FORM OF COMMSCOPE, INC. EMPLOYEE PERFORMANCE SHARE UNIT AWARD AGREEMENT (WITH RELATED DIVIDEND EQUIVALENT RIGHTS)
Exhibit
10.2
FORM
OF
COMMSCOPE,
INC.
2006
LONG TERM INCENTIVE PLAN
(WITH
RELATED DIVIDEND EQUIVALENT RIGHTS)
THIS
AGREEMENT, made as of the ____ day of _______, 2008 (the “Date of
Grant”), between CommScope, Inc., a Delaware corporation (the
“Company”), and ____________ (the “Grantee”).
WHEREAS,
the Company has adopted the CommScope, Inc. 2006 Long-Term Incentive Plan (the
“Plan”) in order to provide an additional incentive to certain employees
and directors of the Company and its Subsidiaries; and
WHEREAS,
the Committee responsible for the administration of the Plan has determined
to
grant performance share units to the Grantee as provided herein;
NOW,
THEREFORE, the parties hereto agree as follows:
1. Grant.
1.1 The
Company hereby grants to the Grantee an award (the “Award”) of ___
performance share units (the “Performance Share Units”) and _____
dividend equivalent rights (the “Dividend Equivalent Rights”), each
Performance Share Unit to be accompanied by one (1) related Dividend Equivalent
Right. The Performance Share Units and Dividend Equivalent Rights
granted pursuant to the Award shall be subject to the execution and return
of
this Agreement by the Grantee (or the Grantee’s estate, if applicable) to the
Company. Subject to the terms of this Agreement, each Performance
Share Unit represents the right to receive one (1) Share at the time and in
the
manner set forth in Section 7 hereof.
1.2
Each Dividend Equivalent Right represents the right to receive all of the cash
dividends that are or would be payable with respect to the Share represented
by
the Performance Share Unit to which the Dividend Equivalent Right
relates. With respect to each Dividend Equivalent Right, any such
cash dividends shall be paid on the Vesting Date. The Dividend
Equivalent Rights shall be subject to the same terms and conditions applicable
to the Performance Share Units, including, without limitation, the forfeiture
and vesting provisions contained in Sections 2 through 4, inclusive, of this
Agreement. In the event that a Performance Share Unit is forfeited
pursuant to Section 3 hereof, the related Dividend Equivalent Right shall also
be forfeited.
1.3 This
Agreement shall be construed in accordance and consistent with, and subject
to,
the provisions of the Plan (the provisions of which are hereby incorporated
by
reference) and, except as otherwise expressly set forth herein, the capitalized
terms used in this Agreement shall have the same definitions as set forth in
the
Plan.
2. Vesting.
2.1 Except
as provided in Sections 3 and 4 hereof, the Performance Share Units granted
hereunder with respect to which the Performance Goals (as defined below) set
forth in Section 2.2 have been satisfied will vest on the third anniversary
of
the Date of Grant (the “Vesting Date”) provided the Grantee has remained
in continuous employment from the Date of Grant to the Vesting
Date.
2.2 The
following table sets forth the percentage of Performance Share
Units granted hereunder with respect to which the Performance Goals
will be satisfied based on the Operating Income (the “Performance Goals”)
for fiscal year 2008 (the “Performance Year”):
|
<
Minimum
|
Minimum
|
Target
|
Maximum
|
>
Maximum
|
|
|
Operating
Income
|
<$___
|
$___
|
$___
|
$___
|
>$___
|
|
Percent
of Performance Share Units with respect to which Performance Goals
are
satisfied
|
0%
|
50%
|
100%*
|
150%
|
150%
|
|
*
|
The
amount set forth in Section 1.1.
|
The
percentage of Performance Share
Units with respect to which the Performance Goals have been satisfied is
determined by using a straight line interpolation rounded to the nearest whole
number of Performance Share Units between 50% and 100% or between 100% and
150%,
as applicable, depending on the Operating Income attained.
