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]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COMMSCOPE, INC.
- ---------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
COMMSCOPE, INC.
March 30, 2001
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 4, 2001 at 1:30 p.m., local time, at the JP
MorganChase Bank, 270 Park Avenue - 11th Floor, New York, New York 10017.
At the Annual Meeting we will review the Company's activities in 2000,
as well as the outlook for 2001. 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 4, 2001, at 1:30 p.m.,
local time, at the JP MorganChase 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 I directors for terms ending at the
2004 Annual Meeting of Stockholders;
Proposal Two: To ratify the appointment by the Board of Directors of
the Company of Deloitte & Touche LLP as independent
auditor for the Company for the 2001 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 20, 2001 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, 2001
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 2001 Proxy Statement and 2000 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, P.O. BOX 339
HICKORY, NORTH CAROLINA 28603
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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 4, 2001 at 1:30 p.m., local
time, at the JP MorganChase 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 I directors
for terms ending at the 2004 Annual Meeting of Stockholders; and PROPOSAL
Two: To ratify the appointment by the Board of Directors of the Company of
Deloitte & Touche LLP as independent auditor for the Company for the 2001
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 20, 2001 (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 51,360,367 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, 2001.
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 shares of Common
Stock entitled to vote thereon, and present in person or represented by
proxy, is required to approve Proposal Two.
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
1
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 2000 Annual Report and
this Proxy Statement over the Internet will be receiving an email on or
about March 30, 2001 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 2000 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; two Class
II Directors, whose terms expire at the 2002 Annual Meeting of
Stockholders; and two Class III Directors, whose terms expire at the 2003
Annual Meeting of Stockholders (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 2004 ANNUAL MEETING OF STOCKHOLDERS
BOYD L. GEORGE, age 59, is Chairman of the Board and Chief Executive
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 as well
as for other subsidiaries.
GEORGE N. HUTTON, JR., age 71, is and has been a private investor for
more than 15 years. He is a former director of Sprint Corporation and of
M/A Com Inc.
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, 45 2002 Edward D. Breen is Exec-
Executive Vice President of utive Vice President of
Motorola, Inc. and President of Motorola, Inc. ("Motorola")
Motorola's Networks Sector and President, Networks
Sector. He was Executive
Vice President of Motorola,
and President of Motorola's
Broadband Communications
Sector from January 2000 to
January 2001. Prior to
joining Motorola, Mr. Breen
was Chairman and Chief
Executive officer of
General Instrument
Corporation, formerly
NextLevel Systems, Inc.
("GI"), from December 1997
to January 2000, 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 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. He is a
director of VIA NET.WORKS,
INC.
Frank M. Drendel, 56 2003 Frank M. Drendel has been
Chairman and Chief Chairman and Chief Execu-
Executive Officer tive Officer of the Company
of the Company since 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.,
Corvis Corporation, C-SPAN
and the National Cable
Television Association.
4
NAME, AGE AND CURRENT TERM
PRINCIPAL OCCUPATION EXPIRES INFORMATION
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Duncan M. ("Lauch") 2003 Duncan M. ("Lauch") Fair-
Faircloth, 73 cloth has spent approx-
Private Investor, imately 50 years, and con-
Former U.S. Senator tinues 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.
Boyd L. George, 59 2001 Boyd L. George is Chairman
Chairman of the Board of the Board and Chief
and Chief Executive Executive Officer of Alex
Officer of Alex Lee, Inc. 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 as well as for
other subsidiaries.
George N. Hutton, Jr., 71 2001 George N. Hutton, Jr. is
Private Investor and has been a private in-
vestor 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, 66 2002 James N. Whitson has served
Director of various and 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.
On December 14, 2000, the Company amended the Amended and Restated
CommScope 1997 Long-Term Incentive Plan (the "1997 LTIP") to provide that
nonemployee directors may be granted stock options under the 1997 LTIP in
addition to the automatic grants described above. No such additional grants
of stock options were made to nonemployee directors in 2000.
COMMITTEES OF THE BOARD OF DIRECTORS - BOARD MEETINGS
The Board of Directors of the Company held six meetings in 2000. Each
incumbent director attended (i) 75% or more of all meetings of the Board of
Directors and (ii) all meetings 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's consolidated
financial statements by its independent auditors, review the annual
consolidated financial statements of the Company and the related audit
report as prepared by the independent auditors, recommend the selection of
independent auditors each year, review the independence of the independent
auditors, review the adequacy and scope of the internal audit plan, and
review any significant internal audit findings. The members of the Audit
Committee are the following nonemployee directors: Mr. Whitson, Chairman,
Mr. Breen and Mr. George. All members of the Audit Committee are
independent, financially literate, and at least one member has accounting
and financial management expertise. The Audit Committee held three meetings
in 2000.
