SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
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(as permitted by Rule 14a-6(e)(2))
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COMMSCOPE, INC.
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(Name of Registrant as Specified in Its Charter)
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COMMSCOPE, INC.
March 30, 2000
Dear Stockholder:
You are cordially invited to the Annual Meeting of Stockholders
(the "Annual Meeting") of CommScope, Inc., a Delaware corporation (the
"Company"), to be held on May 5, 2000 at 1:30 p.m., local time, at the
Chase Manhattan Bank, 270 Park Avenue - 11th Floor, New York, New York
10017.
At the Annual Meeting we will review the Company's activities in
1999, as well as the outlook for 2000. Details of the business to be
conducted and the matters to be considered at the Annual Meeting are given
in the attached Notice of Annual Meeting and Proxy Statement.
It is important that your shares be represented at the Annual
Meeting, whether or not you are able to attend personally. You are
therefore urged to complete, sign, date and return the enclosed proxy card
promptly in the accompanying envelope, which requires no postage if mailed
in the United States. This year, if your shares are held in a participating
bank or brokerage account, you may be eligible to vote over the Internet,
or by telephone, as an alternative to mailing the traditional proxy card.
Please see "Voting Electronically via the Internet or Telephone" in the
Proxy Statement for further details.
You are, of course, welcome to attend the Annual Meeting and vote
in person, even if you have previously returned your proxy card or voted by
Internet or telephone.
Sincerely,
/s/ Frank M. Drendel
Frank M. Drendel
Chairman of the Board and
Chief Executive Officer
COMMSCOPE, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders (the "Annual Meeting") of
CommScope, Inc. (the "Company") will be held on May 5, 2000, at 1:30 p.m.,
local time, at the Chase Manhattan Bank, 270 Park Avenue - 11th Floor, New
York, New York 10017.
The Annual Meeting will be conducted:
1. To consider and act on the following proposals, which are
described in the accompanying Proxy Statement:
Proposal One: To elect two Class III directors for terms
ending at the 2003 Annual Meeting of
Stockholders;
Proposal Two: To approve an amendment to the Amended and
Restated CommScope, Inc. 1997 Long-Term
Incentive Plan to increase the shares reserved
for issuance thereunder by an additional
2,000,000 shares; and
Proposal Three: To ratify the appointment by the Board of
Directors of the Company of Deloitte & Touche
LLP as independent auditor for the Company for
the 2000 fiscal year.
2. To transact such other business as may properly come before the
Annual Meeting.
Stockholders of record at the close of business on March 21, 2000
will be entitled to notice of and to vote at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Frank B. Wyatt, II
Frank B. Wyatt, II
Secretary
March 30, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE ACCOMPANYING
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU
ELECTED TO RECEIVE THE 2000 PROXY STATEMENT AND 1999 ANNUAL REPORT
ELECTRONICALLY OVER THE INTERNET YOU WILL NOT RECEIVE A PAPER PROXY AND YOU
SHOULD VOTE ONLINE, UNLESS YOU CANCEL YOUR ENROLLMENT. IF YOUR SHARES ARE
HELD IN A PARTICIPATING BANK OR BROKERAGE ACCOUNT AND YOU DID NOT ELECT TO
RECEIVE MATERIALS THROUGH THE INTERNET, YOU MAY BE ELIGIBLE TO VOTE YOUR
PROXY OVER THE INTERNET OR BY TELEPHONE. PLEASE SEE "VOTING ELECTRONICALLY
VIA THE INTERNET OR TELEPHONE" IN THE PROXY STATEMENT FOR FURTHER DETAILS.
YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED BY DELIVERY TO THE
COMPANY OF A SUBSEQUENTLY EXECUTED PROXY OR A WRITTEN NOTICE OF REVOCATION
OR BY VOTING IN PERSON AT THE ANNUAL MEETING.
COMMSCOPE, INC.
1375 LENOIR-RHYNE BOULEVARD
HICKORY, NORTH CAROLINA 28602
---------------------------------
PROXY STATEMENT
This Proxy Statement (the "Proxy Statement") is being furnished
to the stockholders of CommScope, Inc., a Delaware corporation (the
"Company"), in connection with the solicitation of proxies by the Board of
Directors of the Company for use at the Annual Meeting of Stockholders (the
"Annual Meeting") of the Company to be held on May 5, 2000 at 1:30 p.m.,
local time, at the Chase Manhattan Bank, 270 Park Avenue - 11th Floor, New
York, New York 10017, and any adjournment or postponement thereof.
At the Annual Meeting, stockholders will be asked to consider and
vote upon the following proposals: Proposal One: To elect two Class III
directors for terms ending at the 2003 Annual Meeting of Stockholders;
Proposal Two: To approve an amendment to the Amended and Restated
CommScope, Inc. 1997 Long-Term Incentive Plan to increase the shares
reserved for issuance thereunder by an additional 2,000,000 shares; and
Proposal Three: To ratify the appointment by the Board of Directors of the
Company of Deloitte & Touche LLP as independent auditor for the Company for
the 2000 fiscal year.
The Board of Directors of the Company recommends a vote FOR
approval of each of the proposals.
The Board of Directors of the Company has fixed the close of
business on March 21, 2000 (the "Annual Meeting Record Date") as the record
date for determining the holders of outstanding shares of common stock, par
value $0.01 per share (the "Common Stock"), entitled to receive notice of,
and to vote at, the Annual Meeting or any adjournment thereof. On that
date, there were 50,995,406 shares of Common Stock issued and outstanding
and entitled to vote at the Annual Meeting, each entitled to one vote on
all matters to be acted upon. The Notice of Annual Meeting of Stockholders,
this Proxy Statement and the form of proxy are first being mailed or sent
electronically to each stockholder entitled to vote at the Annual Meeting
on or about March 30, 2000.
On July 28, 1997, the Company became an independent public
company when it was spun off (the "Spin-off") from its parent company,
General Instrument Corporation (subsequently renamed General Semiconductor,
Inc.).
VOTING AND REVOCATION OF PROXIES
VOTING
Only holders of record of shares of Common Stock as of the close
of business on the Annual Meeting Record Date will be entitled to notice of
and to vote at the Annual Meeting or any adjournment thereof. The presence,
either in person or by properly executed proxy, of the holders of a
majority of the outstanding shares of Common Stock is necessary to
constitute a quorum at the Annual Meeting and to permit action to be taken
by the stockholders at the Annual Meeting.
The affirmative vote of a plurality of the shares of Common Stock
entitled to vote thereon, and present in person or represented by proxy, at
the Annual Meeting is required to elect the directors nominated pursuant to
Proposal One. The affirmative vote of a majority of the votes cast on
Proposal
1
Two is required to approve such proposal, provided that the total votes
cast on such proposal represents a majority of the shares entitled to vote
thereon. The affirmative vote of a majority of the shares of Common Stock
entitled to vote thereon, and present in person or represented by proxy, is
required to approve Proposal Three.
For purposes of determining the number of votes cast with respect
to any voting matter, only those cast "for" or "against" are included;
abstentions and broker non-votes are excluded. For purposes of determining
whether the affirmative vote of the holders of a majority of the shares
entitled to vote on a proposal and present at the Annual Meeting has been
obtained, abstentions will be included in, and broker non-votes will be
excluded from, the number of shares present and entitled to vote.
Accordingly, abstentions will have the effect of a vote "against" the
matter (other than the election of directors) and broker non-votes will
have the effect of reducing the number of affirmative votes required to
achieve the majority vote.
All shares of Common Stock that are represented at the Annual
Meeting by properly executed proxies received prior to or at the Annual
Meeting and not revoked will be voted at the Annual Meeting in accordance
with the instructions indicated in such proxies. If no instructions are
indicated for a particular proposal on a proxy, such proxy will be voted in
accordance with the Board of Directors' recommendations as set forth herein
with respect to such proposal(s).
In the event that a quorum is not present at the time the Annual
Meeting is convened, or if for any other reason the Company believes that
additional time should be allowed for the solicitation of proxies, the
stockholders entitled to vote at the Annual Meeting, present in person or
represented by proxy, will have the power to adjourn the meeting from time
to time, without notice other than announcement at the meeting. If the
Company proposes to adjourn the Annual Meeting by a vote of the
stockholders, the persons named in the enclosed form of proxy will vote all
shares of Common Stock for which they have voting authority in favor of
such adjournment.
VOTING ELECTRONICALLY VIA THE INTERNET OR TELEPHONE
Stockholders whose shares are registered in the name of a bank or
brokerage and who elected to receive the Company's 1999 Annual Report and
this Proxy Statement over the Internet will be receiving an email on or
about March 30, 2000 with information on how to access stockholder
information and instructions for voting. If your shares are registered in
the name of a participating bank or brokerage firm and you have not elected
to receive the Company's 1999 Annual Report and this Proxy Statement over
the Internet, you may be eligible to vote your shares electronically over
the Internet or by telephone. A number of banks and brokerage firms are
participating in the ADP Shareholder Preference Database program. This
program provides eligible stockholders who receive a paper copy of a
company's annual report and proxy statement the opportunity to vote via the
Internet or by telephone. If your bank or brokerage firm is participating
in ADP's program, your voting form will provide instructions. If your
voting form does not reference Internet or telephone information, please
complete and return the paper proxy card in the self-addressed postage-paid
envelope provided.
REVOCATION
Any stockholder who executes and returns a proxy may revoke it at
any time prior to the voting of the proxies by giving written notice of
revocation to the Secretary of the Company or by executing a later-dated
proxy. In addition, voting by telephone, Internet or mail will not prevent
you from voting in person at the Annual Meeting should you be present and
wish to do so.
2
PROPOSAL ONE: ELECTION OF DIRECTORS
The Company's Board of Directors currently consists of six
directors divided into three classes, Class I, Class II and Class III, with
members of each class holding office for staggered three-year terms and
until their successors have been duly elected and qualified. There are
currently: two Class I Directors, whose terms expire at the 2001 Annual
Meeting of Stockholders; two Class II Directors, whose terms expire at the
2002 Annual Meeting of Stockholders; and two Class III Directors, whose
terms expire at the Annual Meeting (in all cases subject to the election
and qualification of their successors and to their earlier death,
resignation or removal).
If any one or more of the nominees is unable to serve for any
reason or withdraws from nomination, proxies will be voted for the
substitute nominee or nominees, if any, proposed by the Board of Directors.
The Board of Directors has no knowledge that any nominee will or may be
unable to serve or will or may withdraw from nomination. All of the
following nominees are presently serving as directors of the Company.
Information concerning the nominees for director is set forth below.
NOMINEES FOR TERMS ENDING AT THE 2003 ANNUAL MEETING OF STOCKHOLDERS
FRANK M. DRENDEL, age 55, has been Chairman and Chief Executive
Officer of the Company since the Spin-off. He served as a director of
General Instrument Corporation of Delaware, Inc. ("GI Delaware"), a
subsidiary of General Instrument Corporation, and its predecessors from
1987 to 1992. He was a director of General Instrument Corporation from 1992
until the Spin-off and General Instrument Corporation (formerly NextLevel
Systems, Inc.) from the Spin-off until January 5, 2000. He has served as
President and Chairman of CommScope, Inc. of North Carolina ("CommScope
NC"), currently a subsidiary of the Company, from 1986 to 1997, and Chief
Executive Officer of CommScope NC since 1976. He is a director of Nextel
Communications, Inc., C-SPAN and the National Cable Television Association.
DUNCAN M. ("LAUCH") FAIRCLOTH, age 72, is a private investor and
former U.S. Senator. He has spent approximately 50 years, and continues to
spend time, in the private business sector building several businesses in
agriculture, construction, real estate and automobile dealerships. He is
also a long-time private investor. Mr. Faircloth was a United States
Senator from 1993 through January 1999. He served on the Senate
Appropriations Committee, the Banking, Housing and Urban Affairs Committee
and the Small Business Committee. He was the chairman of two subcommittees
- - the Appropriations Subcommittee on the District of Columbia and the
Banking Subcommittee on Financial Institutions and Regulatory Relief. Mr.
Faircloth also served as Chairman of the North Carolina Highway Commission
from 1969 to 1973 and Secretary of the North Carolina Department of
Commerce from 1977 to 1983.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR"
EACH OF THE FOREGOING NOMINEES AS A DIRECTOR OF THE COMPANY. PROXIES WILL
BE VOTED "FOR" EACH OF THE FOREGOING NOMINEES AS A DIRECTOR OF THE COMPANY,
UNLESS OTHERWISE SPECIFIED IN THE PROXY.
3
MANAGEMENT OF THE COMPANY
BOARD OF DIRECTORS OF THE COMPANY
The following table sets forth names, in alphabetical order, and
information as to the persons who currently serve as directors of the
Company, each of whom has served since the Spin-off (other than Mr.
Faircloth, who has served since February 11, 1999).
NAME, AGE AND CURRENT TERM
PRINCIPAL OCCUPATION EXPIRES INFORMATION
- ------------------------------ ---------- ---------------------------------
Edward D. Breen, 44 2002 Edward D. Breen is Executive
Executive Vice President Vice President of Motorola,
of Motorola, Inc. and Inc. ("Motorola") and President
President of Motorola's of Motorola's Broadband
Broadband Communications Communications Sector. He has
Sector, Communications served in such capacity since
Enterprises Division of January 5, 2000. He was
Motorola, Inc. Chairman and Chief Executive
officer of General Instrument
Corporation, formerly NextLevel
Systems, Inc. ("GI"), and
served in that capacity from
December 1997 to December 1999,
after having served as acting
Chief Executive Officer and
President of GI since October
1997. He was President of
General Instrument
Corporation's Broadband
Networks Group from February
1996 and Vice President of
General Instrument Corporation
from November 1994 until the
Spin-off. He continued in such
positions for GI through
October 1997. He was Executive
Vice President, Terrestrial
Systems of General Instrument
Corporation , from October 1994
to January 1996 and Senior Vice
President of Sales of General
Instrument Corporation from
June 1988 to October 1994.
Frank M. Drendel, 55 2000 Frank M. Drendel has been
Chairman and Chief Chairman and Chief Executive
Executive Officer of Officer of the Company since
the Company the Spin-off. He served as a
director of GI Delaware, a
subsidiary of General
Instrument Corporation, and its
predecessors from 1987 to 1992.
He was a director of General
Instrument Corporation from
1992 until the Spin-off and GI
from the Spin-off until January
5, 2000. He has served as
President and Chairman of
CommScope NC, currently a
subsidiary of the Company, from
1986 to 1997, and Chief
Executive Officer of CommScope
NC since 1976. He is a director
of Nextel Communications, Inc.,
C-SPAN and the National Cable
Television Association.
4
NAME, AGE AND CURRENT TERM
PRINCIPAL OCCUPATION EXPIRES INFORMATION
- ------------------------------ ---------- ---------------------------------
Duncan M. ("Lauch") 2000 Duncan M. ("Lauch") Faircloth
Faircloth, 72 has spent approximately 50
Private Investor, years, and continues to spend
Former U.S. Senator time, in the private business
sector building several
businesses in agriculture,
construction, real estate and
automobile dealerships. He is
also a long-time private
investor. Mr. Faircloth was a
United States Senator from 1993
through January 1999. He served
on the Senate Appropriations
Committee, the Banking, Housing
and Urban Affairs Committee and
the Small Business Committee.
