FORM OF COMMSCOPE, INC. NONQUALIFIED STOCK OPTION AGREEMENT (ANNUAL)
Exhibit
10.1
FORM
OF
COMMSCOPE,
INC.
2006
LONG
TERM INCENTIVE PLAN
NONQUALIFIED
STOCK OPTION AGREEMENT (ANNUAL)
THIS
AGREEMENT, made as of
the __________ day of ________________, 2008 (the
“Grant Date”), 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
administration of the Plan has determined to grant an option to the Grantee
as
provided herein;
NOW,
THEREFORE, the parties hereto
agree as follows:
1. Grant
of Option.
1.1 The
Company hereby grants to the Grantee the right and option (the “Option”) to
purchase all or any part of an aggregate of
whole Shares subject to, and in accordance
with, the terms and conditions set forth in this Agreement.
1.2 The
Option is not intended to qualify as an Incentive Stock Option.
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 incorporated herein
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. Purchase
Price.
The
price at which the Grantee shall
be entitled to purchase Shares upon the exercise of the Option shall be
$__________ per Share.
3. Duration
of Option.
The
Option shall be exercisable to
the extent and in the manner provided herein for a period of ten (10) years
from
the Grant Date (the “Exercise Term”); provided, however, that the
Option may be earlier terminated as provided in Section 6
hereof.
4. Vesting
and Exercisability of Option.
Unless
otherwise provided in this
Agreement or the Plan, the Option shall entitle the Grantee to purchase, in
whole at any time or in part from time to time, thirty-three and one-third
percent (33-1/3%) of the total number of Shares covered by the Option after
the
expiration of one (1) year from the Grant Date, an additional thirty-three
and
one-third percent (33-1/3%) of the total number of Shares covered by the Option
after the second anniversary of the Grant Date, and the remainder of the number
of Shares subject to the Option after the third anniversary of the Grant Date,
and each such right of purchase shall be cumulative and shall continue, unless
sooner exercised as herein provided, during the remaining period of the Exercise
Term. Any fractional number of Shares resulting from the application
of the percentages set forth in this Section 4 shall be rounded to the next
higher whole number of Shares.
5. Manner
of Exercise and Payment.
5.1 Subject
to the terms and conditions of this Agreement and the Plan, the Option may
be
exercised by delivery of written notice to the Company, at its principal
executive office. Such notice shall state that the Grantee is
electing to exercise the Option and the number of Shares in respect of which
the
Option is being exercised and shall be signed by the person or persons
exercising the Option. If requested by the Committee, such person or
persons shall (i) deliver this Agreement to the Secretary of the Company who
shall endorse on this Agreement a notation of such exercise and (ii) provide
satisfactory proof as to the right of such person or persons to exercise the
Option.
5.2 The
notice of exercise described in Section 5.1 shall be accompanied by the full
purchase price for the Shares in respect of which the Option is being exercised,
in cash or by check or, if indicated in the notice, such payment shall follow
by
check from a registered broker acting as agent on behalf of the
Grantee. However, at the discretion of the Committee appointed to
administer the Plan, the Grantee may pay the exercise price in part or in full
by transferring to the Company unrestricted Shares owned by the Grantee prior
to
the exercise of the Option having a Fair Market Value on the day preceding
the
date of exercise equal to the cash amount for which such shares are
substituted. “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.
5.3 Upon
receipt of notice of exercise and full payment for the Shares in respect of
which the Option is being exercised, the Company shall, subject to this
Agreement and the Plan, take such action as may be necessary to effect the
transfer to the Grantee of the number of Shares as to which such exercise was
effective.
5.4 The
Grantee shall not be deemed to be the holder of, or to have any of the rights
of
a holder with respect to any Shares subject to the Option until (i) the Option
shall have been exercised pursuant to the terms of this Agreement and the
Grantee shall have paid the full purchase price for the number of Shares in
respect of which the Option was exercised, (ii) the Company shall have issued
and delivered the Shares to the Grantee, and (iii) the Grantee’s name shall have
been entered as a stockholder of record on the books of the Company, whereupon
the Grantee shall have full voting and other ownership rights with respect
to
such Shares.
6. Termination
of Employment.
6.1 Death
or Disability. In the event the Grantee’s employment is
terminated by reason of the Grantee’s death or Disability, any portion of the
Option that is not yet vested and exercisable on the Termination Date (as
defined below) shall become immediately vested and fully exercisable on such
date, and the entire Option shall remain exercisable for a period of five (5)
years following the Termination Date by the Grantee or by the Grantee’s legatee
or legatees under his will, or by his personal representatives or distributees,
as applicable. For purposes of this Agreement, “Termination Date”
shall mean the last day on which the Grantee works for the Company, a Subsidiary
or a Division.
6.2 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
as a result of the Grantee’s voluntary retirement after attainment of age 55, or
(ii) the Grantee’s employment is terminated as a result of the Grantee’s
voluntary retirement after attainment of age 65, the “Pro Rata
Portion” (as defined below) of that portion of the Option that would have become
vested and exercisable on the anniversary of the Grant Date immediately
following the Termination Date shall remain outstanding and shall be eligible
to
vest on such anniversary date if the Grantee complies with the post-employment
covenants described in Appendix A attached hereto. In the event of a
breach by the Grantee of the post-employment covenants described in Appendix
A,
the Option shall immediately be forfeited. The portion of the Option
that was previously vested and the portion of the Option that vests pursuant
to
this Section 6.2 shall, once vested, remain exercisable for a period of five
(5)
years following the Termination Date, by the Grantee or by the Grantee’s legatee
or legatees under his will, or by his personal representatives or distributees,
as applicable. The “Pro Rata Portion” shall mean a fraction the
numerator of which is the number of whole calendar months between (A) the later
of the Grant Date or the anniversary of the Grant Date immediately preceding
the
Termination Date and (B) the Termination Date, and the denominator of which
is
12.