For
purposes of this Agreement,
“Operating Income” shall mean: “Operating Income (Loss),” as such item appears
on the Company's Consolidated Statements of Operations for 2008, increased
or
reduced by each of the following to the extent that any such item is used to
determine “Operating Income (Loss)”: (1) impairment charges for goodwill or
other long lived assets including fixed assets and investments; (2) any
acquisition or divestiture related expenses, gains or losses, including one-time
start up and transition costs, amortization of any inventory related fair value
adjustments, in process research and development write-offs, incremental
depreciation resulting from fair value adjustments to fixed assets acquired
in
the three months ended December 31, 2007 or later, amortization of intangible
assets acquired in the three months ended December 31, 2007 or later, and other
business acquisition purchase accounting adjustments; (3) any recoveries or
impairments of Brazilian value-added tax receivables (e.g., federal, state,
local or other similar value added taxes) recorded as of December 31, 2007
for
CommScope Cabos do Brasil, Ltda.; (4) any gains or losses on disposal of long
lived assets including property, plant and equipment; and (5) any restructuring
costs. In addition, adjustments shall be made with respect to this
determination to reflect any change in accounting standards that affect the
calculation of Operating Income (Loss) as reflected on the Company's
Consolidated Statements of Operations for 2008.
The
Award will terminate as to any and
all Performance Share Units with respect to which Performance Goals have not
been satisfied as of the end of the Performance Year.
3.
Termination of Employment.
3.1 Death
or Disability. In the event of the Grantee’s death or Disability
(i) during the Performance Year, 100% of the Award shall become immediately
vested without regard to satisfaction of the Performance Goals, and (ii)
following the completion of the Performance Year but prior to the Vesting Date,
the number of Performance Share Units with respect to which the Performance
Goals were satisfied for the Performance Year in accordance with Section 2,
if
any, shall become immediately vested.
3.2 Retirement. In
the event that (i) the Grantee has completed 10 years of service for the
Company, a Subsidiary or a Division, and the Grantee’s employment is terminated
prior to the Vesting Date as a result of the Grantee’s voluntary retirement
after attainment of age 55, or (ii) the Grantee’s employment is terminated prior
to the Vesting Date as a result of the Grantee’s voluntary retirement after
attainment of age 65, the “Pro Rata Portion” (as defined below) of the Award
shall remain outstanding and the Pro Rata Portion of the number of Performance
Share Units with respect to which the Performance Goals were satisfied for
the
Performance Year in accordance with Section 2, if any, will vest on the Vesting
Date, provided the Grantee complies with the post-employment covenants described
in Exhibit A, and the remainder of the Award shall immediately be
forfeited. In the event of a breach by the Grantee of any of the
post-employment covenants described in Exhibit A hereto, the entire Award
shall immediately be forfeited. The “Pro Rata Portion” shall be equal
to a fraction (not to exceed one), the numerator of which is the number of
whole
calendar months between the Date of Grant and the Grantee’s date of retirement
and the denominator of which is 36.
3.3 Cause. In
the event the Grantee’s employment is terminated for Cause prior to the Vesting
Date, the Award shall immediately be forfeited. For purposes of this
Agreement, “Cause” shall mean (i) in the case of a Grantee whose employment with
the Company, a Subsidiary or a Division is subject to the terms of an employment
agreement which includes a definition of “Cause,” the meaning set forth in such
employment agreement during the period that such employment agreement remains
in
effect; and (ii) in all other cases, (a) the Grantee’s failure or refusal to
perform such Grantee’s substantive duties or to follow the lawful directives of
the Board or the board of directors of a Subsidiary, as applicable (or of any
superior officer of the Company, a Subsidiary or a Division having direct
supervisory authority over such Grantee); (b) the commission of an act of
fraud, theft, breach of fiduciary obligation with respect to the Company, a
Subsidiary or a Division or a violation of any material policies of the Company,
a Subsidiary or a Division, as applicable, of which the Grantee has had prior
notice; (c) dishonesty, willful misconduct, or gross negligence in the
performance of any substantive duties; or (d) the indictment for, or
conviction of or plea of guilty or nolo contendere to any felony (whether or
not
involving the Company, a Subsidiary or a Division).
3.4 Other
Termination of Employment. If the employment of the Grantee is
terminated (including the Grantee’s ceasing to be employed by a Subsidiary or a
Division as a result of the sale of such Subsidiary or Division or an interest
in such Subsidiary or Division) prior to the Vesting Date under any circumstance
other than those set forth in Section 3.1, Section 3.2 and Section 3.3, the
Award shall immediately be forfeited.
4.
Effect of Change in Control.