He was the chairman of two
subcommittees - the
Appropriations Subcommittee on
the District of Columbia and
the Banking Subcommittee on
Financial Institutions and
Regulatory Relief. Mr.
Faircloth also served as
Chairman of the North Carolina
Highway Commission from 1969 to
1973 and Secretary of the North
Carolina Department of Commerce
from 1977 to 1983.
Boyd L. George, 58 2001 Boyd L. George is Chairman of
Chairman of the Board the Board and Chief Executive
and Chief Executive Officer of Alex Lee, Inc.
Officer of Alex Lee, Inc. (subsidiaries of Alex Lee, Inc.
include: Merchants
Distributors, Inc., a wholesale
food distributor; Institution
Food-House, Inc., a foodservice
distributor; and Lowe's Food
Stores, Inc., a retail
operation). Mr. George has been
Chairman and Chief Executive
Officer of Alex Lee, Inc. since
the company was founded in 1992
and served as President from
1992 to 1995. Mr. George joined
a subsidiary of Alex Lee, Inc.
in 1969 and has served, and
continues to serve, in various
positions, including Chairman
and Chief Executive Officer for
such subsidiary.
George N. Hutton, Jr., 70 2001 George N. Hutton, Jr. is and
Private Investor has been a private investor for
more than 15 years. He is a
former director of Sprint
Corporation and of M/A Com Inc.
5
NAME, AGE AND CURRENT TERM
PRINCIPAL OCCUPATION EXPIRES INFORMATION
- ------------------------------ ---------- ---------------------------------
James N. Whitson, 65 2002 James N. Whitson has served and
Director of various continues to serve as a
organizations director of Sammons
Enterprises, Inc. ("SEI") a
privately-owned company engaged
in life insurance, industrial
and oil field distribution,
equipment sales and rentals,
and bottled water, since 1973,
and as Executive Vice President
and Chief Operating Officer of
SEI from 1989 until March 1998,
when he retired. He is a
director/trustee of the
Seligman Group of Investment
Companies and a director of
C-SPAN.
COMPENSATION OF DIRECTORS
Employee directors do not receive additional compensation for
serving on the Company's Board of Directors. Nonemployee directors receive
an annual retainer of $25,000, and committee chairmen receive an additional
$5,000 retainer. The nonemployee directors' remuneration is paid quarterly
unless payment is deferred. In addition, each nonemployee director, upon
initial election to the Board of Directors, receives 1,000 shares of Common
Stock that vest immediately and is granted an option to purchase 20,000
shares of Common Stock at an exercise price per share equal to the fair
market value on the date of grant, which option becomes exercisable with
respect to one-third of the underlying shares on each of the first three
anniversaries of the grant date. If a director remains in office, a similar
option is granted every three years.
COMMITTEES OF THE BOARD OF DIRECTORS - BOARD MEETINGS
The Board of Directors of the Company held 5 meetings in 1999.
All incumbent directors attended all of the meetings of the Board of
Directors and of the Board Committees on which they served.
The Company has Audit, Compensation and Executive Committees of
the Board of Directors. Members of the Audit and Compensation Committees
are not employees of the Company. The Company has no nominating or similar
committee.
AUDIT COMMITTEE. The Audit Committee's principal functions are to
review the scope of the annual audit of the Company by its independent
auditors, review the annual financial statements of the Company and the
related audit report as prepared by the independent auditors, recommend the
selection of independent auditors each year and review the independence of
the independent auditors. The members of the Audit Committee are the
following nonemployee directors: Mr. Whitson, Chairman, Mr. Breen and Mr.
George. The Audit Committee held 3 meetings in 1999.
COMPENSATION COMMITTEE. The Compensation Committee administers
the stock option and incentive plans of the Company, and in this capacity
it makes or recommends option grants or awards under these plans. In
addition, the Compensation Committee makes recommendations to the Company's
Board of Directors with respect to the compensation of the Chief Executive
Officer and determines the compensation of the other senior executives. The
Compensation Committee also recommends the establishment of policies
dealing with various compensation and employee benefit plans for the
Company. The members of the Compensation Committee are the following
nonemployee directors: Mr. Hutton, Chairman, and Mr. Faircloth. The
Compensation Committee held 4 meetings in 1999.
6
EXECUTIVE COMMITTEE. The Executive Committee has the authority to
exercise all powers and authority of the Company's Board of Directors that
may be lawfully delegated to it under Delaware law. It meets between
regularly scheduled meetings of the Company's Board of Directors to take
such action as is necessary for the efficient operation of the Company. The
members of the Executive Committee are: Mr. Drendel, Chairman, Mr. Breen
and Mr. George. The Executive Committee held 2 meetings in 1999 and twice
acted by unanimous written consent.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1999, the Company leased an aircraft and hangar from companies
owned by Frank M. Drendel, Chairman and Chief Executive Officer of the
Company, for an aggregate of approximately $139,000, including certain
reimbursable expenses associated with such aircraft usage. Mr. Drendel also
had a substantial equity interest in Wood Composite Technologies, LLC.
During 1999, the Company purchased plastic recyclable reels from Wood
Composite Technologies, LLC for an aggregate payment of approximately
$214,000. Furthermore, Mr. Drendel is a director of Nextel Communications,
Inc., a leading provider of fully integrated wireless communication
services. In 1999, Nextel Communications, Inc. purchased products from the
Company for an aggregate amount representing less than 2.3% of the
Company's total sales. The Company believes the terms of all of these
transactions are no less favorable to the Company than the terms which
could be obtained from unrelated third parties.
Frank M. Drendel, Chairman and Chief Executive Officer of the
Company, was a director of GI in 1999 and Edward D. Breen, a director of
the Company, was Chairman and Chief Executive Officer of GI in 1999. In
1999, GI purchased products and services from the Company for an aggregate
amount representing less than 1% of the Company's total sales. The Company
believes that the terms of these transactions were no less favorable to the
Company than the terms which could be obtained from an unrelated third
party.
Boyd L. George, a director of the Company, is Chairman and Chief
Executive Officer of Alex Lee, Inc., the parent of Lowe's Food Stores, Inc.
In 1999, the Company purchased holiday gift certificates for all of its
North Carolina area employees (as an employee benefit) from Lowe's Food
Stores, Inc. for an aggregate payment of approximately $81,000. The Company
believes that the terms of this transaction were no less favorable to the
Company than the terms which could be obtained from an unrelated third
party.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers and holders of more
than 10% of the Common Stock to file with the Securities and Exchange
Commission (the "Commission") reports of ownership and changes in ownership
of Common Stock and other equity securities of the Company on Forms 3, 4
and 5. The Company undertakes to make such filings on behalf of its
directors and officers. Based on written representations of reporting
persons and a review of those reports, the Company believes that, during
the year ended December 31, 1999, its officers and directors and holders of
more than 10% of the Common Stock complied with all applicable Section
16(a) filing requirements.
EXECUTIVE OFFICER COMPENSATION
SUMMARY OF COMPENSATION. The table below sets forth a summary of
the compensation paid by the Company for the last three fiscal years to the
Chief Executive Officer of the Company and the four additional most highly
compensated executive officers of the Company.
7
SUMMARY COMPENSATION TABLE
Annual Compensation(a) Long-Term Compensation
---------------------- Awards
----------------------------
Securities
Underlying All Other
Name and Principal Position Year Base Salary Bonus Options(#)(b) Compensation
--------------------------- ---- ----------- ----- ------------- ------------
FRANK M. DRENDEL.............. 1999 $ 502,761 $ 424,833 56,300 $ 16,263(c)
CHAIRMAN AND CHIEF EXECUTIVE 1998 475,008 316,999 101,800 19,558
OFFICER 1997 431,680 -- 303,337 14,707
BRIAN D. GARRETT.............. 1999 $ 301,640 $ 259,086 32,650 $ 15,673(c)
PRESIDENT AND CHIEF OPERATING 1998 285,000 175,566 50,040 17,088
OFFICER 1997 202,780 -- 150,011 14,630
JEARLD L. LEONHARDT........... 1999 $ 238,135 $ 199,507 22,500 $ 15,510(c)
EXECUTIVE VICE PRESIDENT AND 1998 225,000 138,605 50,040 17,884
CHIEF FINANCIAL OFFICER 1997 200,600 -- 112,510 13,079
GENE W. SWITHENBANK........... 1999 $ 211,686 $ 153,629 15,000 $ 15,422(c)
EXECUTIVE VICE PRESIDENT, 1998 199,992 112,937 27,100 18,033
SALES AND MARKETING 1997 166,664 -- 78,668 12,927
LARRY W. NELSON............ 1999 $ 213,186 $ 140,792 15,000 $ 12,187(c)
EXECUTIVE VICE PRESIDENT, 1998 208,992 77,249 27,100 12,600
DEVELOPMENT 1997 208,864 -- 102,916 14,225
- ---------------------------------
<FN>
(a) Unless otherwise indicated, with respect to any individual named in
the above table, the aggregate amount of perquisites and other
personal benefits, securities or property was less than the lesser of
$50,000 or 10% of the total annual salary and bonus reported for the
named executive officer.
(b) Reflects the number of shares of Common Stock underlying options
granted.
(c) Amounts for 1999 reflect (i) the matching contribution under the
CommScope, Inc. of North Carolina Employees Profit Sharing and Savings
Plan (the "Savings Plan") in the amount of $3,138, $3,200, $3,242 and
$3,240 for 1999 on behalf of Messrs. Drendel, Garrett, Leonhardt and
Swithenbank, respectively, (ii) the allocation of $8,472 to the
account of each of Messrs. Drendel, Garrett, Leonhardt, Swithenbank
and Nelson under the Savings Plan for 1999, (iii) payment by the
Company in 1999 of premiums of $1,629, $977, $772, $686 and $691 for
term life insurance on behalf of Messrs. Drendel, Garrett, Leonhardt,
Swithenbank and Nelson, respectively and (iv) payment by the Company
in 1999 of cash amounts in lieu of allocations to their respective
Savings Plan accounts of $3,024 on behalf of each of Messrs. Drendel,
Garrett, Leonhardt, Swithenbank and Nelson.
</FN>
8
STOCK OPTIONS
GRANT OF OPTIONS. The table below sets forth information with
respect to grants of options to purchase Common Stock during the year ended
December 31, 1999 to the executives listed in the Summary Compensation
Table.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(a)
------------------------------------------------------------ --------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION
NAME GRANTED(#)(b) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ------------------------ ---------------- -------------- ---------------- ------------- -------------- -----------
Frank M. Drendel.... 56,300 8.2 $38.375 12/15/09 $1,358,735 $3,443,301
Brian D. Garrett.... 32,650 4.7 $38.375 12/15/09 $ 787,970 $1,996,870
Jearld L. Leonhardt. 22,500 3.3 $38.375 12/15/09 $ 543,012 $1,376,098
Gene W. Swithenbank. 15,000 2.2 $38.375 12/15/09 $ 362,007 $ 917,398
Larry W. Nelson..... 15,000 2.2 $38.375 12/15/09 $ 362,007 $ 917,398
- ----------------------
<FN>
(a) The assumed 5% and 10% annual rates of appreciation over the term of
the options are set forth in accordance with rules and regulations
adopted by the Commission and do not represent the Company's estimate
of stock price appreciation.
(b) Represents options granted under the Amended and Restated CommScope,
Inc. 1997 Long-Term Incentive Plan (the "1997 LTIP"). These options
become exercisable with respect to one-third of the shares covered
thereby on December 15, 2000, 2001 and 2002. In the event of a change
in control of the Company, all such options shall become immediately
and fully exercisable.
</FN>
AGGREGATED OPTION EXERCISES AND YEAR-END VALUE. The following
table sets forth as of December 31, 1999, for each of the executives listed
in the Summary Compensation Table (i) the total number of unexercised
options for Common Stock (exercisable and unexercisable) held and (ii) the
value of such options which were in-the-money at December 31, 1999 (based
on the difference between the closing price of Common Stock at December 31,
1999 and the exercise price of the option on such date).
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED STOCK IN-THE-MONEY STOCK OPTIONS
OPTIONS AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)(a)
------------------------------- ---------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ --------------- -------------- --------------- --------------- ------------- --------------
Frank M. Drendel...... -- -- 398,536 209,000 $10,890,640 $4,184,263
Brian D. Garrett...... -- -- 169,520 115,814 $4,655,304 $2,275,652
Jearld L. Leonhardt... -- -- 151,162 91,330 $4,195,915 $1,870,760
Gene W. Swithenbank... -- -- 92,137 55,675 $2,560,417 $1,114,616
Larry W. Nelson....... 77,655 524,301 67,223 55,675 $1,850,635 $1,114,616
- --------------------------
9
<FN>
(a) Based on the difference between the closing price of $40.3125 per
share at December 31, 1999, as reported on the NYSE Composite Tape and
the exercise price of the option on such date.
</FN>
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The CommScope, Inc. of North Carolina Supplemental Executive
Retirement Plan (the "SERP") is maintained for the benefit of certain
executives of the Company and its subsidiaries. The SERP provides for the
payment of a monthly retirement (or early retirement) benefit to
participants who retire from the Company on or after age 65 (or, for early
retirement benefits, on or after age 55 with ten years of service). All
individuals who were participants in the SERP on August 22, 1990, including
Messrs. Drendel, Garrett, Leonhardt, Swithenbank and Nelson, are fully
vested in their benefits under the SERP and, thus, could retire prior to
attaining age 65 (or age 55 in the case of early retirement) and receive a
deferred benefit.
The benefits provided under the SERP are payable over 15 years
and are equal to a specified percentage, which does not exceed 50%, of the
participant's highest consecutive 12 months of base salary during the
participant's final 60 months of employment. Early retirement benefits are
subject to actuarial reductions. Based on compensation earned for the
calendar year which ended December 31, 1999, the estimated annual benefits
payable to Messrs. Drendel, Garrett, Leonhardt, Swithenbank and Nelson on
or after attaining age 65 are $167,587, $100,547, $79,378, $70,562, and
$71,062, respectively.
Pursuant to the terms of the SERP, in the event of a change in
control of the Company (as defined in the SERP), each participant employed
by the Company immediately prior to the change in control shall become
immediately and fully vested in their pension benefits payable upon
retirement.
EMPLOYMENT AGREEMENTS
In November 1988, Frank M. Drendel entered into an employment
agreement (the "Agreement") with GI Delaware and CommScope NC, providing
for his employment as President and Chief Executive Officer of CommScope NC
for an initial term ending on November 28, 1991. The Agreement provides for
a minimum salary, which is less than Mr. Drendel's current salary, and
provides that Mr. Drendel will participate in any management incentive
compensation plan for executive officers that CommScope NC maintains.
Commencing on November 29, 1989, subject to early termination by reason of
death or disability or for cause (as defined in the Agreement), the
Agreement extends automatically so that the remaining term is always two
years, unless either party gives notice of termination, in which case the
Agreement will terminate two years from the date of such notice. As of the
date of this Proxy Statement, neither party has given notice of
termination. Pursuant to the Agreement, Mr. Drendel is eligible to
participate in all benefit plans available to other CommScope NC senior
executives. The Agreement prohibits Mr. Drendel, for a period of five years
following the term of the Agreement, from engaging in any business in
competition with the business of CommScope NC, in any country where
CommScope NC then conducts business. Effective as of the Spin-off, GI
Delaware ceased to be a party to the Agreement.