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.
6
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 four meetings in 2000.
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 one meeting in 2000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 2000, 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 amount of approximately $88,000, including
certain reimbursable expenses associated with such aircraft usage. Mr.
Drendel is a director of Nextel Communications, Inc., a leading provider of
fully integrated wireless communication services. In 2000, Nextel
Communications, Inc. purchased products from the Company for an aggregate
amount representing less than 2% of the Company's total sales.
Edward D. Breen, a director of the Company, was Executive Vice
President of Motorola and President of Motorola's Broadband Communications
Sector in 2000. In 2000, Motorola purchased products and services from the
Company for an aggregate amount representing less than 1% of the Company's
total sales and the Company purchased property in Brazil from Motorola for
approximately $7 million.
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 2000, 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 $103,000.
The Company believes that the terms of each of the transactions
described above were no less favorable to the Company than the terms which
could be obtained from unrelated third parties.
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, 2000, its officers and directors and holders of
more than 10% of the Common Stock complied with all applicable Section
16(a) filing requirements.
7
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.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION(a) AWARDS
---------------------- ------------
SECURITIES
NAME AND BASE UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#)(b) COMPENSATION
------------------ ---- ------ ----- ------------- ------------
Frank M. Drendel..... 2000 $ 525,475 $322,158 120,000 $ 15,707(c)
Chairman and Chief 1999 502,761 424,833 56,300 16,263
Executive Officer 1998 475,008 316,999 101,800 19,558
Brian D. Garrett..... 2000 $ 315,265 $178,415 57,900 $ 15,666(c)
President and Chief 1999 301,640 259,086 32,650 15,673
Operating Officer 1998 285,000 175,566 50,040 17,088
Jearld L. Leonhardt.. 2000 $ 248,892 $140,853 38,700 $ 15,229(c)
Executive Vice 1999 238,135 199,507 22,500 15,510
President and Chief 1998 225,000 138,605 50,040 17,884
Financial Officer
Gene W. Swithenbank.. 2000 $ 221,251 $125,210 31,400 $ 15,196(c)
Executive Vice 1999 211,686 153,629 15,000 15,422
President, 1998 199,992 112,937 27,100 18,033
CATV Sales and
Marketing
Frank J. Logan....... 2000 $ 221,251 $118,950 13,200 $ 15,196(c)
Executive Vice 1999 211,686 129,146 11,950 15,422
President, 1998 199,992 103,697 27,100 18,033
International Sales
- --------------------
(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 2000 reflect (i) the matching contribution under the
CommScope, Inc. of North Carolina Employees Retirement Savings Plan
(the "Employees Retirement Savings Plan") in the amount of $3,162,
$3,400, $3,052, $3,055 and $3,055 for 2000 on behalf of Messrs.
Drendel, Garrett, Leonhardt, Swithenbank, and Logan, respectively,
(ii) the profit sharing allocation of $7,257 to the account of each of
Messrs. Drendel, Garrett, Leonhardt, Swithenbank and Logan under the
Employees Retirement Savings Plan for 2000, (iii) payment by the
Company in 2000 of cash amounts in lieu of profit sharing allocations
to their respective Employees Retirement Savings Plan accounts of
$4,590 on behalf of each of Messrs. Drendel, Garrett, Leonhardt,
Swithenbank and Logan and (iv) payment by the Company in 2000 of
premiums of $698, $419, $330, $294 and $294 for term life insurance on
behalf of Messrs. Drendel, Garrett, Leonhardt, Swithenbank and Logan,
respectively.
8
STOCK OPTIONS
GRANT OF OPTIONS. The table below sets forth information with respect
to grants of options to purchase Common Stock during the year ended
December 31, 2000 to the executives listed in the Summary Compensation
Table.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED ANNUAL
RATES OF
STOCK PRICE
APPRECIATION
FOR
INDIVIDUAL GRANTS OPTION TERM(a)
--------------------------------------- --------------
PERCENT
OF TOTAL
OPTIONS
GRANTED
NUMBER OF TO
SECURITIES EMPLOY- EXER-
UNDERLYING EES IN CISE
OPTIONS FISCAL PRICE EXPIRATION
NAME (#)(b) YEAR ($/SH) DATE 5%($) 10%($)
- ------------------ ------- ------ ------ -------- ---------- ----------
Frank M. Drendel.. 120,000 8.3 $17.25 12/14/10 $1,301,812 $3,299,047
Brian D. Garrett.. 57,900 4.0 $17.25 12/14/10 $ 628,124 $1,591,790
Jearld L.