Notwithstanding
anything contained in this Agreement to the contrary, in the event of a Change
in Control: (i) at any time during the Performance Year, 100% of the Award
shall
become immediately vested, without regard to satisfaction of the Performance
Goals, and (ii) following the completion of the Performance Year but prior
to
the Vesting Date, the number of Performance Share Units with respect to which
the Performance Goals were satisfied for the Performance Year in accordance
with
Section 2, if any, shall become immediately vested.
5.
Non-transferability.
The
Award
may not be sold, transferred or otherwise disposed of and may not be pledged
or
otherwise hypothecated.
6.
No Right to Continued Employment.
Nothing
in this Agreement or the Plan shall be interpreted or construed to confer upon
the Grantee any right with respect to continuance of employment by the Company,
any Subsidiary or any Division, nor shall this Agreement or the Plan interfere
in any way with the right of the Company, any Subsidiary or any Division to
terminate the Grantee’s employment therewith at any time.
7.
Issuance of Shares.
Except
as
provided in the following sentence, on the Vesting Date, or as soon thereafter
as administratively practicable (but in no event later than 2 ½ months after the
Vesting Date occurs), the Company shall issue Shares to the Grantee (or, if
applicable, the Grantee’s estate) with respect to Performance Share Units that
become vested (A) on the Vesting Date, (B) pursuant to Section 3.1 by reason
of
the Grantee’s Disability that does not constitute a Section 409A Disability (as
defined below) or (C) pursuant to Section 4 by reason of a Change in Control
that does not constitute a Section 409A Change in Control (as defined
below). Shares with respect to Performance Share Units that become
vested (A) pursuant to Section 3.1 by reason of the Grantee’s death, (B)
pursuant to Section 3.1 by reason of the Grantee’s Disability that constitutes a
“disability” within the meaning of Section 409A of the Code and the regulations
and interpretive guidance issued thereunder (a “Section 409A Disability”)
or (C) pursuant to Section 4 by reason of a Change in Control which also
constitutes a change in control or effective control of the Company or a change
in the ownership of a substantial portion of its assets, in each case within
the
meaning of Section 409A of the Code and the regulations and interpretive
guidance issued thereunder (a “Section 409A Change in Control”), shall be
issued upon the date such Performance Share Units become vested, or as soon
thereafter as administratively practicable (but in no event later than 2 ½
months after the date the Performance Share Unit becomes
vested). Notwithstanding anything to the contrary contained herein,
no Shares may be transferred to any person other than the Grantee unless such
other person presents documentation to the Committee, which proves to the
Committee to its reasonable satisfaction such person’s right to the
transfer.
8.
Withholding of Taxes.
Prior
to the delivery to the Grantee
(or the Grantee’s estate, if applicable) of Shares pursuant to Sections 1 and 7
hereof, the Grantee (or the Grantee’s estate) shall pay to the Company the
federal, state and local income taxes and other amounts as may be required
by
law to be withheld by the Company (the “Withholding Taxes”) with respect
to such Shares. The Grantee may make a written election (the “Tax
Election”) by completing and delivering a form of Tax Election in the manner
specified in the form of Tax Election, which will be provided to the Grantee
prior to the Vesting Date. Pursuant to the form of Tax Election,
Grantee may pay the applicable Withholding Taxes in any one or any combination
of (i) cash, (ii) unrestricted Shares owned by the Grantee prior to the vesting
of the Award and valued at its Fair Market Value on the business date
immediately preceding the Vesting Date, or (iii) by having withheld a portion
of
the Shares issuable to him or her upon vesting of the Award and valued at its
Fair Market Value on the date preceding the date of vesting. For
purposes of this Section 8, if the Grantee fails to make a Tax Election, the
Withholding Tax obligation will be satisfied by alternative (iii).
“Fair
Market Value” shall mean (i) if
the Shares are listed for trading on the New York Stock Exchange, the closing
price at the close of the primary trading session of the Shares on such date
on
the New York Stock Exchange, or if there has been no such closing price of
the
Shares on such date, on the next preceding date on which there was such a
closing price, (ii) if the Shares are not so listed, but are listed on another
national securities exchange, the closing price at the close of the primary
trading session of the Shares on such date on such exchange, or if there has
been no such closing price of the Shares on such date, on the next preceding
date on which there was such a closing price, (iii) if the Shares are not listed
for trading on the New York Stock Exchange or on another national securities
exchange, the last sale price at the end of normal market hours of the Shares
on
such date as quoted on the National Association of Securities Dealers Automated
Quotation System (“NASDAQ”) or, if no price shall have been so quoted for such
date, on the next preceding date for which such price was so quoted, or (iv)
if
the Shares are not listed for trading on a national securities exchange or
are
not authorized for quotation on NASDAQ, the fair market value of the Shares
as
determined in good faith by the Committee.