SEVERANCE PROTECTION AND SEPARATION AGREEMENTS
The Company has entered into severance protection agreements with
its Chief Executive Officer and its other executive officers. These
agreements have a two-year term which is automatically extended for one
year upon the first anniversary of the agreement and every anniversary
thereafter unless notification is given to either the Company or the
executive.
10
The agreements provide severance pay and other benefits in the
event of a termination of employment within 24 months of a Change in
Control (as defined in the agreement) of the Company if such termination is
(i) for any reason other than by the Company for cause or disability or by
reason of the executive's death or (ii) by the executive for Good Reason
(as defined in the agreement). Such severance pay will be in an amount
equal to two times the sum of the executive's base salary and the highest
bonus that would be payable to the executive in the year of termination in
the case of the Chief Executive Officer and one and one-half times such sum
in the case of all other executive officers. In addition, the Company will
pay the executive all accrued but unpaid compensation and a pro rata bonus
(calculated up to the executive's termination date). The executive's
benefits will be continued for either 24 months, in the case of the Chief
Executive Officer, or 18 months in the case of all other executive officers
(in each case, a "Continuation Period"). 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 months, an
amount equal to one-twelfth (1/12) of the sum of the executive's base
amount and the executive's bonus amount. The executive will also receive
limited reimbursement for out placement, tax and financial planning
assistance and reimbursement for relocation under certain circumstances.
The severance pay and benefits provided for under the severance protection
agreements 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 Company or any of its affiliates. If the
executive's employment is terminated without cause (i) within six months
prior to a Change in Control or (ii) prior to the date of a Change in
Control but (A) at the request of a third party who effectuates a Change in
Control or (B) otherwise in connection with, or in anticipation of, a
threatened Change in Control which actually occurs, such termination shall
be deemed to have occurred after the Change in Control.
If the executive's employment is terminated by the Company for
cause or disability, by reason of the executive's death or by the executive
other than for Good Reason, the Company shall pay to the executive his
accrued compensation. In addition, in the case of a termination by the
Company for disability or due to the executive's death, the executive will
receive a pro rata bonus in addition to accrued compensation.
The agreements provide for a gross-up payment by the Company in
the event that the total payments the executive receives under the
agreement or otherwise are subject to the excise tax under Section 4999 of
the Internal Revenue Code of 1986, as amended. In such an event, the
Company will pay an additional amount so that the executive is made whole
on an after-tax basis from the effect of the excise tax.
OTHER CHANGE IN CONTROL ARRANGEMENTS
Following is a brief description of the change in control
provisions included in each of the Company's employee compensation plans
and arrangements.
ANNUAL INCENTIVE PLAN. The CommScope, Inc. Annual Incentive Plan
(the "Annual Incentive Plan") is the Company's annual cash bonus incentive
plan for the Chief Executive Officer and certain other key employees. In
the event of a change in control of the Company (as defined in the Annual
Incentive Plan), within 60 days thereafter, the Company will pay to each
participant in the Annual Incentive Plan immediately prior to such change
in control (regardless of whether such participant remains in the employ of
the Company following the change in control) a pro rata portion of his or
her bonus award assuming that all performance percentages are 100%.
DEFERRED COMPENSATION PLAN. The CommScope, Inc. of North Carolina
Deferred Compensation Plan (the "Deferred Compensation Plan") allows a
select group of management or highly
11
compensated employees to defer a percentage of compensation or a specified
dollar amount each year; up to 50% of base salary and 100% of bonus earned.
Amounts deferred are payable in a lump sum or in annual installments
pursuant to the terms of an irrevocable election made by the participant or
earlier upon termination of the participant's employment.
Upon a change in control of the Company (as defined in the
Deferred Compensation Plan), the Deferred Compensation Plan will terminate
and each participant will be paid his or her entire deferred account
balance in a single lump sum.
1997 LTIP. The 1997 LTIP provides for the granting of stock
options, restricted stock, performance units, performance shares, phantom
stock, director shares and tandem awards to employees, officers, and
directors of the Company and its subsidiaries. The Compensation Committee
selects those individuals to whom options and awards will be granted, and
determines the type, size and other terms and conditions of such options
and awards, including the vesting provisions and/or restrictions relating
to such awards. Pursuant to the terms of the 1997 LTIP and subject to an
optionee's rights under his or her option or award agreement, in the event
of a change in control of the Company (as defined in the 1997 LTIP), all
stock options granted pursuant to the 1997 LTIP will become immediately and
fully exercisable.
COMPENSATION COMMITTEE REPORT ON COMPENSATION OF EXECUTIVE OFFICERS
The Compensation Committee of the Board of Directors is comprised
entirely of nonemployee directors. The Compensation Committee considers and
recommends to the Board of Directors the base salary to be paid to the
Chief Executive Officer, determines the base salary for all other executive
officers, makes recommendations to the Board of Directors with respect to
the Company's overall compensation policies, administers and grants awards
under the 1997 LTIP and administers the Annual Incentive Plan with respect
to executive officers and performs such duties as the Board of Directors
may from time to time request.
In establishing and administering the Company's compensation
policies and programs, the Compensation Committee considered the
compensation plans and arrangements of a peer group of companies with which
the Company competes for customers and executive talent, including the
levels of individual compensation for similarly situated executives of the
peer group, as well as factors specifically relevant to the Company. The
basic objective of the Compensation Committee is to formulate compensation
policies and programs intended to attract, retain, and motivate highly
qualified key employees, including executive officers. Compensation of
executive officers and other key employees, including the Chief Executive
Officer, is comprised of three principal elements: (i) stock ownership,
(ii) base salary and (iii) annual bonus.
STOCK OWNERSHIP. The Compensation Committee believes that
executive officers and other significant employees, who are in a position
to make a substantial contribution to the long-term success of the Company
and to build stockholder value, should have a significant stake in the
Company's on-going success. This focuses attention on managing the Company
as an owner with an equity position in the business and seeks to align
these employees' interests with the long-term interests of stockholders.
Accordingly, one of the Company's principal methods to motivate executive
officers and other significant employees is through a broad and deep stock
option program.
On March 20, 2000, the Board of Directors approved an amendment
to the 1997 LTIP, subject to stockholder approval. The amendment to the
1997 LTIP increases the number of shares of Common Stock available for
issuance under the plan by 2 million shares. As of February 29, 2000,
only
12
approximately 1.5 million shares of Common Stock were available for
issuance upon future stock option grants. During 1999, the Company awarded
options under the 1997 LTIP to purchase an aggregate of approximately
190,000 shares of Common Stock to 9 executive officers (including executive
officers named in the Summary Compensation Table). The exercise price of
each of these options as of the date of grant was the closing market price
per share of Common Stock on the date of grant.
Management recommends to the Compensation Committee those
executive officers and other significant employees to whom options should
be granted and the number of options to be granted to them. The
recommendations are based on a review of each employee's individual
performance, position and level of responsibility in the Company, long-term
potential contribution to the Company and the number of options previously
granted to the employee. Neither management nor the Compensation Committee
assigned specific weights to these factors, although the executive's
position and a subjective evaluation of his performance were considered
most important. Generally, the number of options granted to an executive
reflects his or her level of responsibility and position in the Company.
To encourage key employees to remain in the employ of the
Company, options generally vest and become exercisable over a three- or
four-year period and are not exercisable until one year after the date of
grant. It is expected that future awards under the 1997 LTIP will be made
periodically in furtherance of the goals described above.
BASE SALARY. The Compensation Committee believes that it is
important to pay reasonable and competitive salaries. Salaries paid to
executive officers are based on the Chief Executive Officer's
recommendations to the Compensation Committee, which is responsible for
reviewing and approving or disapproving those recommendations. Generally,
an executive's base salary reflects his level of responsibility and
position in the Company.
During 1999, each of the 9 executive officers (including
executive officers named in the Summary Compensation Table) received base
salary increases. The Committee based the increases upon each officer's
individual services rendered, level and scope of responsibility and
experience. The Committee also took into account the relationship of the
compensation of such officers to the compensation of officers occupying
comparable positions in other organizations.
ANNUAL INCENTIVE BONUS. The Annual Incentive Plan is intended to
provide a means of annually rewarding certain key employees, including the
executives listed in the Summary Compensation Table, based on the
performance of the Company. In addition, awards for each officer (other
than the Chief Executive Officer) may be adjusted based on the officer's
achievement of a personal performance percentage. This approach allows
management to focus on key business objectives in the short-term, and to
support the long-term performance orientation of stock ownership.
Under the Annual Incentive Plan, in 1999 management recommended,
and the Compensation Committee established, for each executive officer a
bonus target percentage of that officer's salary. That percentage was based
on the officer's position in the Company and was the percentage of the
officer's salary that would be paid if the performance targets were met.
The target award percentage for executive officers (other than the Chief
Executive Officer) for 1999 ranged from 30% to 60%. The target award
percentage for the Chief Executive Officer was 65%. Because the Company's
performance target for 1999 basic earnings per share was achieved, in 2000
bonus awards equal to 130% of each officers target award were paid with
respect to performance in 1999 (see "Summary Compensation Table - Bonus").
CHIEF EXECUTIVE OFFICER COMPENSATION. Frank M. Drendel has served
as Chairman and Chief Executive Officer of the Company since July 1997. In
1999, the Compensation Committee
13
recommended and the Board of Directors of the Company approved the increase
of Mr. Drendel's annual salary rate from $475,000 to $508,000, effective
March 1, 1999, and the continuation of his target bonus percentage under
the Annual Incentive Plan of 65%. The Compensation Committee recommended
and on December 15, 1999, Mr. Drendel was granted an option to purchase
56,300 shares of Common Stock with a per share exercise price of $38.375,
the closing market price of the Common Stock on the date of the grant.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M). Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), which
was enacted in 1993, generally disallows a federal income tax deduction to
any publicly held corporation for compensation paid in excess of $1 million
in any taxable year to the chief executive officer or any of the four other
most highly compensated executive officers who are employed by the Company
on the last day of the taxable year. Section 162(m), however, does not
disallow a federal income tax deduction for qualified "performance-based
compensation," the material terms of which are disclosed to and approved by
stockholders.
The Compensation Committee has considered the tax deductibility
of compensation awarded under the 1997 LTIP and the Annual Incentive Plan
in light of Section 162(m). The Company structured and intends to
administer the stock option, performance unit and performance share
portions of the 1997 LTIP with the intention that the resulting
compensation payable thereafter can qualify as "performance-based
compensation" and would be deductible. The Company has structured the
Annual Incentive Plan with the intention that awards payable thereafter to
the Chief Executive Officer qualify as "performance-based" compensation
and, if so qualified, would be deductible. No executive officer's
compensation in 1999 exceeded $1 million. It is not expected that any
executive officer's compensation will be non-deductible in 2000 by reason
of the application of Section 162(m).
Respectfully submitted,
COMPENSATION COMMITTEE
GEORGE N. HUTTON, JR., CHAIRMAN
DUNCAN M. FAIRCLOTH
14
PERFORMANCE GRAPH
The following graph compares cumulative total return on $100 invested
on July 28, 1997, the first day the Common Stock began trading after the
Spin-off, in each of the Common Stock, the Standard & Poor's 500 Stock
Index and the Standard & Poor's 600 Communication Equipment Index. The
return of the Standard & Poor's indices is calculated assuming reinvestment
of dividends. The Company has not paid any dividends. The stock price
performance shown on the graph below does not include "when-issued" trading
prior to the Spin-off and is not necessarily indicative of future price
performance.
[GRAPH: Comparison of Quarterly Cumulative Total
Return of CommScope, the S&P 500 Index, and the
S&P 600 Communication Equipment Index*]
COMPANY / INDEX 28-JUL-97 SEP 97 DEC 97 MAR 98 JUN 98 SEP 98 DEC 98 MAR 99 JUN 99 SEP 99 DEC 99
CommScope Inc 100 88.21 88.62 93.90 105.29 75.20 109.35 136.18 200.00 211.38 262.19
S&P 500 Index 100 100.58 103.47 117.90 121.79 109.68 133.04 139.66 149.51 140.17 161.03
S&P 600 Communication 100 116.74 90.22 102.37 82.30 59.91 74.18 58.87 78.44 85.90 133.13
Equipment Index
* $100 Invested on July 28, 1997 - including reinvestment of dividends.
15
BENEFICIAL OWNERSHIP OF COMMON STOCK
The table below sets forth information as to the beneficial
ownership of Common Stock as of March 21, 2000 (except as otherwise
specified) by all directors and the persons listed in the Summary
Compensation Table as well as by directors and executive officers of the
Company as a group and, to the best knowledge of the Company's management,
beneficial owners of 5% or more of the outstanding Common Stock.
Shares of Common % of Shares Outstanding
Name Stock Beneficially Owned(1) Beneficially Owned
-------------------------------- --------------------------- -------------------------
FMR Corp. (2) 3,448,926 6.8
Nicholas-Appelgate
Capital Management (3) 2,931,497 5.7
Edward D. Breen 14,333 *
Frank M. Drendel(4)(10) 768,025 1.5
Duncan M. Faircloth 7,666 *
Brian D. Garrett(5)(10) 206,718 *
Boyd L. George(6) 23,333 *
George N. Hutton, Jr. 14,666 *
Jearld L. Leonhardt(7)(10) 185,907 *
Larry W. Nelson(8)(10) 69,480 *
Gene W. Swithenbank(9)(10) 110,328 *
James N. Whitson 14,333 *
All current directors and
executive officers of the
Company as a group
(14 persons)(11)
1,687,611 3.3
<FN>
* The percentage of shares of the Common Stock beneficially owned does
not exceed one percent of the shares of Common Stock outstanding.
(1) For purposes of this table, a person or group of persons is deemed to
have "beneficial ownership" of any shares of Common Stock which such
person has the right to acquire within 60 days following March 21,
2000. For purposes of computing the percentage of outstanding shares
of Common Stock held by each person or group of persons named above,
any security which such person or persons has or have the right to
acquire within 60 days following March 21, 2000 is deemed to be
outstanding, but is not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person. The table does
not include shares of Common Stock subject to options to be awarded in
the future under the 1997 LTIP.
(2) This information is obtained from a Schedule 13G, dated February 14,
2000, filed with the Commission by: FMR Corp., a parent holding
company; Fidelity Management & Research Company, a wholly-owned
subsidiary of FMR Corp. and an investment advisor; Edward C. Johnson
3d ("Mr. Johnson") and Abigail P. Johnson ("Ms. Johnson"). FMR Corp.,
Mr. Johnson and Ms. Johnson each report beneficial ownership of
3,448,926 shares. FMR Corp. reports that it has sole voting power over
116,920 shares, no shared voting power and sole dispositive power over
3,448,926 shares. Mr. Johnson and Ms. Johnson each report no voting
power and sole dispositive power over 3,448,926 shares. The Schedule
13G states that through their ownership of voting common stock and the
execution of a shareholders' voting agreement, members of the Johnson
family may be deemed, under the Investment Company Act of 1940, to
form a controlling group
16
with respect to FMR Corp. FMR Corp's principal business office is
located at 82 Devonshire Street, Boston, Massachusetts 02109.