Leonhardt......... 38,700 2.7 $17.25 12/14/10 $ 419,834 $1,063,943
Gene W.
Swithenbank....... 31,400 2.2 $17.25 12/14/10 $ 340,641 $ 863,251
Frank J. Logan..... 13,200 0.9 $17.25 12/14/10 $ 143,199 $ 362,895
- --------------------
(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 1997 LTIP. These options become
exercisable with respect to one-third of the shares covered thereby on
December 14, 2001, 2002 and 2003. In the event of a change in control
of the Company, all such options shall become immediately and fully
exercisable.
AGGREGATED OPTION EXERCISES AND YEAR-END VALUE. The following table
sets forth as of and for the year ended December 31, 2000, for each of the
executives listed in the Summary Compensation Table (i) the aggregated
shares acquired upon exercise of stock options during the year; (ii) the
value realized upon exercise of those options; (iii) the total number of
unexercised options for Common Stock (exercisable and unexercisable) held
at fiscal year-end; and (iv) the value of such options which were
in-the-money at fiscal year-end (based on the difference between the
closing price of Common Stock on the last day of the year and the exercise
price of the option on such date).
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED STOCK STOCK OPTIONS
OPTIONS AT FISCAL AT FISCAL
YEAR-END(#) YEAR-END ($)(a)
------------------ -------------------
SHARES
ACQUIRED
ON VALUE
EXER- REAL- EXER- UNEXER- EXER- UNEXER-
NAME CISE(#) IZED($) CISABLE CISABLE CISABLE CISABLE
- ----------------- ------- --------- ------- ------- ---------- ---------
Frank M.
Drendel......... -- -- 480,927 246,609 $1,632,192 $ 241,775
Brian D.
Garrett......... 77,443 $2,769,059 145,454 120,337 $ 430,641 $ 104,828
Jearld L.
Leonhardt....... -- -- 186,822 94,370 $ 693,444 $ 104,828
Gene W.
Swithenbank..... 10,618 $ 416,787 103,469 65,125 $ 344,283 $ 64,419
Frank J. Logan.. -- -- 113,360 44,892 $ 373,255 $ 64,419
- --------------------
(a) Based on the difference between the closing price of $16.5625 per
share at December 29, 2000, as reported on the NYSE Composite Tape and
the exercise price of the option on such date.
9
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 Logan, 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, 2000, the estimated annual benefits
payable to Messrs. Drendel, Garrett, Leonhardt, Swithenbank and Logan on or
after attaining age 65 are $175,158, $105,088, $82,964, $73,750, and
$73,750, 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 each
anniversary of the agreement unless notification is given to either the
Company or the executive.
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
10
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 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
11
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, and on May 5, 2000, the Company's stockholders approved the
amendment. The amendment to the 1997 LTIP increased the number of shares of
Common Stock available for issuance under the plan by 2 million shares.
During 2000, the Company awarded options under the 1997 LTIP to purchase an
aggregate of approximately 402,750 shares of Common Stock to 10 executive
officers (including executive officers named in the Summary Compensation
Table other than the Chief Executive Officer). 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 normally are not exercisable until one year after the
12
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 2000, each of the 10 executive officers (including executive
officers named in the Summary Compensation Table) received base salary
increases. These increases were based upon each officer's individual
services rendered, level and scope of responsibility and experience. Also
taken into account was 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 2000 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 2000 ranged
from 30% to 60%. The target award percentage for the Chief Executive
Officer was 65%. Because the Company's performance target for 2000 basic
earnings per share was achieved, in 2001 bonus awards equal to 94.32% of
each officer's target award were paid with respect to performance in 2000
(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 2000, the Compensation Committee
recommended and the Board of Directors of the Company approved the increase
of Mr. Drendel's annual salary rate from $508,000 to $528,000, effective
March 1, 2000, and the continuation of his target bonus percentage under
the Annual Incentive Plan of 65%. The Compensation Committee recommended
and on December 14, 2000, Mr. Drendel was granted an option to purchase
120,000 shares of Common Stock with a per share exercise price of $17.25,
the closing market price of the Common Stock on the date of the grant. The
increase in Mr. Drendel's salary and the continuation of his target bonus
percentage was determined based on factors such as the Company's overall
performance, Mr. Drendel's individual performance, and the compensation of
similarly situated executives at comparable corporations.
