FORM OF
COMMSCOPE, INC.
2006 LONG TERM INCENTIVE
PLAN
EMPLOYEE PERFORMANCE SHARE UNIT
AWARD AGREEMENT
(WITH RELATED DIVIDEND EQUIVALENT
RIGHTS)
THIS AGREEMENT, made as of the ____ day of
________, 2009 (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 (3 rd )
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 2009
(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 2009, 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, and other business acquisition purchase accounting
adjustments; (3) any gains or losses on disposal of long lived
assets including property, plant and equipment; (4) any
restructuring costs; (5) amortization of purchased intangible
assets; and (6) any income or charges related to the litigation
with TruePosition, Inc. 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 2009.
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 (rounded to the nearest thousandth).
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
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