(3) This information is obtained from a Schedule 13G, dated February 10,
2000, filed with the Commission by Nicholas-Applegate Capital
Management ("Nicholas-Applegate"). The Schedule 13G states that
Nicholas-Applegate is a registered investment advisor. Nicholas
Applegate reports beneficial ownership of 2,931,497 shares, sole
voting power over 2,286,783 shares, no shared voting power, sole
dispositive power over 2,931,497 shares, and no shared dispositive
power. Nicholas-Applegate's principal business office is located at
600 West Broadway, Floor 29, San Diego, CA 92101.
(4) Includes 398,536 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 21, 2000. Also
includes 100 shares held by the spouse of Frank M. Drendel.
(5) Includes 169,520 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 21, 2000.
(6) Includes 2,000 shares of Common Stock held by the children of Boyd L.
George, as to which shares Boyd L. George disclaims beneficial
ownership.
(7) Includes 151,162 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 21, 2000. Also
includes 1,000 shares held by the spouse of Jearld L. Leonhardt.
(8) Includes 67,223 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 21, 2000.
(9) Includes 92,137 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 21, 2000.
(10) Includes the number of shares of Common Stock which were held by the
trustee of the Savings Plan and were allocated to the individual's
respective account under the Savings Plan as of February 29, 2000 as
follows: Frank M. Drendel, 639 shares; Brian D. Garrett, 590 shares;
Jearld L. Leonhardt, 1,296 shares; Larry W. Nelson, 1,091 shares; and
Gene W. Swithenbank, 4,425 shares.
(11) Includes 1,181,163 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 21, 2000. Includes
an aggregate of 14,442 shares of Common Stock which were held by the
trustees of the Savings Plan and were allocated to the current
officers' respective accounts under the Savings Plan as of February
29, 2000.
</FN>
17
PROPOSAL TWO: APPROVAL OF AN AMENDMENT TO THE AMENDED AND RESTATED
COMMSCOPE, INC. 1997 LONG-TERM INCENTIVE PLAN
GENERAL
The CommScope, Inc. 1997 Long-Term Incentive Plan was approved by the
Company's Board of Directors and GI Delaware, as sole stockholder of the
Company, prior to the Spin-off. The Board of Directors of the Company
approved an amendment and restatement of this plan, the Amended and
Restated CommScope, Inc. 1997 Long-Term Incentive Plan (the "1997 LTIP"),
on February 12, 1998. Stockholders of the Company approved the 1997 LTIP at
the Annual Meeting on May 1, 1998. The Board of Directors of the Company
approved an amendment to the 1997 LTIP (the "Amendment") on March 20, 2000
subject to stockholder approval at the Annual Meeting. The Amendment
increases the number of shares of Common Stock available for issuance upon
future grants of stock options under the plan by 2 million shares (the
"Additional Shares"). As of February 29, 2000, only approximately 1.5
million shares of Common Stock were available for future grant. The Company
believes that it is in the best interests of the Company to increase the
maximum number of shares that may be made subject to Awards under the 1997
LTIP in order (i) to continue to attract and retain key employees and (ii)
to provide additional incentive and reward opportunities to current
employees to encourage them to enhance the profitable growth of the
Company.
The 1997 LTIP provides for the granting of stock options, restricted
stock, performance units, performance shares, and phantom stock to
employees of the Company and its Subsidiaries and the granting of stock
options and stock awards to certain nonemployee directors (collectively or
individually, "Awards").
The Company now submits the Amendment for stockholder approval. If
such stockholder approval is not obtained, no Awards will be granted in
respect of Additional Shares.
The principal provisions of the 1997 LTIP are summarized below. This
summary, however, does not purport to be complete and is qualified in its
entirety by the terms of the 1997 LTIP as amended, included as Annex A to
this Proxy Statement. All capitalized terms used below and not defined
herein have the meaning set forth in the 1997 LTIP, unless otherwise
indicated.
PURPOSE OF THE 1997 LTIP
The Company's Board of Directors believes that Awards will provide a
means by which employees and directors of the Company and its Subsidiaries
can acquire and maintain stock ownership, thereby strengthening their
commitment to the success of the Company and its Subsidiaries and their
desire to remain employed by the Company and its Subsidiaries, focusing
their attention on managing the Company as equity owners, and aligning
their interest with those of the Company's stockholders. The 1997 LTIP is
also intended to attract and retain employees and to provide those
employees with additional incentive and reward opportunities designed to
encourage them to enhance the profitable growth of the Company and its
Subsidiaries.
DESCRIPTION OF THE 1997 LTIP
The 1997 LTIP must be administered by a committee (the "Committee")
consisting of at least two directors of the Company who are "nonemployee
directors' within the meaning of Rule 16b-3 promulgated under Section 16(b)
of the Exchange Act, and is currently administered by the Compensation
Committee. In addition, with respect to Awards to be granted to
participants who are not
18
subject to Section 16 of the Exchange Act, the authority of the Committee
may be exercised by the full Board or by a committee, consisting of at
least one individual, appointed by the Board. The Committee will (i) select
those employees to whom Awards will be granted, and (ii) determine the
type, size and the terms and conditions of Awards, including the per share
purchase price of restricted stock and Options, and the restrictions or
performance criteria relating to restricted stock, phantom stock,
performance units and performance shares. The Committee will also construe
and interpret the 1997 LTIP. The Committee will have the authority to
cancel outstanding Awards and make adjustments to outstanding Awards with
the consent of the Grantee and to accelerate the exercisability of Awards
or to waive the restrictions and conditions applicable to Awards.
The maximum number of shares of Common Stock that may be made the
subject of Options and Awards granted under the 1997 LTIP is 6.6 million
(in addition to the Substitute and Spin-off Options that, as described
below, were issued pursuant to the 1997 LTIP in connection with the
Spin-off); provided, however, that in the aggregate, not more than 200,000
shares of Common Stock may be made the subject of Awards other than
Options. The maximum number of Shares with respect to which Options (other
than Substitute and Spin-off Options) and Awards may be granted to any
individual in any three calendar year period is 500,000. The maximum dollar
amount of cash or the Fair Market Value of shares of Common Stock that may
be granted to any individual in any calendar year with respect to
Performance Units denominated in dollars may not exceed $1 million. In the
event of a Change in Capitalization, however, the Committee may adjust the
maximum number and class of shares which are subject to outstanding Awards
and the purchase price therefor. In addition, if any Award (including the
Substitute and Spin-off Options) is canceled or expires or terminates
without having been exercised, the shares of Common Stock subject to that
Company Award again become available for granting under the 1997 LTIP. If
any Option is exercised by tendering shares of Common Stock, either
actually or by attestation, to the Company as full or partial payment of
the exercise price, the maximum number of Shares available under the 1997
LTIP will be increased by the number of shares so tendered. In addition, if
any Award is canceled, is settled in cash (including the settlement of tax
withholding obligations using shares of Common Stock) or expires or
terminates without having been exercised, the shares subject to that Option
or Award again become available for grant under the 1997 LTIP.
ELIGIBILITY
Any of the Company's and its Subsidiaries' approximately 3,300
employees and any of the Company's nonemployee directors are eligible to
participate in the 1997 LTIP.
OPTIONS
Pursuant to the 1997 LTIP, the Committee will grant to each
nonemployee director of the Company Nonqualified Stock Options to purchase
20,000 shares of Common Stock in connection with his or her initial
election to the Board and an additional Option in respect of 20,000 shares
of Common Stock on each third anniversary of each nonemployee director's
first appointment to the Board, if such nonemployee director is still
serving on the Board ("Formula Director Options"). The per share exercise
price of the Formula Director Options is equal to 100% of the Fair Market
Value on the Grant Date. Each Formula Director Option will have a ten year
term and will become exercisable with respect to one-third of the
underlying shares on each of the first, second and third anniversaries of
the Grant Date. Except as otherwise provided in an option agreement, if a
nonemployee director ceases to serve as a director of the Company for any
reason, his or her Formula Director Options will be exercisable, during
their remaining terms, to the extent that they were exercisable on the date
the director ceased to serve as a director.
19
In addition, the Committee may grant Nonqualified Stock Options and
Incentive Stock Options to any eligible employee of the Company or its
Subsidiaries. The per share exercise price of the Options is fixed by the
Committee when the Options are granted and must be at least, and in the
case of Options granted to nonemployee directors will be, 100% of the Fair
Market Value of the Common Stock on the Option Grant Date (110% in the case
of an Incentive Stock Option granted to a 10% owner).
Each Option (other than Formula Director Options) will be exercisable
at the times and in the installments determined by the Committee,
commencing not earlier than the first anniversary of the Option Grant Date.
All outstanding Options will become fully exercisable upon a Change in
Control. A "Change of Control" under the 1997 LTIP means, generally: (i)
the acquisition by any person of beneficial ownership of voting securities
resulting in such person beneficially owning 33% or more of the combined
voting power of the Company's then outstanding voting securities; (ii) the
individuals who, as of July 23, 1997, the date the 1997 LTIP was adopted,
are members of the Board (the "Incumbent Board") cease for any reason to
constitute at least two-thirds of the Board; or (iii) approval by
stockholders of the Company of: (A) a merger, consolidation or
reorganization involving the Company unless: (1) the stockholders of the
Company, immediately before such merger, consolidation etc. own, following
such merger, consolidation or reorganization at least a majority of the
combined voting power of the outstanding voting securities of the
corporation resulting from such merger, consolidation or reorganization in
substantially the same proportion as before the merger, consolidation or
reorganization; and (2) the members of the Incumbent Board immediately
prior to the merger, consolidation or reorganization constitute at least a
majority of the Board of the surviving corporation; and (3) no person has
beneficial ownership of 33% or more of the combined voting power of the
surviving corporation's then outstanding voting securities; (B) a complete
liquidation or dissolution of the Company; or (C) the disposition of all or
substantially all of the assets of the Company.
In addition, the Committee reserves the authority to accelerate the
exercisability of any Option (other than Formula Director Options). Each
Option (other than Formula Director Options) terminates at the time
determined by the Committee, except that the term of each Option may not
exceed ten years (five years in the case of an Incentive Stock Option
granted to a 10% owner). Options are not transferable by the Grantee except
by will or the laws of descent and distribution or pursuant to a domestic
relations order (within the meaning of Rule 16a-12 promulgated under the
Exchange Act) and may be exercised during the Grantee's lifetime only by
the Grantee or the Grantee's guardian or legal representative; provided,
however, that the Committee may set forth in the Award Agreement evidencing
an Award (other than an Incentive Stock Option) at the time of the grant or
thereafter, that the Award 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. In the discretion of the Committee, the purchase price
for shares acquired pursuant to the exercise of an option may be paid (i)
in cash, (ii) by transferring shares of unrestricted Common Stock to the
Company, or (iii) by a combination of the foregoing.
RESTRICTED STOCK
The Committee will determine when each restricted stock Award is made,
the terms of the restricted stock Award, including the price, if any, to be
paid by the Grantee for the restricted stock, the restrictions placed on
the shares and the time or times when the restrictions will lapse,
provided, however, that, except in the case of shares of restricted stock
issued in full or partial settlement of another Award or other earned
compensation, or in the event of the Grantee's termination of employment,
as determined by the Committee and set forth in an Agreement, such
restrictions shall not lapse prior to the third anniversary of the Grant
Date. In addition, when restricted stock is granted under the 1997 LTIP,
the Committee may, in its discretion, decide: (i) whether dividends paid on
the restricted stock will be
20
remitted to the Grantee or deferred until the restrictions on the
restricted stock Award lapse; (ii) whether any deferred dividends will be
invested in additional shares of the Common Stock; (iii) whether interest
will be accrued on any dividends not reinvested in additional shares of
restricted stock; (iv) whether any dividends paid on the restricted stock
Award will be subject to the restrictions applicable to the restricted
stock Award; and (v) whether, and to what extent, the restrictions on the
restricted stock shall lapse upon a Change in Control.
PERFORMANCE UNITS AND PERFORMANCE SHARES
The Committee may grant performance units or performance shares to any
eligible individual. Before the grant of any performance unit or
performance share, the Committee will (i) designate a Measuring Period, of
not less than one year nor more than five years, for the measurement of the
extent to which performance goals are attained; (ii) determine performance
goals applicable to such grant; and (iii) assign a Performance Percentage
to each level of attainment of performance goals during the Measuring
Period. The performance goals applicable to performance units or
performance shares may, in the discretion of the Committee, be based on
earnings per share, operating income, return on equity or assets, cash
flow, EBITDA or any combination of the foregoing. Such performance goals
may be absolute or relative (to prior performance or to the performance of
one or more other entities or external indices) and may be expressed in
terms of a progression within a specified range. At the time of grant or at
any time thereafter, in either case to the extent permitted under Section
162(m) of the Code and the regulations thereunder without adversely
affecting the treatment of the performance unit or performance share as
Performance-Based Compensation, the Committee may provide for the manner in
which performance will be measured against the performance goals (or may
adjust the performance goals) to reflect the impact of specified corporate
transactions, special charges, foreign currency effects, accounting or tax
law changes and other extraordinary or nonrecurring events. Prior to the
vesting, payment, settlement or lapsing of any restrictions with respect to
any performance unit or performance share that is intended to constitute
Performance-Based Compensation made to a Grantee who is subject to Section
162(m) of the Code, the Committee shall certify in writing that the
applicable performance goals have been satisfied. The agreements evidencing
Awards of performance units and performance shares will set forth the terms
and conditions of Awards, including those applicable in the event of the
Grantee's Termination of Employment or a Change of Control. Performance
units may be denominated in dollars or in shares of Common Stock, and
payments in respect of vested performance units will be made in cash,
shares of Common Stock or any combination of the foregoing, as determined
by the Committee. Performance shares are initially denominated in shares of
Common Stock, but the Committee may ultimately settle performance share
Awards in cash, shares of Common Stock or a combination thereof, at its
discretion.
PHANTOM STOCK
The Committee may grant phantom stock to employees employed outside
the United States, subject to the terms and conditions established by the
Committee. Upon the vesting of a phantom stock Award, the Grantee will be
entitled to receive a cash payment in respect of each share of phantom
stock equal to the Fair Market Value of a share of Common Stock as of the
date the phantom stock Award was granted or such other date as determined
by the Committee when the phantom stock Award was granted. The Committee
may, when a phantom stock Award is granted, provide a limitation on the
amount payable in respect of each share of phantom stock.
21
TANDEM AWARDS
The 1997 LTIP provides that the Committee may grant any Award in
tandem with another Award. Unless otherwise provided by the Committee, upon
the exercise, payment or forfeiture of one tandem Award, the related tandem
Award will be canceled to the extent of the number of shares as to which
the tandem Award is so exercised, paid or forfeited.
AMENDMENT AND TERMINATION
The 1997 LTIP will terminate on July 23, 2007, the tenth anniversary
of its adoption. However, the Board of Directors may sooner terminate or
amend the 1997 LTIP at any time without stockholder approval, except where
stockholder approval is required to retain the favorable tax treatment of
Incentive Stock Options under the Code, to qualify the shares offered under
the 1997 LTIP for listing on any securities exchange, or as otherwise
required by law. The termination of the 1997 LTIP will not affect then
outstanding Awards.
