AMENDED AND RESTATED SEVERANCE PROTECTION AGREEMENT
AMENDED AND
RESTATED
THIS AGREEMENT (the “Agreement”) made as
of the ____ day of ___________, 2008, by and between CommScope, Inc. (the “Corporation”), and
________________ (the “Executive”).
WHEREAS, the Board of Directors of
the Corporation (the “Board”) recognizes
that the possibility of a Change in Control (as hereinafter defined) exists and
that the threat or the occurrence of a Change in Control can result in
significant distraction of the Corporation’s key management personnel because of
the uncertainties inherent in such a situation;
WHEREAS, the Board has determined
that it is essential and in the best interest of the Corporation and its
stockholders for the Corporation to retain the services of the Executive in the
event of a threat or occurrence of a Change in Control and to ensure the
Executive’s continued dedication and efforts in such event without undue concern
for the Executive’s personal financial and employment security;
WHEREAS, in order to induce the
Executive to remain in the employ of the Corporation, particularly in the event
of a threat or the occurrence of a Change in Control, the Corporation desires to
enter into this Agreement with the Executive to provide the Executive with
certain benefits in the event the Executive’s employment is terminated under
circumstances described herein;
WHEREAS, the Executive and the
Corporation are parties to a prior Severance Protection Agreement (the “Original Agreement”);
and
WHEREAS, the Executive and the
Corporation desire to amend and restate the Original Agreement to comply with
Section 409A of the Internal Revenue Code and the regulations and other
interpretive guidance issued thereunder, and to make certain other changes to
the Original Agreement.
NOW, THEREFORE, in consideration of
the respective agreements of the parties contained herein, it is agreed as
follows:
1. Term of Agreement. This
Agreement shall commence as of ___________, 2008 (the “Effective Date”) and
shall continue in effect until December 31, 2011 (the “Term”); provided, however, that on
January 1, 2010, and on each January 1 thereafter, the Term shall
automatically be extended for one (1) year unless either the Executive or the
Corporation shall have given written notice to the other at least ninety (90)
days prior thereto that the Term shall not be so extended; provided, further, however,
that following the occurrence of a Change in Control, the Term shall not
expire prior to the expiration of twenty-four (24) months after such
occurrence.
2. Termination of Employment. If,
during the Term, the Executive’s employment with the Corporation and its
Affiliates shall be terminated within twenty-four (24) months following a Change
in Control, the Executive shall be entitled to the following compensation and
benefits:
(a) If
the Executive’s employment with the Corporation and its Affiliates shall be
terminated (x) by the Corporation for Cause or Disability, (y) by reason of the
Executive’s death, or (z) by the Executive other than for Good Reason, the
Corporation shall pay to the Executive the following:
(1) his
Accrued Compensation;
(2) any
bonus or incentive compensation that has been earned but not paid prior to the
Termination Date;
(3) in
addition to the amounts described in Sections 2(a)(1) and (2), if the
Executive’s employment is terminated by the Corporation for Disability, the
Corporation shall pay to the Executive a Pro Rata Bonus; and
(4) in
addition to the amounts described in Sections 2(a)(1) and (2), if the
Executive’s employment is terminated by reason of the Executive’s death, the
Corporation shall pay to the Executive’s beneficiaries a Pro Rata
Bonus.
The
Executive’s entitlement to any other compensation or benefits shall be
determined in accordance with the Corporation’s employee benefits plans and
other applicable programs and practices then in effect.