9.
Grantee Bound by the Plan.
The
Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound
by all the terms and provisions thereof.
10. Modification
of Agreement.
This
Agreement may be modified, amended, suspended or terminated, and any terms
or
conditions may be waived, but only by a written instrument executed by the
parties hereto.
11. Severability.
Should
any provision of this Agreement be held by a court of competent jurisdiction
to
be unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full
force
in accordance with their terms.
12. Governing
Law.
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Delaware without giving effect to the
conflicts of laws principles thereof.
13. Successors
in Interest.
This
Agreement shall inure to the benefit of and be binding upon any successor to
the
Company. This Agreement shall inure to the benefit of the Grantee’s
legal representatives. All obligations imposed upon the Grantee and
all rights granted to the Company under this Agreement shall be binding upon
the
Grantee’s heirs, executors, administrators and successors.
14. Resolution
of Disputes.
Any
dispute or disagreement which may arise under, or as a result of, or in any
way
relate to, the interpretation, construction or application of this Agreement
shall be determined by the Committee. Any determination made
hereunder shall be final, binding and conclusive on the Grantee, the Grantee’s
heirs, executors, administrators and successors, and the Company and its
Subsidiaries for all purposes.
15. Consent
to Jurisdiction.
Each
of
the parties hereby (a) agrees to personal jurisdiction in any suit, proceeding
or action at law or in equity (hereinafter referred to as an “Action”) arising
out of or relating to the Plan or this Agreement brought in any state or federal
court in the State of North Carolina having subject matter jurisdiction, (b)
agrees that such jurisdiction shall be exclusive and that no Action arising
out
of or relating to the Plan or this Agreement shall be brought in any state
or
federal court other than that in the State of North Carolina, (c) waives any
objection which the party may have now or hereafter to the laying of the venue
of any such Action and (d) waives any claim or defense of inconvenient
forum.
[Signature
page follows]
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COMMSCOPE,
INC.
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By:
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Name:
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Title:
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GRANTEE
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Exhibit
A
Non-Competition
and Confidentiality Covenants
By
execution of the performance unit award agreement to which this Exhibit A is
attached (the “Performance Share Unit Award Agreement”), the Grantee hereby
agrees as follows:
1. Non-competition. The
Grantee agrees that the Grantee will not, for a period of two years following
his termination of employment as described in Section 3.2 of the Performance
Share Unit Agreement (the “Non-Competition Period”), directly or indirectly own,
manage, operate, join, control, be employed by, or participate in the ownership,
management, operation or control of, or be connected in any manner, including
but not limited to holding, the positions of shareholder, director, officer,
consultant, independent contractor, employee, partner, or investor, with any
Competing Enterprise. For purposes of this paragraph, the term
“Competing Enterprise” shall mean any person, corporation, partnership or other
entity engaged in a business in the United States or any other geographic area
in which the Company does business which is in competition with any of the
businesses of the Company or any of its Affiliates as of the date of the
termination of the Grantee’s employment with the Company and its
Affiliates. Upon request at any time during the Non-Competition
Period, the Grantee shall notify the Company of the Grantee’s then current
employment status. As used herein, “Affiliate” shall mean the
Company’s affiliated companies, divisions, subsidiaries, successors,
predecessors and assigns.
2. Non-solicitation. During
the Non-Competition Period, the Grantee shall not interfere with the Company’s
and any of its Affiliate’s relationship with, or endeavor to entice away from
the Company and any of its Affiliates, any person who at any time, during the
period that the Grantee was employed by the Company or its Affiliates, was
an
employee or customer of the Company or any of its Affiliates or otherwise had
a
material business relationship with the Company or any of its
Affiliates.
3. Proprietary Rights. The
Grantee represents, warrants and covenants that all patents, patent
applications, rights to inventions, copyright registrations and other license,
trademark and trade name rights heretofore owned by the Grantee and relating
to
the business of the Company or any of its Affiliates have been or will be duly
transferred to the Company on or prior to the date of termination of employment
with the Company and its Affiliates.