6.3 Cause. In
the event the Grantee’s employment is terminated for Cause, the Option shall
immediately expire in its entirety whether or not vested and
exercisable. 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).
6.4 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) under any circumstance other than those set
forth in Section 6.1, Section 6.2 and Section 6.3, any portion of the Option
that is not vested and exercisable on the Termination Date shall expire and
the
Grantee may, at any time within thirty (30) days after the Termination Date,
exercise the Option to the extent, but only to the extent, that the Option
or
portion thereof was vested and exercisable on the Termination Date.
6.5 No
Extension of Exercise Term. Notwithstanding the terms of Section
6.1, 6.2 and 6.4 and except as provided in this Section 6.5, in no event may
the
Option be exercised by anyone after the expiration of the Exercise
Term. An Option that becomes vested as a result of a Grantee’s death
may be exercised for up to five (5) years following the date of the Grantee’s
death but only one (1) of such years may extend beyond expiration of the
Exercise Term.
7. Effect
of Change in Control.
Notwithstanding
anything contained in
this Agreement to the contrary, in the event of a Change in Control the Option
shall become immediately vested and fully exercisable.
8. Non-transferability.
The
Option shall not be assignable or
transferable other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order (within the meaning of Rule
16a-12 promulgated under the Exchange Act). During the lifetime of
the Grantee, the Option shall be exercisable only by the Grantee, his or her
legal guardian or legal representatives or a bankruptcy
trustee. Notwithstanding the foregoing and unless prohibited by
applicable law, the Option may be transferred to members of the Grantee’s
immediate family, to trusts solely for the benefit of such immediate family
members and to partnerships in which such family members and/or trusts are
the
only partners, and for purposes of this Agreement and the Plan, a transferee
of
an Option shall be deemed to be the Grantee. For this purpose,
immediate family means the Grantee’s spouse, parents, children, stepchildren and
grandchildren and the spouses of such parents, children, stepchildren and
grandchildren. Notwithstanding anything to the contrary contained
herein, the Option may not be exercised by or 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 or exercise.
9. 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.
10. Adjustments.
In
the event of a Change in
Capitalization, the Committee shall make equitable adjustments to the number
and
class of Shares or other securities subject to the Option and the purchase
price
for such Shares or other securities. The Committee’s adjustment shall
be made in accordance with the provisions of Article 13 of the Plan
and shall be final, binding and conclusive for all purposes of the Plan and
this Agreement.
11. Effect
of Certain Transactions.
Subject
to Section 7 hereof, upon the
effective date of the liquidation, dissolution, merger or consolidation of
the
Company (in each case, a “Transaction”), the Option shall continue in
effect in accordance with its terms, except that following a Transaction either
(a) the Option shall be treated as provided for in the plan or agreement entered
into in connection with the Transaction (the “Transaction Agreement”) or (b) if
not so provided in the Transaction Agreement, the Grantee shall be entitled
to
receive in respect of all Shares subject to the Option, upon exercise of the
Option, the same number and kind of stock, securities, cash, property or other
consideration that each holder of Shares was entitled to receive in the
Transaction.
12. Withholding
of Taxes.
The
Company shall have the right to
deduct from any distribution of cash to any Grantee, an amount equal to the
federal, state and local income taxes and other amounts as may be required
by
law to be withheld (the “Withholding Taxes”) with respect to the
Option. If a Grantee is entitled to receive Shares upon exercise of
the Option, the Grantee shall pay the Withholding Taxes to the Company prior
to
the issuance of such Shares.
Payment
of the applicable Withholding
Taxes may be made in any one or any combination of: (i) cash, (ii) unrestricted
Shares owned by the Grantee prior to the exercise of the Option and valued
at
its Fair Market Value on the business day immediately preceding the date of
exercise, or (iii) by making a Tax Election (as described below). For
purposes of this Article 12, a Grantee may make a written election (the “Tax
Election”), which may be accepted or rejected at the discretion of the
Committee, to have withheld a portion of the Shares issuable to him or her
upon
exercise of the Option and valued at its Fair Market Value on the date preceding
the date of exercise, equal to the Withholding Taxes.
13. 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.
14. 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. No
waiver by either party hereto of any breach by the other party hereto of any
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions at the time or at any prior or
subsequent time.
15. 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.
16. 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.
17. 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 final, binding
and
conclusive upon the Grantee’s beneficiaries, heirs, executors, administrators
and successors.
18. 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 and the Company for all
purposes.
19. 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.
| COMMSCOPE, INC. | |||||
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Date:
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By:
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| Print Name: | |||||
| Title : | |||||
| GRANTEE | |||||
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Date:
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By:
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| Print Name: | |||||
Appendix
A
Non-Competition
and Confidentiality Covenants
By
execution of the stock option agreement to which this Appendix A is attached
(the “Stock Option 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 6.2 of the Stock Option
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 (and
any copies, in whatever medium, thereof) 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 Appendix 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 Appendix A.
7. Miscellaneous. This
Appendix 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.
