Exhibit 10.2
FORM OF
COMMSCOPE, INC.
1997 LONG-TERM INCENTIVE PLAN
EMPLOYEE PERFORMANCE UNIT AWARD AGREEMENT
(WITH RELATED DIVIDEND EQUIVALENT RIGHTS)
THIS AGREEMENT,
made as of the ____ day of _______, 2005 (the "Date of
Grant"), between CommScope, Inc., a
Delaware corporation (the "Company"),
and ____________ (the "Grantee").
WHEREAS, the
Company has adopted the Amended and Restated CommScope,
Inc. 1997 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 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 units (the
"Performance Units") and _____
dividend equivalent rights (the "Dividend
Equivalent Rights"), each
Performance Unit to be accompanied by one
(1) related Dividend Equivalent
Right. The Performance 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 Unit
represents the right to receive one (1)
share of Stock 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 of Stock represented by the
Performance 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
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
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.
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2.1 Except as provided in Sections 3 and 4 hereof, the
Performance 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
Units granted hereunder with respect to
which the Performance Goals will be
satisfied based on the ratio of Operating
Income to Revenue (the
"Performance Goals") for fiscal year 2006
(the "Performance Year"):
<TABLE>
<CAPTION>
------------------- ------------
------------ -------------- -------------- --------------
[LESS THAN]
[GREATER THAN]
MINIMUM MINIMUM
TARGET
MAXIMUM
MAXIMUM
------------------- ------------
------------ -------------- -------------- --------------
<S>
<C>
<C>
<C>
<C>
<C>
RATIO OF
OPERATING
[LESS THAN]
[GREATER THAN]
INCOME TO
__%
__%
__%
___%
___%
REVENUE
------------------- ------------
------------ -------------- -------------- --------------
PERCENT OF
__%
__%
___%*
___%
___%
PERFORMANCE
UNITS WITH
RESPECT TO WHICH
PERFORMANCE
GOALS ARE
SATISFIED
------------------- ------------
------------ -------------- -------------- --------------
<FN>
* The amount set forth in Section 1.1.
</FN>
</TABLE>
The percentage of Performance 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 Units
between 50% and 100% or between 100% and
150%, as applicable, depending on
the ratio of Operating Income to Revenue
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
2006, 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 resulting from the
extinguishment of long-term debt
determined by subtracting the realized
value of retiring the long-term debt
early from its booked value; (4) any gains
or losses on disposal of long
lived assets including property, plant and
equipment; (5) any restructuring
costs; (6) any gains or losses resulting
from reporting the final
disposition of the Adelphia accounts
receivable; and (7) any gains on
recovery of the OFS note. In addition,
adjustments shall be made with
respect to this determination to reflect
any change in accounting standards
(other than changes in accounting standards
resulting from the
implementation of FAS 123(R)) that affect
the calculation of Operating
Income (Loss) as reflected on the Company's
Consolidated Statements of
Operations for 2006.
For purposes of this Agreement, "Revenue" shall mean: "Net
Sales," as such item appears on the
Company's Consolidated Statements of
Operations for 2006.
The Award will terminate as to any and all Performance 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 the Grantee's employment
is
terminated by reason 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 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 Award
shall remain outstanding and the number of
Performance 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. In the event of a breach by the
Grantee of any of the
post-employment covenants described in
Exhibit A hereto, the Award shall
immediately be forfeited.
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 of
Control.
---------------------------
Notwithstanding anything contained in this Agreement to the
contrary, in the event of a Change of
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: (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 Units with respect t