SUBSTITUTE OPTIONS AND SPIN-OFF OPTIONS
On August 1, 1997, Substitute Options were issued under the 1997 LTIP
to officers, key employees and certain nonemployee directors of the Company
and Spin-off Options were issued to certain former directors of General
Instrument Corporation to replace options awarded under the General
Instrument Corporation 1993 Long-Term Incentive Plan. The terms and
conditions of each Substitute and Spin-off Option issued under the 1997
LTIP, including, without limitation, the time or times when, and the manner
in which, each shall be exercisable, the duration of the exercise period,
the permitted method of exercise, settlement and payment, and the rules
that shall apply in the event of termination of employment, were the same
as those of the surrendered award it replaced.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES RELATING TO AWARDS
UNDER THE 1997 LTIP
Incentive Stock Option ("ISO"). In general, a Grantee will not
recognize taxable income upon the grant or exercise of an ISO, and the
Company and its Subsidiaries will not be entitled to any business expense
deduction with respect to the grant or exercise of an ISO. (However, upon
the exercise of an ISO, the excess of the Fair Market Value on the date of
exercise of the shares received over the exercise price of the option will
be treated as an adjustment to alternative minimum taxable income.) In
order for the exercise of an ISO to qualify as an ISO, a Grantee generally
must be an employee of the Company or a subsidiary (within the meaning of
Section 422 of the Code) from the date the ISO is granted through the date
three months before the date of exercise (one year preceding the date of
exercise in the case of an Grantee whose employment is terminated due to
disability). The employment requirement does not apply where a Grantee's
employment is terminated due to his or her death.
If a Grantee has held the shares acquired upon exercise of an ISO for
at least two years after the date of grant and for at least one year after
the date of exercise, when the Grantee disposes of the shares, the
difference, if any, between the sales price of the shares and the exercise
price of the option will be treated as long-term capital gain or loss
subject to reduced rates of tax, provided that any gain will be subject to
further reduced rates of tax if shares are held for more than eighteen
months after the date of exercise. If a Grantee disposes of the shares
prior to satisfying these holding period requirements (a "Disqualifying
Disposition"), the Grantee will recognize ordinary income (treated as
compensation) at the time of the Disqualifying Disposition, generally in an
amount equal to the excess of the Fair Market Value of the shares at the
time the option was exercised over the exercise price of the option. The
balance of the gain realized, if any, will generally be capital gain. If
the Grantee sells the shares in a Disqualifying
22
Disposition at a price below the Fair Market Value of the shares at the
time the option was exercised, the amount of ordinary income (treated as
compensation) will be limited to the amount realized on the sale over the
exercise price of the option. In general, if the Company and its
Subsidiaries comply with applicable income reporting requirements, the
Company and its Subsidiaries will be allowed a business expense deduction
to the extent a Grantee recognizes ordinary income.
Nonqualified Stock Option. In general, a Grantee who receives a
Nonqualified Stock Option will recognize no income at the time of the grant
of the option. In general, upon exercise of a Nonqualified Stock Option, a
Grantee will recognize ordinary income (treated as compensation) in an
amount equal to the excess of the Fair Market Value of the shares on the
date of exercise over the exercise price of the option. The basis in shares
acquired upon exercise of a Nonqualified Stock Option will equal the Fair
Market Value of such shares at the time of exercise, and the holding period
of the shares (for capital gain purposes) will begin on the date of
exercise. In general, if the Company and its Subsidiaries comply with
applicable income reporting requirements, they will be entitled to a
business expense deduction in the same amount and at the same time as the
Grantee recognizes ordinary income. In the event of a sale of the shares
received upon the exercise of a Nonqualified Stock Option, any appreciation
or depreciation after the exercise date generally will be taxed as capital
gain or loss, provided that any gain will be subject to reduced rates of
tax if the shares were held for more than twelve months. Special rules may
apply with respect to persons who may be subject to Section 16(b) of the
Exchange Act.
Excise Taxes. Under certain circumstances, the accelerated vesting or
exercise of options in connection with a Change in Control might be deemed
an "excess parachute payment" for purposes of the golden parachute tax
provisions of Section 280G of the Code. To the extent it is so considered,
a Grantee may be subject to a 20% excise tax and the Company and its
Subsidiaries may be denied a tax deduction.
Section 162(m) of the Code generally disallows a federal income tax
deduction to any publicly-held corporation for compensation paid in excess
of $1 million in any taxable year to the chief executive officer or any of
the four other most highly compensated executive officers who are employed
by the Company on the last day of the taxable year, but does not disallow a
deduction for qualified "performance-based compensation," the material
terms of which are disclosed to and approved by stockholders. The Company
has structured the 1997 LTIP with the intention that compensation resulting
from the exercise of Options, and from performance shares and performance
units, can qualify as "performance-based compensation" and, if so
qualified, would be deductible. With respect to the Additional Shares such
treatment is subject to, among other things, stockholder approval of the
amendment of the 1997 LTIP to increase the number of shares of Common Stock
issuable pursuant thereto, and accordingly the Company is seeking such
approval.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL TWO, THE
AMENDMENT TO THE 1997 LTIP TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK
ISSUABLE PURSUANT THERETO. PROXIES WILL BE VOTED "FOR" APPROVAL OF THE
AMENDMENT OF THE 1997 LTIP UNLESS OTHERWISE SPECIFIED IN THE PROXY.
23
1999 AWARDS MADE UNDER THE 1997 LTIP
Grants under the 1997 LTIP are made at the discretion of the
Compensation Committee, and, accordingly, future grants under the 1997 LTIP
are not yet determinable. The following table sets forth information
concerning Options granted under the 1997 LTIP during the year ended
December 31, 1999. Such grants are not necessarily indicative of awards
that may be made in the future.
NEW PLAN BENEFITS
SHARES SUBJECT TO OPTIONS
NAME AND POSITION GRANTED UNDER
- ----------------- THE 1997 LTIP (#) (a)
---------------------
Frank M. Drendel
Chairman and Chief Executive Officer 56,300
Brian D. Garrett
President and Chief Operating Officer 32,650
Jearld L. Leonhardt
Executive Vice President and
Chief Financial Officer 22,500
Gene W. Swithenbank
Executive Vice President,
Sales & Marketing 15,000
Larry W. Nelson
Executive Vice President, Development 15,000
All current executive officers as a
group (includes 9 persons
including those named above) 190,000
All current directors (including
nominees for director) who
are not executive officers as a
group (5 persons) 20,000
All employees (other than current
executive officers and directors
who are not executive officers)
as a group who were granted options
under the 1997 LTIP (404 persons)
479,595
- --------------------------
(a) Represents options granted under the 1997 LTIP during the year ended
December 31, 1999.
The per share closing price of the Common Stock on March 21,
2000, as reported on the New York Stock Exchange Composite Tape, was
$44.
24
PROPOSAL THREE: RATIFICATION OF APPOINTMENT OF AUDITOR
The Board of Directors, based on the recommendation of the Audit
Committee, appointed the firm of Deloitte & Touche LLP as independent
auditor to examine the books of account and other records of the Company
and its consolidated subsidiaries for the 2000 fiscal year. The Board of
Directors is asking the stockholders to ratify and approve this action.
Deloitte & Touche LLP has been the Company's independent auditor since July
1997, and was the independent auditor of General Instrument Corporation
from 1991 until the Spin-off. Representatives of the auditing firm will be
present at the Annual Meeting and will be afforded the opportunity, if they
so desire, to make a statement or respond to appropriate questions that may
come before the Annual Meeting.
Although such ratification is not required by law, the Board of
Directors believes that stockholders should be given the opportunity to
express their views on the subject. While not binding on the Board of
Directors, the failure of the stockholders to ratify the appointment of
Deloitte & Touche LLP as the Company's independent auditor would be
considered by the Board of Directors in determining whether to continue
with the services of Deloitte & Touche LLP.
STOCKHOLDER PROPOSALS FOR THE COMPANY'S 2001 ANNUAL MEETING
Stockholders who intend to present proposals at the 2001 Annual
Meeting of Stockholders, and who wish to have such proposals included in
the proxy statement for such meeting, must submit such proposals in writing
by notice delivered or mailed by first-class United States mail, postage
prepaid, to the Secretary, CommScope, Inc., 1375 Lenoir-Rhyne Boulevard,
Hickory, North Carolina 28602, and such notice must be received no later
than November 27, 2000. Such proposals must meet the requirements set forth
in the rules and regulations of the Commission in order to be eligible for
inclusion in the Company's proxy statement for its 2001 Annual Meeting of
Stockholders.
In addition, under the Company's By-laws, stockholders must
comply with specified procedures to nominate directors or introduce an item
of business at the Annual Meeting. Nominations or an item of business to be
introduced at an annual meeting must be submitted in writing and received
by the Company generally not less than 60 days nor more than 90 days in
advance of an annual meeting. To be in proper written form, a stockholder's
notice must contain the specific information required by the Company's
By-laws. A copy of the Company's By-laws, which describes the advance
notice procedures, can be obtained from the Secretary of the Company.
SOLICITATION OF PROXIES
Proxies will be solicited electronically, by mail, telephone, or
other means of communication. Solicitation of proxies also may be made by
directors, officers and regular employees of the Company. The Company has
retained Morrow & Co., Inc. to assist in the solicitation of proxies from
stockholders. Morrow & Co., Inc. will receive a fee of $5,500 plus
reimbursement of certain out-of-pocket expenses. The Company will reimburse
brokerage firms, custodians, nominees and fiduciaries in accordance with
the rules of the NYSE, for reasonable expenses incurred by them in
forwarding materials to the beneficial owners of shares. The entire cost of
solicitations will be borne by the Company.
25
OTHER MATTERS
The Company knows of no other matter to be brought before the
Annual Meeting. If any other matter requiring a vote of the stockholders
should come before the Annual Meeting, it is the intention of the persons
named in the proxy to vote with respect to any such matter in accordance
with their best judgment.
The Company will furnish, without charge, to each person whose
proxy is being solicited upon written request, a copy of its Annual Report
on Form 10-K for the fiscal year ended December 31, 1999, as filed with the
Commission (excluding exhibits). Copies of any exhibits thereto also will
be furnished upon the payment of a reasonable duplicating charge. Requests
in writing for copies of any such materials should be directed to
CommScope, Inc., 1375 Lenoir-Rhyne Boulevard, Hickory, North Carolina
28602, Attention: Investor Relations.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Frank B. Wyatt, II
Frank B. Wyatt, II
Secretary
Dated: March 30, 2000
Hickory, North Carolina
26
ANNEX A
AMENDED AND RESTATED
COMMSCOPE, INC.
1997 LONG-TERM INCENTIVE PLAN
(AS AMENDED THROUGH MARCH 20, 2000)
TABLE OF CONTENTS
Page
----
1. Establishment, Purpose and Effective Date...........................1
(a) Establishment..................................................1
(b) Purpose........................................................1
(c) Effective Date.................................................1
2. Definitions.........................................................1
3. Scope of the Plan...................................................5
(a) Number of Shares Available Under the Plan......................5
(b) Reduction in the Available Shares in Connection
with Award Grants..............................................6
(c) Effect of the Expiration or Termination of Awards..............6
4. Administration......................................................6
(a) Committee Administration.......................................6
(b) Board Reservation and Delegation...............................7
(c) Committee Authority............................................7
(d) Committee Determinations Final.................................8
5. Eligibility.........................................................8
6. Conditions to Grants................................................8
(a) General Conditions.............................................8
(b) Grant of Options and Option Price..............................8
(c) Grant of Incentive Stock Options...............................9
(d) Grant of Shares of Restricted Stock...........................10
(e) Grant of Performance Units and Performance Shares.............12
(f) Grant of Phantom Stock........................................13
(g) Grant of Director's Shares....................................13
(h) Tandem Awards.................................................13
7. Non-transferability................................................13
8. Exercise...........................................................13
(a) Exercise of Options...........................................13
(b) Exercise of Performance Units.................................14
(c) Payment of Performance Shares.................................15
(d) Payment of Phantom Stock Awards...............................15
(e) Exercise, Cancellation, Expiration or Forfeiture
of Tandem Awards..............................................16
A-i
Page
----
9. Spin-off and Substitute Options....................................16
10. Effect of Certain Transactions.....................................16
11. Mandatory Withholding Taxes........................................16
12. Termination of Employment..........................................16
13. Securities Law Matters.............................................17
14. No Funding Required................................................17
15. No Employment Rights...............................................17
16. Rights as a Stockholder............................................17
17. Nature of Payments.................................................17
18. Non-Uniform Determinations.........................................18
19. Adjustments........................................................18
20. Amendment of the Plan..............................................18
21. Termination of the Plan............................................19
22. No Illegal Transactions............................................19
23. Governing Law......................................................19
24. Severability.......................................................19
A-ii
1. Establishment, Purpose and Effective Date.
(a) Establishment. The Company hereby establishes the Amended and
Restated CommScope, Inc. 1997 Long-Term Incentive Plan (as set forth herein
and from time to time amended, the "Plan").
(b) Purpose. The primary purpose of the Plan is to provide a
means by which key employees and directors of the Company and its
Subsidiaries can acquire and maintain stock ownership, thereby
strengthening their commitment to the success of the Company and its
Subsidiaries and their desire to remain employed by the Company and its
Subsidiaries, focusing their attention on managing the Company as an equity
owner, and aligning their interests with those of the Company's
stockholders. The Plan also is intended to attract and retain key employees
and to provide such employees with additional incentive and reward
opportunities designed to encourage them to enhance the profitable growth
of the Company and its Subsidiaries.
(c) Effective Date. The Plan shall become effective upon its
adoption by the Board.
2. Definitions.
As used in the Plan, terms defined parenthetically immediately after
their use shall have the respective meanings provided by such definitions
and the terms set forth below shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of
the terms defined):
(a) "Award" means Options, shares of restricted Stock,
performance units, performance shares or Director's Shares
granted under the Plan.
(b) "Award Agreement" means the written agreement by which an
Award is evidenced.
(c) "Beneficial Owner," "Beneficially Owned" and "Beneficially
Owning" shall have the meanings applicable under Rule 13d-3
promulgated under the 1934 Act.
(d) "Board" means the board of directors of the Company.
(e) "Change in Capitalization" means any increase or reduction
in the number of shares of Stock, or any change in the
shares of Stock or exchange of shares of Stock for a
different number or kind of shares or other securities by
reason of a stock dividend, extraordinary dividend, stock
split, reverse stock split, share combination,
reclassification, recapitalization, merger, consolidation,
spin-off, split-up, reorganization, issuance of warrants or
rights, liquidation, exchange of shares, repurchase of
shares, change in corporate structure, or similar event, of
or by the Company.
