Exhibit 10.3
FORM OF
COMMSCOPE, INC.
1997 LONG-TERM INCENTIVE PLAN
EMPLOYEE PHANTOM STOCK 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 phantom stock 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 ___ shares of phantom stock (the "Phantom Stock") and ____
dividend equivalent rights (the "Dividend Equivalent Rights"), each share
of Phantom Stock to be accompanied by one (1) related Dividend Equivalent
Right. The Phantom Stock 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 share of Phantom Stock
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 Phantom Stock 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 Phantom Stock, without limitation, the
forfeiture and vesting provisions contained in Sections 2 through 4,
inclusive, of this Agreement. In the event that a share of Phantom Stock 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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Except as provided in Sections 3 and 4 hereof, 100% of the shares
of Phantom Stock granted hereunder 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.
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 prior to the
Vesting Date, 100% of the Award 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 shall be eligible to vest on the Vesting Date
if 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.
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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, at any time prior to the Vesting Date
the Award shall become immediately vested.
5. Non-transferability.
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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.
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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.
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On the Vesting Date, or as soon thereafter as administratively
practicable (but in no event later than 2 1/2 months after the calendar
year in which the Vesting Date occurs), the Company shall issue shares of
Stock to the Grantee (or, if applicable, the Grantee's estate) with respect
to Phantom Stock that becomes vested on the Vesting Date. Shares with
respect to Phantom Stock that becomes vested pursuant to Section 3.1 or
Section 4 shall be issued upon the date such Phantom Stock becomes vested,
or as soon thereafter as administratively practicable (but in no event
later than 2 1/2 months after the calendar year in which the Phantom Stock
becomes vested); provided, however, that if the Grantee is a "specified
employee" within the meaning of Section 409A of the Code as of the date of
the Grantee's termination of employment, any Shares with respect to Phantom
Stock which have become vested pursuant to Section 3.1 due to the
termination of the Grantee's employment as a result of the Grantee's
Disability (other than a Disability which constitutes a disability within
the meaning of Section 409A of the Code) shall be issued as soon as
administratively practicable after the first day of the calendar month
following the date which is six (6) months after the date of the Grantee's
termination of employment.
8. Withholding of Taxes.
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Prior to the delivery to the Grantee (or the Grantee's estate, if
applicable) of shares of Stock 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 of Stock. 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) shares of restricted or unrestricted Stock
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 units or shares of Stock
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 of Stock 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.
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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.
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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.
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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.
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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.
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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.
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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.
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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]
COMMSCOPE, INC.
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
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By execution of the phantom stock agreement to which this Exhibit
A is attached (the "Phantom Stock 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 Phantom Stock 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 and warrants 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 duly transferred to the Company.
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 hereof, 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 execution of this
Non-Competition and Confidentiality Agreement.
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.