4. Confidentiality;
Return of Company Property. The Grantee agrees and understands
that in the Grantee’s position with the Company and/or its Affiliates and
performance of his or her responsibilities, duties and services for the Company
and/or its Affiliates, as the case may be, the Grantee has been exposed to,
and
information relating to, the confidential affairs of the Company and/or its
Affiliates, including but not limited to technical information, intellectual
property, business and marketing plans, strategies, customer information, other
information concerning the products, promotions, development, financing,
expansion plans, business policies and practices of the Company and/or its
Affiliates, and other forms of confidential information, trade secrets and/or
confidential information in the nature of trade secrets of the Company and/or
its Affiliates (“Confidential Information”). The Grantee
acknowledges and represents that as of the time of execution of this
Non-Competition and Confidentiality Agreement the Grantee has not disclosed,
and
agrees that at any time thereafter the Grantee will not disclose, Confidential
Information, either directly or indirectly, to any third person or entity
without the prior written consent of the Company and/or its Affiliates, as
appropriate. This confidentiality covenant has no temporal,
geographical or territorial restriction. Except as otherwise
expressly agreed to by the Company or its Affiliates, as appropriate, on or
promptly following the date of termination of the Grantee’s employment with the
Company and its Affiliates, the Grantee will supply to the Company and/or its
Affiliates, as appropriate, all property, keys, mobile phones, computer
equipment, software data files, notes, memoranda, writings, lists, files,
reports, customer lists, correspondence, tapes, disks, cards, surveys, maps,
logs, machines, technical data or any other tangible product or document which
has been produced by, received by or otherwise submitted to the Grantee: (i) during his or her
employment with the Company and/or its Affiliates; and (ii) in the case of
a
Grantee who was employed by Avaya, Inc. (“Avaya”), during his or her employment
with Avaya (but only with respect to employment that related to the Connectivity
Solutions business that was acquired by the Company and its Affiliates pursuant
to the Asset Purchase Agreement by and among Avaya, the Company and CommScope
Solutions Holdings, LLC (formerly SS Holdings, LLC) dated October 23,
2003). Any such data or property (including copies thereof) stored on
computer, software data files or other equipment belonging to the Grantee (or
to
which the Grantee otherwise has lawful access after the date hereof) shall
be
deleted by the Grantee immediately following the termination of the Grantee’s
employment with the Company and its Affiliates.
5. Non-Disparagement. The
Grantee agrees not to make any written or oral statement which could disparage
the goods, products, services of, employees, officers, directors or reputation
of, the Company and its Affiliates.
6. Remedies. The
Grantee agrees that any breach of the terms of this Exhibit A would result
in
irreparable injury and damage to the Company and/or its Affiliates for which
the
Company and/or its Affiliates would have no adequate remedy at law; the Grantee
therefore also agrees that in the event of said breach or any threat of breach,
the Company and/or its Affiliates shall be entitled to an immediate injunction
and restraining order to prevent such breach and/or threatened breach and/or
continued breach by the Grantee and/or any and all persons and/or entities
acting for and/or with the Grantee, without having to prove damages, and to
all
costs and expenses, including reasonable attorneys’ fees and costs, in addition
to any other remedies to which the Company and/or its Affiliates may be entitled
at law or in equity. The terms of this paragraph shall not prevent
the Company and/or its Affiliates from pursuing any other available remedies
for
any breach or threatened breach hereof, including but not limited to the
recovery of damages from the Grantee. The Grantee further agrees that
the provisions of the covenant not to compete are reasonable. Should
a court or arbitrator determine, however, that any provision of the covenant
not
to compete is unreasonable, either in period of time, geographical area, or
otherwise, the parties hereto agree that the covenant should be interpreted
and
enforced to the maximum extent which such court or arbitrator deems
reasonable.
The
existence of any claim or cause of action by the Grantee against the Company
and/or its Affiliates shall not constitute a defense to the enforcement by
the
Company and/or its Affiliates of the covenants and agreements of this Exhibit
A.
7. Miscellaneous. This
Exhibit A sets forth the entire understanding of the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements, written or
oral, between them as to such subject matter, other than any confidentiality
agreement, any agreement dealing with the assignment to the Company of patents,
copyrights or other intellectual property or any other similar
agreements.