(f) "Change of Control" means, any of the following:
(i) the acquisition by any Person of Beneficial Ownership of
Voting Securities which, when added to the Voting Securities then
Beneficially Owned by such Person, would result in such Person
Beneficially Owning 33% or more of the combined
Voting Power of the Company's then outstanding Voting Securities;
provided, however, that for purposes of this paragraph (i), a
Person shall not be deemed to have made an acquisition of Voting
Securities if such Person: (1) acquires Voting Securities as a
result of a stock split, stock dividend or other corporate
restructuring in which all stockholders of the class of such
Voting Securities are treated on a pro rata basis; (2) acquires
the Voting Securities directly from the Company; (3) becomes the
Beneficial Owner of 33% or more of the combined Voting Power of
the Company's then outstanding Voting Securities solely as a
result of the acquisition of Voting Securities by the Company or
any Subsidiary which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by such Person, provided that if (x) a Person
would own at least such percentage as a result of the acquisition
by the Company or any Subsidiary and (y) after such acquisition
by the Company or any Subsidiary, such Person acquires Voting
Securities, then an acquisition of Voting Securities shall have
occurred; (4) is the Company or any corporation or other Person
of which a majority of its voting power or its equity securities
or equity interest is owned directly or indirectly by the Company
(a "Controlled Entity"); or (5) acquires Voting Securities in
connection with a "Non-Control Transaction" (as defined in
paragraph (iii) below); or
(ii) 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 Board; provided,
however, that if either the election of any new director or the
nomination for election of any new director by the Company's
stockholders was approved by a vote of at least two-thirds of the
Incumbent Board prior to such election or nomination, such new
director shall be considered as a member of the Incumbent Board;
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 either an actual or threatened
"Election Contest" (as described in Rule 14a-11 promulgated under
the 1934 Act) or other 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 Election Contest or Proxy
Contest; or
(iii) approval by stockholders of the Company of:
(A) a merger, consolidation or reorganization involving
the Company (a "Business Combination"), unless
(1) the stockholders of the Company, immediately
before the Business Combination, own, directly or
indirectly immediately following the Business
Combination, at least a majority of the combined voting
power of the outstanding voting securities of the
corporation resulting from the Business Combination
(the "Surviving Corporation") in substantially the same
proportion as their ownership of the Voting Securities
immediately before the Business Combination, and
(2) the individuals who were members of the
Incumbent Board immediately prior to the execution of
the agreement providing for the Business Combination
constitute at least a majority of the members of the
Board of Directors of the Surviving Corporation, and
A-2
(3) no Person (other than the Company or any
Controlled Entity, a trustee or other fiduciary holding
securities under one or more employee benefit plans or
arrangements (or any trust forming a part thereof)
maintained by the Company, the Surviving Corporation or
any Controlled Entity, or any Person who, immediately
prior to the Business Combination, had Beneficial
Ownership of 33% or more of the then outstanding Voting
Securities) has Beneficial Ownership of 33% or more of
the combined voting power of the Surviving
Corporation's then outstanding voting securities (a
Business Combination satisfying the conditions of
clauses (1), (2) and (3) of this subparagraph (A) shall
be referred to as a "Non-Control Transaction");
(B) a complete liquidation or dissolution of the
Company; or
(C) the sale or other disposition of all or
substantially all of the assets of the Company (other than a
transfer to a Controlled Entity).
Notwithstanding the foregoing, a Change of Control shall not be deemed
to occur solely because 33% or more of the then outstanding Voting
Securities is Beneficially Owned by (x) a trustee or other fiduciary
holding securities under one or more employee benefit plans or arrangements
(or any trust forming a part thereof) maintained by the Company or any
Controlled Entity or (y) any corporation which, immediately prior to its
acquisition of such interest, is owned directly or indirectly by the
stockholders of the Company in the same proportion as their ownership of
stock in the Company immediately prior to such acquisition.
(g) "Committee" means the committee of the Board appointed
pursuant to Article 4.
(h) "Company" means CommScope, Inc., a Delaware
corporation.
(i) "Director's Shares" means the shares of Stock awarded
to a nonemployee director of the Company pursuant to
Article 6(h).
(j) "Disability" means a mental or physical condition
which, in the opinion of the Committee, renders a
Grantee unable or incompetent to carry out the job
responsibilities which such Grantee held or the duties
to which such Grantee was assigned at the time the
disability was incurred, and which is expected to be
permanent or for an indefinite duration.
(k) "Effective Date" means the date that the Plan is
adopted by the Board.
(l) "Fair Market Value" of any security of the Company or
any other issuer means, as of any applicable date:
(i) if the security is listed for trading on the New
York Stock Exchange, the closing price, regular way, of the
security as reported on the New York Stock Exchange
Composite Tape, or if no such reported sale of the security
shall have occurred on such date, on the next preceding date
on which there was such a reported sale, or
(ii) if the security is not so listed, but is listed on
another national securities exchange or authorized for
quotation on the National Association of Securities Dealers
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Inc.'s NASDAQ National Market System ("NASDAQ/NMS"), the
closing price, regular way, of the security on such exchange
or NASDAQ/NMS, as the case may be, or if no such reported
sale of the security shall have occurred on such date, on
the next preceding date on which there was such a reported
sale, or
(iii) if the security is not listed for trading on a
national securities exchange or authorized for quotation on
NASDAQ/NMS, the average of the closing bid and asked prices
as reported by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or, if no such
prices shall have been so reported for such date, on the
next preceding date for which such prices were so reported,
or
(iv) if the security is not listed for trading on a
national securities exchange or is not authorized for
quotation on NASDAQ/NMS or NASDAQ, the fair market value of
the security as determined in good faith by the Committee.
(m) "Grant Date" means the date of grant of an Award
determined in accordance with Article 6.
(n) "Grantee" means an individual who has been granted an
Award.
(o) "Incentive Stock Option" means an Option satisfying the
requirements of Section 422 of the Internal Revenue
Code and designated by the Committee as an Incentive
Stock Option.
(p) "Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended, and regulations and rulings
thereunder. References to a particular Section of the
Internal Revenue Code shall include references to
successor provisions.
(q) "Measuring Period" has the meaning specified in Article
6(f)(ii)(B).
(r) "Minimum Consideration" means the $.0l par value per
share of Stock or such larger amount determined
pursuant to resolution of the Board to be capital
within the meaning of Section 154 of the Delaware
General Corporation Law.
(s) "1934 Act" means the Securities Exchange Act of 1934,
as amended.
(t) "Nonqualified Stock Option" means an Option which is
not an Incentive Stock Option or other type of
statutory stock option under the Internal Revenue Code.
(u) "Option" means an option to purchase Stock granted or
issued under the Plan, including Substitute and
Spin-off Options.
(v) "Option Price" means the per share purchase price of
(i) Stock subject to an Option or (ii) restricted Stock
subject to an Option.
(w) "Performance-Based Compensation" means any Option or
Award that is intended to constitute "performance based
compensation" within the meaning of Section
162(m)(4)(C) of the Code and the regulations
promulgated thereunder.
(x) "Performance Percentage" has the meaning specified in
Article 6(f)(ii)(C).
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(y) "Person" means a person within the meaning of Sections
13(d) and 14(d) of the 1934 Act.
(z) "Plan" has the meaning set forth in Article 1(a).
(aa) "SEC" means the Securities and Exchange Commission.
(bb) "Section 16 Grantee" means a person subject to
potential liability with respect to equity securities
of the Company under Section 16(b) of the 1934 Act.
(cc) "Spin-off Option" means an Option that has been issued
under this Plan to certain named persons pursuant to
the Employee Benefits Allocation Agreement between
General Semiconductor, Inc. ("GS"), CommScope, Inc. and
the Company, dated June 25, 1997, as amended, modified,
or otherwise supplemented (the "Benefits Agreement").
(dd) "Stock" means common stock, par value $.01 per share,
of the Company.
(ee) "Subsidiary" means a corporation as defined in Section
424(f) of the Internal Revenue Code, with the Company
being treated as the employer corporation for purposes
of this definition.
(ff) "Substitute Option" means an Option that has been
issued under this Plan to certain persons pursuant to
the Benefits Agreement.
(gg) "10% Owner" means a person who owns stock (including
stock treated as owned under Section 424(d) of the
Internal Revenue Code) possessing more than 10% of the
Voting Power of the Company.
(hh) "Termination of Employment" occurs the first day on
which an individual is for any reason no longer
employed by the Company or any of its Subsidiaries, or
with respect to an individual who is an employee of a
Subsidiary, the first day on which the Company no
longer owns Voting Securities possessing at least 50%
of the Voting Power of such Subsidiary.
(ii) "Voting Power" means the combined voting power of the
then outstanding Voting Securities.
(jj) "Voting Securities" means, with respect to the Company
or any Subsidiary, any securities issued by the Company
or such Subsidiary, respectively, which generally
entitle the holder thereof to vote for the election of
directors of the Company.
3. Scope of the Plan.
(a) Number of Shares Available Under the Plan. The maximum
number of shares of Stock that may be made the subject of Awards granted
under the Plan is 6,600,000 plus the number of shares of Stock that are
covered by Substitute Options and Spin-off Options (or the number and kind
of shares of Stock or other securities to which such shares of Stock are
adjusted upon a Change in Capitalization pursuant to Article 18); provided,
however, that in the aggregate, not more than 200,000
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shares of Stock may be made the subject of Awards other than Options. The
maximum number of shares of Stock that may be the subject of Options (other
than Substitute Options and Spin-off Options) and Awards granted to any
individual pursuant to the Plan in any three (3) calendar year period may
not exceed 500,000. The maximum dollar amount of cash or the Fair Market
Value of Stock that any individual may receive in any calendar year in
respect of performance units denominated in dollars may not exceed
$1,000,000. The Company shall reserve for the purpose of the Plan, out of
its authorized but unissued shares of Stock or out of shares held in the
Company's treasury, or partly out of each, such number of shares as shall
be determined by the Board. The Board shall have the authority to cause the
Company to purchase from time to time shares of Stock to be held as
treasury shares and used for or in connection with Awards. The issuance of
Substitute Options and Spin-off Options shall not reduce the shares
available for grants under the Plan or to a Grantee in any calendar year.
(b) Reduction in the Available Shares in Connection with
Award Grants. Upon the grant of an Award, the number of shares of Stock
available under Article 3(a) for the granting of further Awards shall be
reduced as follows:
(i) Performance Units Denominated in Dollars. In
connection with the granting of each performance unit
denominated in dollars, the number of shares of Stock
available under Article 3(a) for the granting of further
Awards shall be reduced by the quotient of (x) the dollar
amount represented by the performance unit divided by (y)
the Fair Market Value of a share of Stock on the date
immediately preceding the Grant Date of the performance
unit.
(ii) Other Awards. In connection with the granting of
each Award, other than a performance unit denominated in
dollars, the number of shares of Stock available under
Article 3(a) for the granting of further Awards shall be
reduced by a number of shares equal to the number of shares
of Stock in respect of which the Award is granted or
denominated; provided, however, that if any Award is
exercised by tendering shares of Stock, either actually or
by attestation, to the Company as full or partial payment of
the exercise price, the maximum number of shares of Stock
available under Section 3(a) shall be increased by the
number of shares of Stock so tendered.
Notwithstanding the foregoing, where two or more Awards are
granted with respect to the same shares of Stock, such shares shall be
taken into account only once for purposes of this Article 3(b).
(c) Effect of the Expiration or Termination of Awards. If
and to the extent an Option or Award (including a Substitute Option or a
Spin-off Option) expires, terminates or is canceled, settled in cash
(including the settlement of tax withholding obligations using shares of
Stock) or forfeited for any reason without having been exercised in full
(including, without limitation, a cancellation of an Option pursuant to
Article 4(c)(vi)), the shares of Stock associated with the expired,
terminated, canceled, settled or forfeited portion of the Award (to the
extent the number of shares available for the granting of Awards was
reduced pursuant to Article 3(b)) shall again become available for Awards
under the Plan.
4. Administration.
(a) Committee Administration. Subject to Article 4(b), the
Plan shall be administered by the Committee, which shall consist of not
less than two "non-employee directors" within the meaning of Rule 16b-3,
and to the extent necessary for any Award intended to qualify
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as Performance-Based Compensation to so qualify, each member of the
Committee shall be an "outside director" within the meaning of Section
162(m) of the Internal Revenue Code.
(b) Board Reservation and Delegation. The Board may, in its
discretion, reserve to itself or exercise any or all of the authority and
responsibility of the Committee hereunder. It may also delegate to another
committee of the Board any or all of the authority and responsibility of
the Committee with respect to Awards to Grantees who are not Section 16
Grantees at the time any such delegated authority or responsibility is
exercised. Such other committee may consist of one or more directors who
may, but need not be, officers or employees of the Company or of any of its
Subsidiaries. To the extent that the Board has reserved to itself, or
exercised the authority and responsibility of the Committee, or delegated
the authority and responsibility of the Committee to such other committee,
all references to the Committee in the Plan shall be to the Board or to
such other committee.
(c) Committee Authority. The Committee shall have full and
final authority, in its discretion, but subject to the express provisions
of the Plan, as follows:
(i) to grant Awards,
(ii) to determine (A) when Awards may be granted, and
(B) whether or not specific Awards shall be identified with
other specific Awards, and if so, whether they shall be
exercisable cumulatively with, or alternatively to, such
other specific Awards,
(iii) to issue Substitute Options and Spin-off Options,
(iv) to interpret the Plan and to make all
determinations necessary or advisable for the administration
of the Plan,
(v) to prescribe, amend, and rescind rules and
regulations relating to the Plan, including, without
limitation, rules with respect to the exercisability and
nonforfeitability of Awards upon the Termination of
Employment of a Grantee,
(vi) to determine the terms and provisions of the Award
Agreements, which need not be identical and, with the
consent of the Grantee, to modify any such Award Agreement
at any time,
(vii) to cancel, with the consent of the Grantee,
outstanding Awards,
(viii) to accelerate the exercisability of, and to
accelerate or waive any or all of the restrictions and
conditions applicable to, any Award,
(ix) to make such adjustments or modifications to
Awards to Grantees working outside the United States as are
necessary and advisable to fulfill the purposes of the Plan,
(x) to authorize any action of or make any
determination by the Company as the Committee shall deem
necessary or advisable for carrying out the purposes of the
Plan, and
(xi) to impose such additional conditions,
restrictions, and limitations upon the grant, exercise or
retention of Awards as the Committee may, before or
concurrently
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with the grant thereof, deem appropriate, including, without
limitation, requiring simultaneous exercise of related
identified Awards, and limiting the percentage of Awards
which may from time to time be exercised by a Grantee.
(d) Committee Determinations Final. The determination of the
Committee on all matters relating to the Plan or any Award Agreement shall
be conclusive and final. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Award.
5. Eligibility.
Awards may be granted to any employee of the Company or any of
its Subsidiaries. In selecting the individuals to whom Awards may be
granted, as well as in determining the number of shares of Stock subject
to, and the other terms and conditions applicable to, each Award, the
Committee shall take into consideration such factors as it deems relevant
in promoting the purposes of the Plan. In addition, Nonqualified Stock
Options will be granted to nonemployee directors of the Company, as set
forth in Article 6(b)(ii), and Director's Shares will be issued to
nonemployee directors of the Company pursuant to Article 6(h).
6. Conditions to Grants.
(a) General Conditions.
(i) The Grant Date of an Award shall be the date on
which the Committee grants the Award or such later date as
specified in advance by the Committee.
(ii) The term of each Award (subject to Article 6(c)
with respect to Incentive Stock Options) shall be a period
of not more than ten years from the Grant Date and shall be
subject to earlier termination as provided herein or in the
applicable Award Agreement; provided, however, that the
Committee may provide that an Option (other than an
Incentive Stock Option) may, upon the death of the Grantee,
be exercised for up to one year following the date of the
Grantee's death even if such period extends beyond ten years
from the date the Option is granted.
(iii) A Grantee may, if otherwise eligible, be granted
additional Awards in any combination.
(iv) The Committee may grant Awards with terms and
conditions which differ among the Grantees thereof. To the
extent not set forth in the Plan, the terms and conditions
of each Award shall be set forth in an Award Agreement.
(b) Grant of Options and Option Price. The Committee may, in
its discretion, and shall as provided in Article 6(b)(ii), grant Options as
follows:
(i) Employee Options. Options to acquire unrestricted
Stock or restricted Stock may be granted to any employee
eligible under Article 5 to receive Awards. No later than
the Grant Date of any Option, the Committee shall determine
the Option Price which shall not be less than 100% of the
Fair Market Value of the Stock on the Grant Date.