(b) If
the Executive’s employment with the Corporation and its Affiliates shall be
terminated for any reason other than as specified in Section 2(a), the Executive
shall be entitled to the following:
(1) the
Corporation shall pay the Executive all Accrued Compensation;
(2) the
Corporation shall pay the Executive a Pro Rata Bonus and any bonus or incentive
compensation that has been earned but not paid prior to the Termination
Date;
(3) the
Corporation shall pay the Executive as severance pay and in lieu of any further
compensation for periods subsequent to the Termination Date, an amount equal to
[two (2)] [one and one-half (1 and 1/2)] times the sum of (A) the Executive’s
Base Amount and (B) the Executive’s Bonus Amount;
(4) for
[twenty-four (24)] [eighteen (18)] months after such termination (the “Continuation
Period”), the Corporation shall at its expense continue on behalf of the
Executive and his dependents and beneficiaries the life insurance, disability,
medical, dental and hospitalization coverages and benefits provided to the
Executive immediately prior to the Change in Control or, if greater, the
coverages and benefits provided at any time thereafter. The coverages
and benefits (including deductibles and costs) provided in this
Section 2(b)(4) during the Continuation Period shall be no less favorable
to the Executive and his dependents and beneficiaries, than the most favorable
of such coverages and benefits referred to above. The Corporation’s
obligation hereunder with respect to the foregoing coverages and benefits shall
be reduced to the extent that the Executive obtains any such coverages and
benefits pursuant to a subsequent employer’s benefit plans, in which case the
Corporation may reduce any of the coverages or benefits it is required to
provide the Executive hereunder so long as the aggregate coverages and benefits
of the combined benefit plans is no less favorable to the Executive than the
coverages and benefits required to be provided hereunder. This
Section 2(b)(4) shall not be interpreted so as to limit any benefits to
which the Executive, his dependents or beneficiaries may be entitled under any
of the Corporation’s employee benefit plans, programs or practices following the
Executive’s termination of employment, including without limitation, retiree
medical and life insurance benefits;
(5) If,
at the end of the Continuation Period, the Executive is not employed by another
employer (including self-employment), the Executive will receive for up to six
(6) months, an amount equal to one-twelfth (1/12) of the sum of (A) the
Executive’s Base Amount and (B) the Executive’s Bonus Amount, payable at the end
of each of the six (6) calendar months following the end of the Continuation
Period; provided
however, that such payments will immediately cease upon the Executive’s
employment (including self-employment) by a subsequent employer. In
addition, the coverages and benefits described in Section 2(b)(4) shall be
continued until the earlier of (x) six (6) months after the end of the
Continuation Period or (y) such time that the Executive obtains any such
coverages or benefits pursuant to a subsequent employer’s benefit
plans;
(6) the
Corporation shall pay or reimburse the Executive for the costs, fees and
expenses of outplacement assistance services (not to exceed twenty-five (25%) of
the sum of (A) the Executive’s Base Amount and (B) the Executive’s Bonus Amount)
provided by any outplacement agency selected by the Executive;
(7) the
Corporation shall pay or reimburse the Executive up to $2,000 for tax and
financial planning services in respect of the calendar year in which the
payments provided for in Section 2(b)(3) are paid to the Executive;
and
(8) the
Corporation shall pay or reimburse the Executive for the cost of relocation (in
accordance with the Corporation’s relocation policy) to the Executive’s place of
residence immediately prior to any relocation the Executive made for purposes of
employment by the Corporation after July 1, 1995.
(c)
If the
Executive’s employment is terminated by the Corporation other than for Cause at
any time prior to the date of a Change in Control and such termination (A)
occurred after the Corporation entered into a definitive agreement, the
consummation of which would constitute a Change in Control or (B) the Executive
reasonably demonstrates that such termination was at the request of a third
party who has indicated an intention or has taken steps reasonably calculated to
effect a Change in Control (a “Third Party”), such
termination shall be deemed to have occurred after a Change in
Control.
(d) (1) Gross-Up
Payment. In the event that it shall be determined that any
payment (other than the payment provided for in this Section 2(d)) or
distribution of any type to or for the benefit of the Executive, by the
Corporation, any Affiliate of the Corporation, any Person who acquires ownership
or effective control of the Corporation or ownership of a substantial portion of
the Corporation’s assets (within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”), and the
regulations thereunder) or any Affiliate of such Person, whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement or
otherwise (the “Total
Payments”), is or will be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
collectively referred to as the “Excise Tax”), then
the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in
an amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any income
tax, employment tax or Excise Tax, imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Total Payments.
