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Exhibit 10.2
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 _______, 2006 (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.
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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.
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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 ratio of Operating
Income
to Revenue (the "Performance Goals") for fiscal year 2007 (the
"Performance
Year"):
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
LESS THAN MINIMUM MINIMUM TARGET MAXIMUM GREATER THAN MAXIMUM
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RATIO OF LESS THAN 10% 10% 11.5% 13% GREATER THAN 13%
OPERATING INCOME
TO REVENUE
------------------------------------------------------------------------------------------------------------
0% 50% 100%* 150% 150%
PERCENT OF
PERFORMANCE SHARE
UNITS WITH
RESPECT TO WHICH
PERFORMANCE GOALS
ARE SATISFIED
------------------------------------------------------------------------------------------------------------
* The amount set forth in Section 1.1.
</TABLE>
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 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 2007, 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; 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 2007.
For purposes of this Agreement, "Revenue" shall mean: "Net
Sales," as such item appears on the Company's Consolidated
Statements of
Operations for 2007.
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.
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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 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 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 of Control.
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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
satisfact
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