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(ii) Nonemployee Director Options. Nonqualified Stock
Options with respect to 20,000 shares of unrestricted Stock
shall be granted to each nonemployee director of the Company
upon his or her initial election to the Board and every
three years thereafter on the anniversary of such
nonemployee director's initial election to the Board as long
as such nonemployee director is then still serving on the
Board, at an Option Price equal to 100% of the Fair Market
Value of the Stock on the Grant Date; provided, however,
that the Grant Date of the first grants of Nonqualified
Stock Options to nonemployee directors under this Plan shall
be the fifth trading day after the NextLevel Systems
Distribution Date (as defined in the Benefits Agreement).
Each Nonqualified Stock Option granted to a nonemployee
director will become exercisable with respect to one-third
of the underlying shares on each of the first, second and
third anniversaries of the Grant Date, and will have a term
of ten years. If a nonemployee director ceases to serve as a
director of the Company for any reason, any Nonqualified
Stock Option granted to such nonemployee director shall be
exercisable during its remaining term, to the extent that
such Nonqualified Stock Option was exercisable on the date
such nonemployee director ceased to be a director.
(c) Grant of Incentive Stock Options. At the time of the
grant of any Option, the Committee may designate that such Option shall be
an Incentive Stock Option. Any Option designated as an Incentive Stock
Option:
(i) shall have an Option Price of (A) not less than
100% of the Fair Market Value of the Stock on the Grant Date
or (B) in the case of a 10% Owner, not less than 110% of the
Fair Market Value of the Stock on the Grant Date;
(ii) shall have a term of not more than ten years (five
years, in the case of a 10% Owner) from the Grant Date, and
shall be subject to earlier termination as provided herein
or in the applicable Award Agreement;
(iii) shall, if, with respect to any grant, the
aggregate Fair Market Value of Stock (determined on the
Grant Date) of all Incentive Stock Options granted under the
Plan and "incentive stock options" (within the meaning of
Section 422 of the Code) granted under any other stock
option plan of the Grantee's employer or any parent or
subsidiary thereof (in either case determined without regard
to this Article 6(c)) are exercisable for the first time
during any calendar year exceeds $100,000, be treated as
Nonqualified Stock Options. For purposes of the foregoing
sentence, Incentive Stock Options shall be treated as
Nonqualified Stock Options according to the order in which
they were granted such that the most recently granted
Incentive Stock Options are first treated as Nonqualified
Stock Options.
(iv) shall be granted within ten years from the earlier
of the date the Plan is adopted by the Board or the date the
Plan is approved by the stockholders of the Company; and
(v) shall require the Grantee to notify the Committee
of any disposition of any Stock issued pursuant to the
exercise of the Incentive Stock Option under the
circumstances described in Section 421(b) of the Internal
Revenue Code (relating to certain disqualifying
dispositions), within ten days of such disposition.
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(d) Grant of Shares of Restricted Stock.
(i) The Committee may, in its discretion, grant shares
of restricted Stock to any employee eligible under Article 5
to receive Awards.
(ii) Before the grant of any shares of restricted
Stock, the Committee shall determine, in its discretion:
(A) whether the certificates for such shares shall
be delivered to the Grantee or held (together with a
stock power executed in blank by the Grantee) in escrow
by the Secretary of the Company until such shares
become nonforfeitable or are forfeited;
(B) the per share purchase price of such shares,
which may be zero; provided, however, that the per
share purchase price of all such shares (other than
treasury shares) shall not be less than the Minimum
Consideration for each such share;
(C) the restrictions applicable to such grant and
the time or times upon which any applicable
restrictions on the restricted Stock shall lapse;
provided, however, that except in the case of shares of
restricted Stock issued in full or partial settlement
of another Award or other earned compensation, or in
the event of the Grantee's termination of employment,
as determined by the Committee and set forth in an
Award Agreement, such restrictions shall not lapse
prior to the third anniversary of the Grant Date of the
restricted Stock; and
(D) whether the payment to the Grantee of
dividends, or a specified portion thereof, declared or
paid on such shares by the Company shall be deferred
until the lapsing of the restrictions imposed upon such
shares and shall be held by the Company for the account
of the Grantee, whether such dividends shall be
reinvested in additional shares of restricted Stock (to
the extent shares are available under Article 3)
subject to the same restrictions and other terms as
apply to the shares with respect to which such
dividends are issued or otherwise reinvested in Stock
or held in escrow, whether interest will be credited to
the account of the Grantee with respect to any
dividends which are not reinvested in restricted or
unrestricted Stock, and whether any Stock dividends
issued with respect to the restricted Stock to be
granted shall be treated as additional shares of
restricted Stock.
(iii) Payment of the purchase price (if greater than
zero) for shares of restricted Stock shall be made in full
by the Grantee before the delivery of such shares and, in
any event, no later than ten days after the Grant Date for
such shares. Such payment may be made, as determined by the
Committee in its discretion, in any one or any combination
of the following:
(A) cash; or
(B) with the prior approval of the Committee,
shares of restricted or unrestricted Stock owned by the
Grantee prior to such grant and valued at its
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Fair Market Value on the business day immediately
preceding the date of payment;
provided, however, that, in the case of payment in shares of
restricted or unrestricted Stock, if the purchase price for
restricted Stock ("New Restricted Stock") is paid with
shares of restricted Stock ("Old Restricted Stock"), the
restrictions applicable to the New Restricted Stock shall be
the same as if the Grantee had paid for the New Restricted
Stock in cash unless, in the judgment of the Committee, the
Old Restricted Stock was subject to a greater risk of
forfeiture, in which case a number of shares of New
Restricted Stock equal to the number of shares of Old
Restricted Stock tendered in payment for New Restricted
Stock shall be subject to the same restrictions as the Old
Restricted Stock, determined immediately before such
payment.
(iv) The Committee may, but need not, provide that all
or any portion of a Grantee's Award of restricted Stock
shall be forfeited:
(A) except as otherwise specified in the Award
Agreement, upon the Grantee's Termination of Employment
within a specified time period after the Grant Date; or
(B) if the Company or the Grantee does not achieve
specified performance goals within a specified time
period after the Grant Date and before the Grantee's
Termination of Employment; or
(C) upon failure to satisfy such other
restrictions as the Committee may specify in the Award
Agreement.
(v) If a share of restricted Stock is forfeited, then:
(A) the Grantee shall be deemed to have resold
such share of restricted Stock to the Company at the
lesser of (1) the purchase price paid by the Grantee
(such purchase price shall be deemed to be zero dollars
($0) if no purchase price was paid) or (2) the Fair
Market Value of a share of Stock on the date of such
forfeiture;
(B) the Company shall pay to the Grantee the
amount determined under clause (A) of this sentence, if
not zero, as soon as is administratively practicable,
but in any case within 90 days after forfeiture; and
(C) such share of restricted Stock shall cease to
be outstanding, and shall no longer confer on the
Grantee thereof any rights as a stockholder of the
Company, from and after the date of the Company's
tender of the payment specified in clause (B) of this
sentence, whether or not such tender is accepted by the
Grantee, or the date the restricted Stock is forfeited
if no purchase price was paid for the restricted Stock.
(vi) Any share of restricted Stock shall bear an
appropriate legend specifying that such share is
non-transferable and subject to the restrictions set forth
in the Plan and the Award Agreement. If any shares of
restricted Stock become nonforfeitable, the Company shall
cause certificates for such shares to be issued or reissued
without such
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legend and delivered to the Grantee or, at the request of
the Grantee, shall cause such shares to be credited to a
brokerage account specified by the Grantee.
(e) Grant of Performance Units and Performance Shares.
(i) The Committee may, in its discretion, grant
performance units or performance shares to any employee
eligible under Article 5 to receive Awards.
(ii) Before the grant of any performance unit or
performance share, the Committee shall:
(A) designate a period, of not less than one year
nor more than five years, for the measurement of the
extent to which performance goals are attained (the
"Measuring Period");
(B) determine performance goals applicable to such
grant; provided, however, that the performance goals
with respect to a Measuring Period shall be established
in writing by the Committee by the earlier of (x) the
date on which a quarter of the Measuring Period has
elapsed or (y) the date which is ninety (90) days after
the commencement of the Measuring Period, and in any
event while the performance relating to the performance
goals remain substantially uncertain; and
(C) assign a "Performance Percentage" to each
level of attainment of performance goals during the
Measuring Period, with the percentage applicable to
minimum attainment being zero percent (0%) and the
percentage applicable to optimum attainment to be
determined by the Committee from time to time.
(iii) The performance goals applicable to performance
units or performance shares shall, in the discretion of the
Committee, be based on stock price, earnings per share,
operating income, return on equity or assets, cash flow,
EBITDA or any combination of the foregoing. Such performance
goals may be absolute or relative (to prior performance or
to the performance of one or more other entities or external
indices) and may be expressed in terms of a progression
within a specified range. At the time of the granting of
performance units or performance shares, or at any time
thereafter, in either case to the extent permitted under
Section 162(m) of the Code and the regulations thereunder
without adversely affecting the treatment of the performance
unit or performance share as Performance-Based Compensation,
the Committee may provide for the manner in which
performance will be measured against the performance goals
(or may adjust the performance goals) to reflect the impact
of specified corporate transactions, special charges,
foreign currency effects, accounting or tax law changes and
other extraordinary or nonrecurring events.
(iv) Prior to the vesting, payment, settlement or
lapsing of any restrictions with respect to any performance
unit or performance share that is intended to constitute
Performance-Based Compensation made to a Grantee who is
subject to Section 162(m) of the Code, the Committee shall
certify in writing that the applicable performance goals
have been satisfied.
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(v) Unless otherwise expressly stated in the relevant
Award Agreement, each performance unit and performance share
granted under the Plan is intended to be Performance-Based
Compensation and the Committee shall interpret and
administer the applicable provisions of the Plan in a manner
consistent therewith. Any provisions inconsistent with such
treatment shall be inoperative and shall not adversely
affect the treatment of performance units or performance
shares granted hereunder as Performance-Based Compensation.
The Committee shall not be entitled to exercise any
discretion otherwise authorized hereunder with respect to
such performance unit or performance share if the ability to
exercise such discretion or the exercise of such discretion
itself would cause the compensation attributable to such
performance unit or performance share to fail to qualify as
Performance-Based Compensation.
(f) Grant of Phantom Stock. The Committee may, in its
discretion, grant shares of phantom stock to any employee who is eligible
under Article 5 to receive Awards. Such phantom stock shall be subject to
the terms and conditions established by the Committee and set forth in the
applicable Award Agreement.
(g) Grant of Director's Shares. There shall be granted
Director's Shares with respect to 1,000 shares of Stock to each nonemployee
director of the Company upon his or her initial election to the Board.
Director's Shares shall be fully vested and transferable upon issuance.
(h) Tandem Awards. The Committee may grant and identify any
Award with any other Award granted under the Plan ("Tandem Award"), other
than a Substitute Option or a Spin-off Option, on terms and conditions
determined by the Committee.
7. Non-transferability.
Unless set forth in the applicable Award Agreement, no Award (other
than an Award of restricted Stock) granted hereunder shall by its terms be
assignable or transferable except by will or the laws of descent and
distribution or, in the case of an Option other than an Incentive Stock
Option, pursuant to a domestic relations order (within the meaning of Rule
16a-12 promulgated under the Exchange Act). An Option may be exercised
during the lifetime of a Grantee only by the Grantee or his or her guardian
or legal representatives. Notwithstanding the foregoing, the Committee may
set forth in the Award Agreement evidencing an Award (other than an
Incentive Stock Option) at the time of grant or thereafter, that the Award
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 Plan, a transferee of an Award 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. The terms of an Award
shall be final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Grantee. Each share of
restricted Stock shall be non-transferable until such share becomes
nonforfeitable.
8. Exercise.
(a) Exercise of Options. Subject to Articles 4(c)(vii), 12 and 13
and such terms and conditions as the Committee may impose, each Option
shall be exercisable in one or more installments commencing not earlier
than the first anniversary of the Grant Date of such Option; provided,
however,
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that all Options held by each Grantee shall become fully (100%) exercisable
upon the occurrence of a Change of Control regardless of whether the
acceleration of the exercisability of such Options would cause such Options
to lose their eligibility for treatment as Incentive Stock Options.
Notwithstanding the foregoing, Options may not be exercised by a Grantee
for twelve months following a hardship distribution to the Grantee, to the
extent such exercise is prohibited under Treasury Regulation
ss.1.401(k)-1(d)(2)(iv)(B)(4). Each Option shall be exercised by delivery
to the Company of written notice of intent to purchase a specific number of
shares of Stock subject to the Option. The Option Price of any shares of
Stock as to which an Option shall be exercised shall be paid in full at the
time of the exercise. Payment may be made, as determined by the Committee
in its discretion with respect to Options granted to eligible employees and
in all cases with respect to Options granted to nonemployee directors
pursuant to Article 6(b)(ii), in any one or any combination of the
following:
(i) cash,
(ii) shares of unrestricted Stock held by the Grantee
for at least six months (or such lesser period as may be
permitted by the Committee) prior to the exercise of the
Option, and valued at its Fair Market Value on the last
business day immediately preceding the date of exercise, or
(iii) through simultaneous sale through a broker of
shares of unrestricted Stock acquired on exercise, as
permitted under Regulation T of the Federal Reserve Board.
Shares of unrestricted Stock acquired by a Grantee on exercise of
an Option shall be delivered to the Grantee or, at the request of the
Grantee, shall be credited directly to a brokerage account specified by the
Grantee.
(b) Exercise of Performance Units.
(i) Subject to Articles 4(c)(vii), 12 and 13 and such
terms and conditions as the Committee may impose, and unless
otherwise provided in the applicable Award Agreement, if,
with respect to any performance unit, the Committee has
determined in accordance with Article 6(f)(iv) that the
minimum performance goals have been achieved during the
applicable Measuring Period, then such performance unit
shall be deemed exercised on the date on which it first
becomes exercisable.
(ii) The benefit for each performance unit exercised
shall be an amount equal to the product of
(A) the Unit Value (as defined below), multiplied
by
(B) the Performance Percentage attained during the
Measuring Period for such performance unit.
(iii) The Unit Value shall be, as specified by the
Committee,
(A) a dollar amount,
(B) an amount equal to the Fair Market Value of a
share of Stock on the Grant Date,
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(C) an amount equal to the Fair Market Value of a
share of Stock on the exercise date of the performance
unit, plus, if so provided in the Award Agreement, an
amount ("Dividend Equivalent Amount") equal to the Fair
Market Value of the number of shares of Stock that
would have been purchased if each dividend paid on a
share of Stock on or after the Grant Date and on or
before the exercise date were invested in shares of
Stock at a purchase price equal to its Fair Market
Value on the respective dividend payment date, or
(D) an amount equal to the Fair Market Value of a
share of Stock on the exercise date of the performance
unit (plus, if so specified in the Award Agreement, a
Dividend Equivalent Amount), reduced by the Fair Market
Value of a share of Stock on the Grant Date of the
performance unit.