(2) Determination By
Accountant. All mathematical determinations, and all
determinations as to whether any of the Total Payments are “parachute payments”
(within the meaning of Section 280G of the Code), that are required to be
made under this Section 2(d), including determinations as to whether a
Gross-Up Payment is required, the amount of such Gross-Up Payment and amounts
relevant to the last sentence of this Section 2(d)(2), shall be made by an
independent accounting firm selected by the Executive from among the six (6)
largest accounting firms in the United States (the “Accounting Firm”),
which shall provide its determination (the “Determination”),
together with detailed supporting calculations regarding the amount of any
Gross-Up Payment and any other relevant matter, both to the Corporation and the
Executive by no later than ten (10) days following the Termination Date, if
applicable, or such earlier time as is requested by the Corporation or the
Executive (if the Executive reasonably believes that any of the Total Payments
may be subject to the Excise Tax). If the Accounting Firm determines
that no Excise Tax is payable by the Executive, it shall furnish the Executive
and the Corporation with an opinion reasonably acceptable to the Executive and
the Corporation that no Excise Tax is payable (including the reasons therefor)
and that the Executive has substantial authority not to report any Excise Tax on
his federal income tax return. If a Gross-Up Payment is determined to
be payable, it shall be paid to the Executive within twenty (20) days after the
Determination (and all accompanying calculations and other material supporting
the Determination) is delivered to the Corporation by the Accounting
Firm. Any determination by the Accounting Firm shall be binding upon
the Corporation and the Executive, absent manifest error. As a result
of uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments not made by the Corporation should have been made (“Underpayment”), or
that Gross-Up Payments will have been made by the Corporation which should not
have been made (“Overpayments”). In
either such event, the Accounting Firm shall determine the amount of the
Underpayment or Overpayment that has occurred. In the case of an
Underpayment, the amount of such Underpayment (together with any interest and
penalties payable by the Executive as a result of such Underpayment) shall be
promptly paid by the Corporation to or for the benefit of the
Executive. In the case of an Overpayment, the Executive shall, at the
direction and expense of the Corporation, take such steps as are reasonably
necessary (including the filing of returns and claims for refund), follow
reasonable instructions from, and procedures established by, the Corporation,
and otherwise reasonably cooperate with the Corporation to correct such
Overpayment, provided,
however, that (i) the
Executive shall not in any event be obligated to return to the Corporation an
amount greater than the net after-tax portion of the Overpayment that he has
retained or has recovered as a refund from the applicable taxing authorities and
(ii) this provision shall be interpreted in a manner consistent with the intent
of Section 2(d)(1), which is to make the Executive whole, on an after-tax basis,
from the application of the Excise Tax, it being understood that the correction
of an Overpayment may result in the Executive repaying to the Corporation an
amount which is less than the Overpayment. The fees and expenses of the
Accounting Firm shall be paid by the Corporation.
(3) Any
Gross-Up Payment shall be paid no later than the last day of the Executive’s
taxable year next following the Executive’s taxable year in which the taxes
imposed in respect of which the Gross-Up Payment is being made are remitted to
the applicable taxing authority.
(e) Subject
to Section 2(i), the amounts provided for in Sections 2(a) and 2(b)(1), (2)
and (3) shall be paid in a single lump sum cash payment within ten (10) days
after the Executive’s Termination Date (or earlier, if required by applicable
law).
(f) The
Executive shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise and no such
payment shall be offset or reduced by the amount of any compensation or benefits
provided to the Executive in any subsequent employment except as provided in
Sections 2(b)(4) and 2(b)(5).
(g) The
severance pay and benefits provided for in this Section 2 shall be in lieu of
any other severance pay to which the Executive may be entitled under any
severance plan or any other plan, agreement or arrangement of the Corporation or
any of its Affiliates.
(h) To
the extent that any benefits to be provided to the Executive pursuant to
Sections 2(b)(4), (5), (6), (7) and (8) of this Agreement are considered
nonqualified deferred compensation and are reimbursements subject to Treasury
Regulation Section 1.409A-3(i)(1)(iv), then, notwithstanding to the
contrary contained herein, (1) the reimbursement of eligible expenses related to
such benefits shall be made on or before the last day of the Executive’s taxable
year following the Executive’s taxable year in which the expense was incurred
and (2) the provision of such benefits (including reimbursements therefor)
during any taxable year of the Executive shall not be increased or decreased to
reflect the amount of benefits provided in a prior or subsequent taxable year of
the
Executive.