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.
13
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 2000 exceeded $1
million. It is not expected that any executive officer's compensation will
be non-deductible in 2001 by reason of the application of Section 162(m).
Respectfully submitted,
COMPENSATION COMMITTEE
GEORGE N. HUTTON, JR., CHAIRMAN
DUNCAN M. FAIRCLOTH
14
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors is providing this report
to enable stockholders to understand how it monitors and oversees the
Company's financial reporting process. The Audit Committee operates
pursuant to an Audit Committee Charter that is reviewed annually by the
Audit Committee and updated as appropriate. A copy of the Audit Committee
Charter has been included as Annex A to this Proxy Statement.
This report confirms that the Audit Committee has: (i) reviewed and
discussed the audited financial statements for the year ended December 31,
2000 with management and the Company's independent public accountants; (ii)
discussed with the Company's independent public accountants the matters
required to be reviewed pursuant to the Statement on Auditing Standards No.
61 (Communications with Audit Committees); (iii) reviewed the written
disclosures letter from the Company's independent public accountants as
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees); and (iv) discussed with the Company's
independent public accountants their independence from the Company.
The Audit Committee of the Board of Directors has considered whether
the provision of non-audit professional services rendered by Deloitte &
Touche LLP, as discussed above and disclosed elsewhere in this proxy
statement, is compatible with maintaining their independence.
Based upon the above review and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial statements
for the year ended December 31, 2000 be included in the Company's Annual
Report on Form 10-K for filing with the Securities and Exchange Commission.
Respectfully submitted,
AUDIT COMMITTEE
JAMES N. WHITSON, CHAIRMAN
EDWARD D. BREEN
BOYD L. GEORGE
15
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 ("S&P 500"), the Standard & Poor's 600 SmallCap Telecommunications
Equipment Index ("Telecom Equip-Small") and the Standard & Poor's MidCap
400 Telecommunications Equipment Index ("Telecom Equip-Mid"). In 1999, the
Company's stock performance graph compared the Company's stock performance
to the S&P 500 and the Telecom Equip-Small. Because the Company was added
to the Telecom Equip-Mid in 2000, the Company will substitute the Telecom
Equip-Mid for the Telecom Equip-Small for subsequent years. Accordingly,
the comparison of the Company's stock performance to the Telecom
Equip-Small is included for historical purposes only and will not be
included next year. 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.
COMPARISON OF ANNUAL CUMULATIVE TOTAL
RETURN OF COMMSCOPE, THE S&P 500 INDEX,
THE TELECOM EQUIP-SMALL INDEX AND THE TELECOM EQUIP-MID INDEX*
[LINE GRAPH]
-----------------------------------------------------------------------
COMPANY/INDEX 28 JUL 97 DEC-97 DEC-98 DEC-99 DEC-00
-----------------------------------------------------------------------
COMMSCOPE INC 100 88.62 109.35 262.19 107.72
-----------------------------------------------------------------------
S&P 500 INDEX 100 103.47 133.04 161.03 146.37
-----------------------------------------------------------------------
TELECOM EQUIP-
SMALL INDEX 100 90.22 74.18 133.13 76.90
-----------------------------------------------------------------------
TELECOM EQUIP-
MID INDEX 100 133.65 108.09 517.52 377.40
-----------------------------------------------------------------------
* $100 invested on July 28, 1997 including reinvestment of dividends.
16
BENEFICIAL OWNERSHIP OF COMMON STOCK
The table below sets forth information as to the beneficial ownership
of Common Stock as of March 20, 2001 (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
Stock Beneficially % of Shares Outstanding
Name Owned(1) Beneficially Owned
- ---------------------------- --------------- ----------------------
FMR Corp. (2) 3,923,900 7.6
Edward D. Breen (3) 21,000 *
Frank M. Drendel (4)(13) 855,522 1.7
Duncan M. Faircloth (5) 14,333 *
Brian D. Garrett (6)(13) 227,166 *
Boyd L. George (7) 30,000 *
George N. Hutton, Jr. (8) 21,333 *
Jearld L. Leonhardt (9)(13) 221,660 *
Frank J. Logan (10)(13) 123,813 *
Gene W. Swithenbank (11)(13) 118,756 *
James N. Whitson (12) 21,000 *
All current directors and
executive officers of the
Company as a group 1,978,416 3.9
(15 persons)(14)
* 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 20,
2001. 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 20, 2001 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 13,
2001, 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
3,923,900 shares. FMR Corp. reports that it has sole voting power over
516,800 shares, no shared voting power and sole dispositive power over
3,923,900 shares. Mr. Johnson and Ms. Johnson each report no voting
power and sole dispositive power over 3,923,900 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 with respect to FMR Corp. FMR Corp's
principal business office is located at 82 Devonshire Street, Boston,
Massachusetts 02109.
