity, including,
without limitation, any specific funds, assets or other property which the Corporation or any
related entity, 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 entity. 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.

     (b) The amount of any compensation deemed to be received by a participant pursuant to an award
shall not constitute compensation with respect to which any other employee benefits of such
participant are determined, including, without limitation, benefits under any bonus, pension,

14

 

profit sharing, life insurance or salary continuation plan, except as otherwise specifically
provided by the terms of such plan or as may be determined by the Administrator.

     (c) The adoption of the Plan shall not affect any other stock incentive or other compensation
plans in effect for the Corporation or any related entity, nor shall the Plan preclude the
Corporation from establishing any other forms of stock incentive or other compensation for
employees or service providers of the Corporation or any related entity.

16. Amendment and Termination of the Plan

     (a) General: 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)
amendment or termination of an award shall not, without the consent of a recipient of an award,
materially adversely affect the rights of the recipient with respect to an outstanding award.
Notwithstanding clause (i) of the preceding sentence, except for adjustments made pursuant to
Section 4(c), the option price for any outstanding option or base price of any outstanding SAR
granted under the Plan may not be decreased after the date of grant, nor may any outstanding option
or SAR granted under the Plan be surrendered to the Corporation as consideration for the grant of a
new option or SAR with a lower exercise or base price than the original option or SAR, as the case
may be, without shareholder approval of any such action.

     (b) Adjustment of Awards upon the Occurrence of Certain Unusual or Nonrecurring Events: The
Administrator shall have authority to make adjustments to the terms and conditions of awards in
recognition of unusual or nonrecurring events affecting the Corporation or any related entity, or
the financial statements of the Corporation or any related entity, or of changes in applicable
laws, regulations or accounting principles, if the Administrator determines that such adjustments
are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or necessary or appropriate to comply with applicable
laws, rules or regulations.

     (c) Cash Settlement: Notwithstanding any provision of the Plan, an award or an award agreement
to the contrary, the Administrator may cause any award granted under the Plan to be canceled in
consideration of an alternative award or cash payment of an equivalent cash value, as determined by
the Administrator, made to the holder of such canceled award.

17. Restrictions on Awards and Shares

     The Corporation may impose such restrictions on awards and 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 securities. 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, 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

15

 

in such form as may be prescribed from time to time by applicable laws and regulations or as may be
advised by legal counsel.

18. Change of Control

     (a) Notwithstanding any other provision of the Plan to the contrary, and unless an individual
award agreement provides otherwise, in the event of a change of control (as defined in Section
18(c) 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.

     (ii) Any restrictions including but not limited to the restriction period, performance
period and/or performance criteria applicable to any restricted award and any performance
award shall be deemed to have been met, and such awards shall become fully vested, earned
and payable to the fullest extent of the original grant of the applicable award.

     (b) Notwithstanding the foregoing, in the event of a merger, share exchange, reorganization or
other business combination affecting the Corporation or a related entity, 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 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 or equivalent economic benefits 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
18(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 entity.

     (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 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 or other business
entity (each, a “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

16

 

     (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.)

19. 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.

20. 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.

21. Deferrals

     The Administrator may permit or require a participant to defer receipt of the delivery of
shares of Common Stock or other benefit that would otherwise be due pursuant to the exercise,
vesting or earning of an award. If any such deferral is required or permitted, the Administrator
shall, in its discretion, establish rules and procedures for such deferrals.

22. Beneficiary Designation

     The Administrator may permit a participant to designate in writing a person or persons as
beneficiary, which beneficiary shall be entitled to receive settlement of awards (if any) to which
the participant is otherwise entitled in the event of death. In the absence of such designation by
a participant, and in the event of the participant’s death, the estate of the participant shall be
treated as beneficiary for purposes of the Plan, unless the Administrator determines otherwise. The
Administrator shall have sole discretion to approve and interpret the form or forms of such
beneficiary designation.

23. Gender and Number

     Where the context admits, words in any gender shall include any other gender, words in the
singular shall include the plural and the plural shall include the singular.

17

 

24. Successors and Assigns

     The Plan shall be binding upon the Corporation, its successors and assigns, and participants,
their executors, administrators and permitted transferees and beneficiaries.

25. Severability

     If any provision of the Plan shall be held illegal or invalid for any reason, such illegality
or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

26. Certain Definitions

     In addition to other terms defined in the Plan, the following terms shall have the meaning
indicated:

     (a) “Award 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 an award conferred herein. Such award agreement may also state such other
terms, conditions and restrictions, including but not limited to terms, conditions and restrictions
applicable to shares subject to an award, as may be established by the Administrator.

     (b) “Covered employee” shall have the meaning given the term in Section 162(m) of the
Code and the regulations thereunder.

     (c) “Disability” shall have the meaning ascribed to the term in any employment
agreement, consulting agreement or other similar agreement, if any, to which the participant is a
party, or, if no such agreement applies, “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 12 months.

     (d) “Displacement” shall have the meaning ascribed to the term in any employment
agreement, consulting agreement or other similar agreement, if any, to which the participant is a
party, or, if no such agreement applies, “displacement” shall mean the termination of the
participant’s employment or service due to the elimination of the participant’s job or position
without fault on the part of the participant.

     (e) “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.

     (f) “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.

18

 

     (g) “Related corporation” means any parent, subsidiary or predecessor of the
Corporation, and “related entity” means any related corporation or any other business entity which
is an affiliate controlled by the Corporation; provided, however, that the term “related entity”
shall be construed in a manner in accordance with the registration provisions under applicable
federal securities laws.

     (h) “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 and the applicable award agreement.

     (i) “Retirement” shall have the meaning ascribed in any employment agreement,
consulting agreement or other similar agreement, if any, to which the participant is a party, or,
if no such agreement applies, “retirement” shall mean retirement in accordance with the retirement
policies and procedures established by the Corporation.

     (j) “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.

     IN WITNESS WHEREOF, this 2003 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
6th day of June, 2003.

	 	 	 	 	 
	

	 	RF MICRO DEVICES, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ WILLIAM A. PRIDDY, JR.
	

	 	 	 	 
	

	 	Name: William A. Priddy, Jr.

Title: Chief Financial Officer and Corporate

          Vice President of Administration
	 
	 	 	 	 
	ATTEST:
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	/s/ POWELL T. SEYMOUR
	 	 	 	 
	 
	 	 	 	 
	Secretary
	 	 	 	 
	 
	 	 	 	 
	[Corporate Seal]
	 	 	 	 

19

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