(i) Certain Delayed
Payments. (1) Notwithstanding anything to the contrary
contained herein, if the Executive is a “specified employee” for purposes of
Section 409A of the Code and regulations and other interpretive guidance issued
thereunder (“Section
409A”), any payments required to be made pursuant to Sections 2(a)(2),
(3) or (4), or pursuant to Sections 2(b)(2), (3) or (5), shall not
commence until one day after the day which is six (6) months after the
Executive’s Termination Date (the “Delay Period”), with
the first payment equaling the total of all payment that would have been paid
during the Delay Period but for the application of Section 409A to such
payments.
(2) To the
extent that benefits to be provided to the Executive pursuant to Sections
2(b)(4), (5), (6), (7), (8) and Section 4 of this Agreement are not (A)
“disability pay,” “death benefit” plans or non-taxable medical benefits within
the meaning of Treasury Regulation Section 1.409A-1(a)(5) or (B) other benefits
not considered nonqualified deferred compensation under that regulation or
Treasury Regulation Section 1.409A-1(b)(9)(v), such provision of benefits shall
be delayed until the end of the Delay Period, unless the Executive’s termination
occurs by reason of the Executive’s death. Notwithstanding the
foregoing, to the extent that the previous sentence applies to the provision of
any ongoing benefits that would not be required to be delayed if the premiums or
costs thereof were paid by the Executive, the Executive shall pay the full
premium or cost for such benefits during the Delay Period. The
Corporation shall pay the Executive an amount equal to the amount of such
premiums and costs paid by the Executive during the Delay Period within ten (10)
days after the end of the Delay Period.
(3)
To the extent that any benefits to be provided to the Executive pursuant to
Sections 2(b)(4), (5), (6), (7) and (8), Section 4 or any other section of this
Agreement are considered nonqualified deferred compensation and are
reimbursements subject to Treasury Regulation Section 1.409A-3(i)(1)(iv), then
(i) the reimbursement of eligible expenses related to such benefits shall be
made on or before the last day of the Executive’s taxable year following the
Executive’s taxable year in which the expense was incurred and (ii)
notwithstanding anything to the contrary in this Agreement or any plan providing
for such benefits, the amount of expenses eligible for reimbursement during any
taxable year of the Executive shall not affect the expenses eligible for
reimbursement in any other taxable year.
3. Notice of Termination. Following
a Change in Control, any intended termination of the Executive’s employment by
the Corporation shall be communicated by a Notice of Termination from the
Corporation to the Executive, and any intended termination of the Executive’s
employment by the Executive for Good Reason shall be communicated by a Notice of
Termination from the Executive to the Corporation.
4. Fees and
Expenses. The Corporation shall
pay all legal fees and related expenses (including the costs of experts,
evidence and counsel) incurred by the Executive within the six (6) year period
following the date of the Executive’s termination of employment as they become
due as a result of (a) the termination of the Executive’s employment by the
Corporation or by the Executive for Good Reason (including all such fees and
expenses, if any, incurred in contesting, defending or disputing the basis for
any such termination of employment), (b) the Executive’s hearing before the
Board as contemplated in Section 13.6 of this Agreement or (c) the
Executive seeking to obtain or enforce any right or benefit provided by this
Agreement or by any other plan or arrangement maintained by the Corporation
under which the Executive is or may be entitled to receive
benefits.
5. Notice. For
the purposes of this Agreement, notices and all other communications provided
for in the Agreement (including any Notice of Termination) shall be in writing,
shall be signed by the Executive if to the Corporation or by a duly authorized
officer of the Corporation if to the Executive, and shall be deemed to have been
duly given when personally delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed to the respective addresses last given by
each party to the other, provided that all notices to the Corporation shall be
directed to the attention of the Board with a copy to the Secretary of the
Corporation. All notices and communications shall be deemed to have
been received on the date of delivery thereof or on the third business day after
the mailing thereof, except that notice of change of address shall be effective
only upon receipt.
6. Nature of Rights. Except
as provided in Section 2(g), nothing in this Agreement shall prevent or limit
the Executive’s continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Corporation or any Affiliate
of the Corporation and for which the Executive may qualify, nor shall anything
herein limit or reduce such rights as the Executive may have under any other
agreements with the Corporation or any Affiliate of the
Corporation. Amounts which are vested benefits or which the Executive
is otherwise entitled to receive under any plan or program of the Corporation or
any Affiliate of the Corporation shall be payable in accordance with such plan
or program, except as explicitly modified by this Agreement.