(iv) The benefit upon the exercise of a performance
unit shall be payable as soon as is administratively
practicable (but in any event within 90 days) after the
later of (A) the date the Grantee is deemed to exercise such
performance unit, or (B) the date (or dates in the event of
installment payments) as provided in the applicable Award
Agreement. Such benefit shall be payable in cash, except
that the Committee, with respect to any particular exercise,
may, in its discretion, pay benefits wholly or partly in
Stock delivered to the Grantee or credited to a brokerage
account specified by the Grantee. The number of shares of
Stock payable in lieu of cash shall be determined by valuing
the Stock at its Fair Market Value on the business day next
preceding the date such benefit is to be paid.
(c) Payment of Performance Shares. Subject to Articles
4(c)(vii), 12 and 13 and such terms and conditions as the Committee may
impose, and unless otherwise provided in the applicable Award Agreement, if
the Committee has determined in accordance with Article 6(f)(iv) that the
minimum performance goals with respect to an Award of performance shares
have been achieved during the applicable Measuring Period, then the Company
shall pay to the Grantee of such Award (or, at the request of the Grantee,
deliver to a brokerage account specified by the Grantee) shares of Stock
equal in number to the product of the number of performance shares
specified in the applicable Award Agreement multiplied by the Performance
Percentage achieved during such Measuring Period, except to the extent that
the Committee in its discretion determines that cash be paid in lieu of
some or all of such shares of Stock. The amount of cash payable in lieu of
a share of Stock shall be determined by valuing such share at its Fair
Market Value on the business day next preceding the date such cash is to be
paid. Payments pursuant to this Article 8(d) shall be made as soon as
administratively practicable (but in any event within 90 days) after the
end of the applicable Measuring Period. Any performance shares with respect
to which the performance goals have not been achieved by the end of the
applicable Measuring Period shall expire.
(d) Payment of Phantom Stock Awards. Upon the vesting of a
phantom stock Award, the Grantee shall be entitled to receive a cash
payment in respect of each share of phantom stock which shall be equal to
the Fair Market Value of a share of Stock as of the date the phantom stock
Award was granted, or such other date as determined by the Committee at the
time the phantom stock Award was granted. The Committee may, at the time a
phantom stock Award is granted, provide a limitation on the amount payable
in respect of each share of phantom stock. In lieu of a cash payment, the
Committee may settle phantom stock Awards with shares of Stock having a
Fair Market Value equal to the cash payment to which the Grantee has become
entitled.
A-15
(e) Exercise, Cancellation, Expiration or Forfeiture of
Tandem Awards. Upon the exercise, cancellation, expiration, forfeiture or
payment in respect of any Award which is identified with any Tandem Award
pursuant to Article 6(i), the Tandem Award shall automatically terminate to
the extent of the number of shares in respect of which the Award is so
exercised, cancelled, expired, forfeited or paid, unless otherwise provided
by the Committee at the time of grant of the Tandem Award or thereafter.
9. Spin-off and Substitute Options.
Spin-off Options and Substitute Options shall be issued under
this Plan pursuant to and in accordance with the terms of the Benefits
Agreement. Spin-off Options and Substitute Options shall be governed by the
terms of the Plan to the extent that the terms of the Plan do not conflict
with the terms of the agreements evidencing the Spin-off Options and
Substitute Options.
10. Effect of Certain Transactions.
With respect to any Award which relates to Stock, in the event of
(i) the liquidation or dissolution of the Company or (ii) a merger or
consolidation of the Company (a "Transaction"), the Plan and the Awards
issued hereunder shall continue in effect in accordance with their
respective terms and each Grantee shall be entitled to receive in respect
of each share of Stock subject to any outstanding Awards, upon the vesting,
payment or exercise of the Award (as the case may be), the same number and
kind of stock, securities, cash, property, or other consideration that each
holder of a share of Stock was entitled to receive in the Transaction in
respect of a share of Stock.
11. Mandatory Withholding 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 any Award. If a Grantee is to
experience a taxable event in connection with the receipt of shares
pursuant to an Option exercise or the vesting or payment of another type of
Award (a "Taxable Event"), the Grantee shall pay the Withholding Taxes to
the Company prior to the issuance, or release from escrow, of such shares
or payment of such Award. Payment of the applicable Withholding Taxes may
be made, as determined by the Committee in its discretion, in any one or
any combination of (i) cash, (ii) shares of restricted or unrestricted
Stock owned by the Grantee prior to the Taxable Event 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 11, the Committee may provide in the Award
Agreement at the time of grant, or at any time thereafter, that the
Grantee, in satisfaction of the obligation to pay Withholding Taxes to the
Company, may elect to have withheld a portion of the shares then issuable
to him or her having an aggregate Fair Market Value equal to the
Withholding Taxes.
12. Termination of Employment.
The Award Agreement pertaining to each Award shall set forth the
terms and conditions applicable to such Award upon a Termination of
Employment of the Grantee by the Company, a Subsidiary or an operating
division or unit, which, except for Options granted to nonemployee
directors pursuant to Article 6(b)(ii), shall be as the Committee may, in
its discretion, determine at the time the Award is granted or thereafter.
A-16
13. Securities Law Matters.
(a) If the Committee deems it necessary to comply with the
Securities Act of 1933, the Committee may require a written investment
intent representation by the Grantee and may require that a restrictive
legend be affixed to certificates for shares of Stock.
(b) If, based upon the opinion of counsel for the Company,
the Committee determines that the exercise or nonforfeitability of, or
delivery of benefits pursuant to, any Award would violate any applicable
provision of (i) federal or state securities law or (ii) the listing
requirements of any national securities exchange on which are listed any of
the Company's equity securities, then the Committee may postpone any such
exercise, nonforfeitability or delivery, as the case may be, but the
Company shall use its best efforts to cause such exercise,
nonforfeitability or delivery to comply with all such provisions at the
earliest practicable date.
(c) Notwithstanding any provision of the Plan or any Award
Agreement to the contrary, no shares of Stock shall be issued to any
Grantee in respect of any Award prior to the time a registration statement
under the Securities Act of 1933 is effective with respect to such shares.
14. No Funding Required.
Benefits payable under the Plan to any person shall be paid
directly by the Company. The Company shall not be required to fund, or
otherwise segregate assets to be used for payment of, benefits under the
Plan.
15. No Employment Rights.
Neither the establishment of the Plan, nor the granting of any
Award shall be construed to (a) give any Grantee the right to remain
employed by the Company or any of its Subsidiaries or to any benefits not
specifically provided by the Plan or (b) in any manner modify the right of
the Company or any of its Subsidiaries to modify, amend, or terminate any
of its employee benefit plans.
16. Rights as a Stockholder.
A Grantee shall not, by reason of any Award (other than
restricted Stock), have any right as a stockholder of the Company with
respect to the shares of Stock which may be deliverable upon exercise or
payment of such Award until such shares have been delivered to him. Shares
of restricted Stock held by a Grantee or held in escrow by the Secretary of
the Company shall confer on the Grantee all rights of a stockholder of the
Company, except as otherwise provided in the Plan.
17. Nature of Payments.
Any and all grants, payments of cash, or deliveries of shares of
Stock hereunder shall constitute special incentive payments to the Grantee
and shall not be taken into account in computing the amount of salary or
compensation of the Grantee for the purposes of determining any pension,
retirement, death or other benefits under (a) any pension, retirement,
profit-sharing, bonus, life insurance or other employee benefit plan of the
Company or any of its Subsidiaries or (b) any agreement between the Company
or any Subsidiary, on the one hand, and the Grantee, on the other hand,
except as such plan or agreement shall otherwise expressly provide.
A-17
18. Non-Uniform Determinations.
Neither the Committee's nor the Board's determinations under the
Plan need be uniform and may be made by the Committee or the Board
selectively among persons who receive, or are eligible to receive, Awards
(whether or not such persons are similarly situated). Without limiting the
generality of the foregoing, the Committee shall be entitled, among other
things, to make non-uniform and selective determinations, to enter into
non-uniform and selective Award Agreements as to (a) the identity of the
Grantees, (b) the terms and provisions of Awards, and (c) the treatment of
Terminations of Employment.
19. Adjustments.
In the event of Change in Capitalization, the Committee shall, in
its sole discretion, make equitable adjustment of
(a) the aggregate number and class of shares of Stock or
other stock or securities available under Article 3,
(b) the number and class of shares of Stock or other stock
or securities covered by an Award and to be covered by
Options granted to nonemployee directors pursuant to
Article 6(b)(ii),
(c) the Option Price applicable to outstanding Options,
(d) the terms of performance unit and performance share
grants (to the extent permitted under Section 162(m))
of the Code and the regulations thereunder without
adversely affecting the treatment of the performance
unit or performance share as Performance-Based
Compensation,
(e) the Fair Market Value of Stock to be used to determine
the amount of the benefit payable upon exercise of
performance units, performance shares or phantom stock,
(f) the maximum number and class of shares of Stock or
other securities with respect to which Awards may be
granted to any individual in any three calendar year
period, and
(g) the number and class of shares of Stock or other
securities with respect to which Director Shares are to
be granted under Article 6(h).
20. Amendment of the Plan.
The Board may from time to time in its discretion amend or modify
the Plan without the approval of the stockholders of the Company, except as
such stockholder approval may be required (a) to retain Incentive Stock
Option treatment under Section 422 of the Internal Revenue Code, (b) to
permit transactions in Stock pursuant to the Plan to be exempt from
potential liability under Section 16(b) of the 1934 Act or (c) under the
listing requirements of any securities exchange on which any of the
Company's equity securities are listed.
A-18
21. Termination of the Plan.
The Plan shall terminate on the tenth (10th) anniversary of the
Effective Date or at such earlier time as the Board may determine. Any
termination, whether in whole or in part, shall not affect any Award then
outstanding under the Plan.
22. No Illegal Transactions.
The Plan and all Awards granted pursuant to it are subject to all
laws and regulations of any governmental authority which may be applicable
thereto; and notwithstanding any provision of the Plan or any Award,
Grantees shall not be entitled to exercise Awards or receive the benefits
thereof and the Company shall not be obligated to deliver any Stock or pay
any benefits to a Grantee if such exercise, delivery, receipt or payment of
benefits would constitute a violation by the Grantee or the Company of any
provision of any such law or regulation.
23. Governing Law.
Except where preempted by federal law, the law of the State of
Delaware shall be controlling in all matters relating to the Plan, without
giving effect to the conflicts of law principles thereof.
24. Severability.
If all or any part of the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of the Plan not
declared to be unlawful or invalid. Any Article or part of an Article so
declared to be unlawful or invalid shall, if possible, be construed in a
manner which will give effect to the terms of such Article or part of an
Article to the fullest extent possible while remaining lawful and valid.
A-19
COMMSCOPE, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 5, 2000
The undersigned hereby authorizes and directs Vanguard Fiduciary Trust
Company, as trustee (the "Trustee") of the CommScope, Inc. of North
Carolina Employees Profit Sharing and Savings Plan, to vote as Proxy for
the undersigned as herein stated at the Annual Meeting of Stockholders of
CommScope, Inc. (the "Company") to be held at the Chase Manhattan Bank, 270
Park Avenue, 11th Floor, New York, New York 10017, on Friday, May 5, 2000
at 1:30 p.m., local time, and at any adjournment thereof, all shares of
Common Stock of CommScope, Inc. allocated to the account of the undersigned
under such Plan, on the proposals set forth on the reverse hereof and in
accordance with the Trustee's discretion on any other matters that may
properly come before the meeting or any adjournments thereof. The
undersigned hereby acknowledges receipt of the Notice and Proxy Statement,
dated March 27, 2000.
THE SHARES COVERED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE PROXY WILL BE VOTED BY THE TRUSTEE IN ITS SOLE
DISCRETION IN THE BEST INTEREST OF THE PLAN PARTICIPANTS AND BENEFICIARIES.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
(IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE)
SEE REVERSE
SIDE
The Board of Directors recommends that stockholders vote "FOR" Proposals
One, Two and Three.
PROPOSAL ONE: To elect two Class III directors for terms ending at the
2003 Annual Meeting of Stockholders.
FOR all nominees listed below / / WITHHOLD AUTHORITY / /
(except as marked to the contrary) --- to vote for all nominees ---
listed below
Nominees: Frank M. Drendel and Duncan M. ("Lauch") Faircloth
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME.
PROPOSAL TWO: To approve an amendment to the Amended and Restated
CommScope, Inc. 1997 Long-Term Incentive Plan to reserve
for issuance thereunder an additional 2,000,000 shares.
FOR / / AGAINST / / ABSTAIN / /
--- --- ---
PROPOSAL THREE: To ratify the appointment by the Board of Directors of the
Company of Deloitte & Touche LLP as independent auditor for
the Company for the 2000 fiscal year.
FOR / / AGAINST / / ABSTAIN / /
--- --- ---
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as your name
appears. If acting as attorney,
executor, administrator, trustee,
guardian, etc., you should so indicate
when signing. If a corporation, please
sign the full corporate name by
President or other duly authorized
officer. If a partnership, please sign
in full partnership name by authorized
person. If shares are held jointly, both
parties must sign and date.
Signature(s): Date:
---------------------------------- --------------------
Signature(s): Date:
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COMMSCOPE, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 5, 2000
The undersigned hereby appoints Frank B. Wyatt, II and Jearld L. Leonhardt
and each or either of them his/her attorneys and agents, with full power of
substitution to vote as Proxy for the undersigned as herein stated at the
Annual Meeting of Stockholders of CommScope, Inc. (the "Company") to be
held at the Chase Manhattan Bank, 270 Park Avenue, 11th Floor, New York,
New York 10017 on Friday, May 5, 2000 at 1:30 p.m., local time, and at any
adjournment thereof, according to the number of votes the undersigned would
be entitled to vote if personally present, on the proposals set forth on
the reverse hereof and in accordance with their discretion on any other
matters that may properly come before the meeting or any adjournments
thereof. The undersigned hereby acknowledges receipt of the Notice and
Proxy Statement, dated March 27, 2000. IF THIS PROXY IS RETURNED WITHOUT
DIRECTION BEING GIVEN, THIS PROXY WILL BE VOTED "FOR" PROPOSALS ONE, TWO
AND THREE.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
(IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE)
SEE REVERSE
SIDE
The Board of Directors recommends that stockholders vote "FOR" Proposals
One, Two and Three.
PROPOSAL ONE: To elect two Class III directors for terms ending at the
2003 Annual Meeting of Stockholders.
FOR all nominees listed below / / WITHHOLD AUTHORITY / /
(except as marked to the contrary) --- to vote for all nominees ---
listed below
Nominees: Frank M. Drendel and Duncan M. ("Lauch") Faircloth
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME.
PROPOSAL TWO: To approve an amendment to the Amended and Restated
CommScope, Inc. 1997 Long-Term Incentive Plan to reserve
for issuance thereunder an additional 2,000,000 shares.
FOR / / AGAINST / / ABSTAIN / /
--- --- ---
PROPOSAL THREE: To ratify the appointment by the Board of Directors of the
Company of Deloitte & Touche LLP as independent auditor for
the Company for the 2000 fiscal year.
FOR / / AGAINST / / ABSTAIN / /
--- --- ---
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as your name
appears. If acting as attorney,
executor, administrator, trustee,
guardian, etc., you should so indicate
when signing. If a corporation, please
sign the full corporate name by
President or other duly authorized
officer. If a partnership, please sign
in full partnership name by authorized
person. If shares are held jointly, both
parties must sign and date.
Signature(s): Date:
---------------------------------- --------------------
Signature(s): Date:
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