7. Settlement of Claims. The
Corporation’s obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim,
defense, recoupment, or other right which the Corporation may have against the
Executive or others.
8. Miscellaneous. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and the Corporation. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by any party which are not expressly set
forth in this Agreement.
9. Successors; Binding Agreement.
(a) This
Agreement shall be binding upon and shall inure to the benefit of the
Corporation and its respective Successors and Assigns. The
Corporation shall require its respective Successors and Assigns to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform it if no such
succession or assignment had taken place.
(b) Neither
this Agreement nor any right or interest hereunder shall be assignable or
transferable by the Executive, his beneficiaries or legal representatives,
except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
legal personal representative.
10. Governing Law. This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of North Carolina without giving effect to the conflict of
laws principles thereof. Any action brought by any party to this
Agreement shall be brought and maintained in a court of competent jurisdiction
in the State of North Carolina.
11. Severability. The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
12. Entire Agreement. This
Agreement constitutes the entire agreement between the parties hereto, and
supersedes all prior agreements, including, without limitation, the Original
Agreement, and all understandings and arrangements, oral or written, between the
parties hereto, with respect to the subject matter hereof.
13. Definitions.
13.1. Accrued Compensation. For
purposes of this Agreement, “Accrued Compensation” shall mean all amounts of
compensation for services rendered to the Corporation or any of its Affiliates
that have been earned or accrued through the Termination Date but that have not
been paid as of the Termination Date including (a) base salary, (b)
reimbursement for reasonable and necessary business expenses incurred by the
Executive on behalf of the Corporation or of its Affiliates of the Corporation
during the period ending on the Termination Date and (c) vacation pay; provided, however, that
Accrued Compensation shall not include any amounts described in clause (a) that
have been deferred pursuant to any salary reduction or deferred compensation
elections made by the Executive.
13.2. Affiliate. For
purposes of this Agreement, “Affiliate” means, with respect to any Person, any
entity, directly or indirectly, controlled by, controlling or under common
control with such Person.
13.3. Base Amount. For
purposes of this Agreement, “Base Amount” shall mean the Executive’s annual base
salary at the rate in effect as of the date of a Change in Control or, if
greater, at any time thereafter, determined without regard to any salary
reduction or deferred compensation elections made by the Executive.
13.4. “Beneficial Owner,”
“Beneficially
Owned,” “Beneficial Ownership”
and “Beneficially
Owning” shall have the meanings applicable under Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended.
13.5. Bonus
Amount. For purposes of this Agreement, “Bonus Amount” shall
mean the target annual bonus payable to the Executive under the Incentive Plan
in respect of the fiscal year of the Corporation immediately prior to that in
which the Termination Date occurs.
13.6. Cause. For
purposes of this Agreement, a termination of employment is for “Cause” if the
Executive has been convicted of a felony or the termination is evidenced by a
resolution adopted in good faith by two-thirds of the Board that the
Executive:
(a) intentionally
and continually failed substantially to perform his reasonably assigned duties
with the Corporation and its Affiliates (other than a failure resulting from the
Executive’s incapacity due to physical or mental illness or from the assignment
to the Executive of duties that would constitute Good Reason) which failure
continued for a period of at least thirty (30) days after a written notice of
demand for substantial performance, signed by a duly authorized officer of the
Corporation, has been delivered to the Executive specifying the manner in which
the Executive has failed substantially to perform, or
(b) intentionally
engaged in conduct which is demonstrably and materially injurious to the
Corporation and its Affiliates; provided, however, that no
termination of the Executive’s employment shall be for Cause as set forth in
this Section 13.6(b) until (1) there shall have been delivered to the
Executive a copy of a written notice, signed by a duly authorized officer of the
Corporation, setting forth that the Executive was guilty of the conduct set
forth in this Section 13.6(b) and specifying the particulars thereof in
detail, and (2) the Executive shall have been provided an opportunity to be
heard in person by the Board (with the assistance of the Executive’s counsel if
the Executive so desires).
No act, nor failure to act, on the
Executive’s part, shall be considered “intentional” unless the Executive has
acted, or failed to act, with a lack of good faith and with a lack of reasonable
belief that the Executive’s action or failure to act was in the best interest of
the Corporation and its Affiliates. Notwithstanding anything
contained in this Agreement to the contrary, no failure to perform by the
Executive after a Notice of Termination is given to the Corporation by the
Executive shall constitute Cause for purposes of this Agreement.
13.7. Change in
Control. “Change in Control” shall mean any of the
following:
(a) an
acquisition (other than directly from the Corporation) of any Voting Securities
by any Person, immediately after which such Person has Beneficial Ownership of
more than thirty-three percent (33%) of (i) the then-outstanding Shares or (ii)
the combined voting power of the Corporation’s then-outstanding Voting
Securities; provided,
however, that in determining whether a Change in Control has occurred
pursuant to this paragraph (a), the acquisition of Shares or Voting Securities
in a Non-Control Acquisition (as hereinafter defined) shall not constitute a
Change in Control. A “Non-Control
Acquisition” shall mean an acquisition by (i) an employee benefit plan
(or a trust forming a part thereof) maintained by (A) the Corporation or (B) any
corporation or other Person the majority of the voting power, voting equity
securities or equity interest of which is owned, directly or indirectly, by the
Corporation (for purposes of this definition, a “Related Entity”),
(ii) the Corporation or any Related Entity, or (iii) any Person in connection
with a Non-Control Transaction (as hereinafter defined);
(b) the
individuals who, as of the Effective Date, are members of the Board (the “Incumbent Board”),
cease for any reason to constitute at least two-thirds of the members of the
Board or, following a Merger (as hereinafter defined), the board of directors of
(i) the corporation resulting from such Merger (the “Surviving
Corporation”), if fifty percent (50%) or more of the combined voting
power of the then-outstanding voting securities of the Surviving Corporation is
not Beneficially Owned, directly or indirectly, by another Person (a “Parent Corporation”)
or (ii) if there is one or more than one Parent Corporation, the ultimate
Parent Corporation; provided,
however, that, if the election, or nomination for election by the
Corporation’s common shareholders, of any new director was approved by a vote of
at least two-thirds of the Incumbent Board, such new director shall, for
purposes of this Agreement, be considered a member of the Incumbent Board; and
provided, further,
however, that no individual shall be considered a member of the Incumbent
Board if such individual initially assumed office as a result of an actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board (a “Proxy Contest”),
including by reason of any agreement intended to avoid or settle any Proxy
Contest; or
(c) the
consummation of:
(1) a
merger, consolidation or reorganization (x) with or into the Corporation or
(y) in which securities of the Corporation are issued (a “Merger”), unless such
Merger is a “Non-Control Transaction.” A “Non-Control
Transaction” shall mean a Merger in which:
(A) the
shareholders of the Corporation immediately before such Merger own directly or
indirectly immediately following such Merger at least a majority of the combined
voting power of the outstanding voting securities of (1) the Surviving
Corporation, if there is no Parent Corporation or (2) if there is one or more
than one Parent Corporation, the ultimate Parent Corporation;
(B) the
individuals who were members of the Incumbent Board immediately prior to the
execution of the agreement providing for such Merger constitute at least a
majority of the members of the board of directors of (1) the Surviving
Corporation, if there is no Parent Corporation, or (2) if there is one or more
than one Parent Corporation, the ultimate Parent Corporation; and
(C) no
Person other than (1) the Corporation or another corporation that is a party to
the agreement of Merger, (2) any Related Entity, or (3) any employee
benefit plan (or any trust forming a part thereof) that, immediately prior to
the Merger, was maintained by the Corporation or any Related Entity, or (4) any
Person who, immediately prior to the Merger had Beneficial Ownership of
thirty-three percent (33%) or more of the
then outstanding Shares or Voting Securities, has Beneficial Ownership, directly
or indirectly, of thirty-three percent (33%) or more of the combined voting
power of the outstanding voting securities or common stock of (x) the Surviving
Corporation, if there is no Parent Corporation, or (y) if there is one or more
than one Parent Corporation, the ultimate Parent Corporation.
(2) a
complete liquidation or dissolution of the Corporation; or
(3) the
sale or other disposition of all or substantially all of the assets of the
Corporation and its Subsidiaries taken as a whole to any Person (other than (x)
a transfer to a Related Entity or (y) the distribution to the Corporation’s
shareholders of the stock of a Related Entity or any other assets).
Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
any Person (the “Subject Person”)
acquired Beneficial Ownership of more than the permitted amount of the then
outstanding Shares or Voting Securities as a result of the acquisition of Shares
or Voting Securities by the Corporation which, by reducing the number of Shares
or Voting Securities then outstanding, increases the proportional number of
Shares Beneficially Owned by the Subject Persons; provided that if a Change in
Control would occur (but for the operation of this sentence) as a result of the
acquisition of Shares or Voting Securities by the Corporation and, after such
share acquisition by the Corporation, the Subject Person becomes the Beneficial
Owner of any additional Shares or Voting Securities and such Beneficial
Ownership increases the percentage of the then outstanding Shares or Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
13.8. Corporation. For
purposes of this Agreement, all references to the Corporation shall include its
Successors and Assigns.
13.9. Disability. For
purposes of this Agreement, “Disability” shall mean a physical or mental
infirmity which impairs the Executive’s ability to substantially perform his
duties with the Corporation for six (6) consecutive months, and within the time
period set forth in a Notice of Termination given to the Executive (which time
period shall not be less than thirty (30) days), the Executive shall not have
returned to full-time performance of his duties; provided, however, that if
the Corporation’s Long Term Disability Plan, or any successor plan (the “Disability Plan”), is
then in effect, the Executive shall not be deemed disabled for purposes of this
Agreement unless the Executive is also eligible for “Total Disability” (as
defined in the Disability Plan) benefits (or similar benefits in the event of a
successor plan) under the Disability Plan.
13.10. Good Reason.
(a) For purposes of this Agreement, “Good Reason” shall mean the
occurrence after a Change in Control of any of the following events or
conditions:
(1) a
change in the Executive’s status, title, position or responsibilities (including
reporting responsibilities) which, in the Executive’s reasonable judgment,
represents an adverse change from his status, title, position or
responsibilities as in effect immediately prior thereto; the assignment to the
Executive of any duties or responsibilities which, in the Executive’s reasonable
judgment, are inconsistent with his status, title, position or responsibilities;
or any removal of the Executive from or failure to reappoint or reelect him to
any of such offices or positions, except in connection with the termination of
his employment for Disability, Cause, as a result of his death or by the
Executive other than for Good Reason;
(2) a
reduction in the Executive’s annual base salary below the Base
Amount;
(3) the
relocation of the offices of the Corporation at which the Executive is
principally employed to a location more than twenty-five (25) miles from the
location of such offices immediately prior to the Change in Control, or the
Corporation’s requiring the Executive to be based anywhere other than such
offices, except to the extent the Executive was not previously assigned to a
principal location and except for required travel on the Corporation’s business
to an extent substantially consistent with the Executive’s business travel
obligations at the time of the Change in Control;
(4) the
failure by the Corporation to pay to the Executive any portion of the
Executive’s current compensation or to pay to the Executive any portion of an
installment of deferred compensation under any deferred compensation program of
the Corporation in which the Executive participated, within seven (7) days of
the date such compensation is due
(5) the
failure by the Corporation to (A) continue in effect (without reduction in
benefit level, and/or reward opportunities) any material compensation or
employee benefit plan in which the Executive was participating immediately prior
to the Change in Control, including, but not limited to, any of the plans listed
in Appendix A hereto, unless a substitute or replacement plan has been
implemented which provides substantially identical compensation or benefits to
the Executive or (B) provide the Executive with compensation and benefits, in
the aggregate, at least equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each other compensation or employee
benefit plan, program and practice in which the Executive was participating
immediately prior to the Change in Control;
(6) the
failure of the Corporation to obtain from its Successors or Assigns the express
assumption and agreement required under Section 9 hereof; or
(7) any
purported termination of the Executive’s employment by the Corporation which is
not effected pursuant to a Notice of Termination satisfying the terms set forth
in the definition of Notice of Termination (and, if applicable, the terms set
forth in the definition of Cause).
(b) Any event
or condition described in Section 13.10(a)(1) through (6) which occurs at any
time prior to the date of a Change in Control and (A) which occurred
after the Corporation entered into a definitive agreement, the consummation of
which would constitute a Change in Control or (B) which the Executive reasonably
demonstrates was at the request of a Third Party who has indicated an intention
or has taken steps reasonably calculated to effect a Change in Control, shall
constitute Good Reason for purposes of this Agreement, notwithstanding that it
occurred prior to a Change in Control.
13.11. Incentive
Plan. For purposes of this Agreement, “Incentive Plan” shall
mean the CommScope, Inc. Annual Incentive Plan, or any successor annual
incentive plan, maintained by the Corporation.
13.12. Notice of Termination. For
purposes of this Agreement, following a Change in Control, “Notice of
Termination” shall mean a written notice of termination of the Executive’s
employment, signed by the Executive if to the Corporation or by a duly
authorized officer of the Corporation if to the Executive, which indicates the
specific termination provision in this Agreement, if any, relied upon and which
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive’s employment under the provision so
indicated.
13.13. Person. For
purposes of this Agreement, “Person” shall mean a person within the meaning of
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended.
13.14. Pro Rata
Bonus. For purposes of this Agreement, “Pro Rata Bonus” shall
mean the actual bonus paid or payable to the Executive under the Incentive Plan
in respect of the fiscal year of the Corporation immediately prior to that in
which the Executive’s Termination Date occurs, multiplied by a fraction, the
numerator of which is the number of days through the Termination Date that the
Executive was employed by the Corporation in the year in which the Termination
Date occurs, and the denominator of which is 365.
13.15. Shares. For
purposes of this Agreement, “Shares” shall mean the common stock, par value
$0.01 per share, of the Corporation and any other securities into which such
shares are changed or for which such shares are exchanges.
13.16. Subsidiary. For purposes of this Agreement,
“Subsidiary” shall mean a corporation as defined in Section 424(f) (or a
successor provision to such section) of the Code, and regulations and rulings
thereunder, with the Corporation being treated as the employer corporation for
purposes of this definition.
13.17. Successors and Assigns. For purposes of this Agreement, “Successors
and Assigns” shall mean, with respect to the Corporation, a corporation or other
entity acquiring all or substantially all the assets and business of the
Corporation, whether by operation of law or
otherwise.
13.18. Termination Date. For
purposes of this Agreement, “Termination Date” shall mean (a) in the case of the
Executive’s death, his date of death, (b) if the Executive’s employment is
terminated for Disability, thirty (30) days after Notice of Termination is given
(provided that the Executive shall not have returned to the performance of his
duties on a full-time basis during such thirty (30) day period) and (c) if the
Executive’s employment is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a termination for Cause shall
not be less than thirty (30) days, and in the case of a termination for Good
Reason shall not be more than sixty (60) days, from the date such Notice of
Termination is given); provided, however, that if
within thirty (30) days after any Notice of Termination is given the party
receiving such Notice of Termination in good faith notifies the other party that
a dispute exists concerning the basis for the termination, the Termination Date
shall be the date on which the dispute is finally determined, either by mutual
written agreement of the parties, or by the final judgment, order or decree of a
court of competent jurisdiction (the time for appeal therefrom having expired
and no appeal having been taken). Notwithstanding the pendency of any
such dispute, the Corporation shall continue to pay the Executive his Base
Amount and continue the Executive as a participant in all compensation,
incentive, bonus, pension, profit sharing, medical, hospitalization, dental,
life insurance and disability benefit plans in which he was participating when
the notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with this Section 13.18 whether or not the dispute is
resolved in favor of the Corporation, and the Executive shall not be obligated
to repay to the Corporation any amounts paid or benefits provided pursuant to
this sentence. Notwithstanding the foregoing, for purposes of this
Agreement, the Executive shall be considered to have terminated employment with
the Corporation when the Executive incurs a “separation from service” with the
Corporation within the meaning of Section 409A(a)(2)(A)(i) of the Code, and
applicable administrative guidance issued thereunder.
13.19. Voting
Power. For
purposes of this Agreement, “Voting Power” shall mean the combined voting power
of the then outstanding Voting Securities.
13.20. Voting
Securities. For purposes of this
Agreement, “Voting Securities” shall mean, with respect to the Corporation or
any Subsidiary, any securities issued by the Corporation or such Subsidiary,
respectively, which generally entitle the holder thereof to vote for the
election of directors of the Corporation.
IN WITNESS WHEREOF, the Corporation
has caused this Agreement to be executed by their duly authorized officers and
the Executive has executed this Agreement as of the day and year first above
written.
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