(3) Includes 20,000 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 20, 2001.
17
(4) Includes 480,927 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 20, 2001. Also
includes 100 shares held by the spouse of Frank M. Drendel.
(5) Includes 13,333 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 20, 2001.
(6) Includes 145,454 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 20, 2001.
(7) Includes 20,000 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 20, 2001. Also
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.
(8) Includes 20,000 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 20, 2001.
(9) Includes 186,822 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 20, 2001. Also
includes 1,000 shares held by the spouse of Jearld L. Leonhardt.
(10) Includes 113,360 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 20, 2001.
(11) Includes 103,469 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 20, 2001.
(12) Includes 20,000 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 20, 2001.
(13) Includes the number of shares of Common Stock which were held by the
trustee of the Employees Retirement Savings Plan and were allocated to
the individual's respective account under the Employees Retirement
Savings Plan as of February 28, 2001 as follows: Frank M. Drendel, 745
shares; Brian D. Garrett, 693 shares; Jearld L. Leonhardt, 1,389
shares; Frank J. Logan, 686 shares; and Gene W. Swithenbank, 4,521
shares.
(14) Includes 1,419,090 shares subject to options which are exercisable for
Common Stock currently or within 60 days of March 20, 2001. Includes
an aggregate of 16,609 shares of Common Stock which were held by the
trustees of the Employees Retirement Savings Plan and were allocated
to the current officers' respective accounts under the Employees
Retirement Savings Plan as of February 28, 2001.
PROPOSAL TWO: 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 2001 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. 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.
18
INDEPENDENT AUDITORS
AUDIT FEES
The aggregate fees and expenses billed by Deloitte & Touche LLP, the
member firms of Deloitte Touche Tohmatsu, and their respective affiliates
("Deloitte") for professional services rendered for the audit of the
Company's annual consolidated financial statements for the year ended
December 31, 2000 and the reviews of the consolidated financial statements
included in the Company's Quarterly Reports on Form 10-Q for that year
amounted to $194,770.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The aggregate fees and expenses billed by Deloitte for professional
information technology services rendered to the Company relating to
financial information systems design and implementation for the year ended
December 31, 2000 amounted to $595,174.
ALL OTHER FEES
The aggregate fees and expenses billed by Deloitte for professional
services rendered to the Company relating to services other than those
described above under "Audit Fees" and "Financial Information Systems
Design and Implementation Fees" for the year ended December 31, 2000
amounted to $937,927.
The Audit Committee of the Company's Board of Directors has considered
whether the provision of non-audit professional services rendered by
Deloitte, as discussed above, is compatible with maintaining their
independence.
STOCKHOLDER PROPOSALS FOR THE COMPANY'S 2002 ANNUAL MEETING
Stockholders who intend to present proposals at the 2002 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,
P.O. Box 339, Hickory, North Carolina 28603, and such notice must be
received no later than November 30, 2001. 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
2002 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.
19
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, 2000, 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, P.O. Box 339, Hickory, North
Carolina 28603, Attention: Investor Relations.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Frank B. Wyatt, II
Frank B. Wyatt, II
Secretary
Dated: March 30, 2001
Hickory, North Carolina
20
ANNEX A
COMMSCOPE, INC.
AUDIT COMMITTEE CHARTER
The Board of Directors of CommScope, Inc. (the "Company") has established
an Audit Committee (the "Committee") with general responsibility and
specific duties as described below.
COMPOSITION:
- -----------
The Committee shall be comprised of not less than three Directors who shall
meet the requirements of the New York Stock Exchange. Committee membership
shall be approved by the Board of Directors.
RESPONSIBILITY:
- --------------
The Committee's responsibility is to assist the Board of Directors in
fulfilling its fiduciary responsibilities as to accounting policies and
reporting practices of the Company. The Committee is empowered to retain
persons having special competence as necessary to assist the Committee in
fulfilling its responsibility. While the Committee has the responsibilities
and powers set forth in this Charter, it is not the duty of the Committee
to plan or conduct audits or to determine that the Company's financial
statements are complete and accurate and are in accordance with generally
accepted accounting principles. This is the responsibility of Management
and the Independent Accountant. The Independent Accountant is ultimately
accountable to the Board of Directors and the Committee.
ATTENDANCE:
- ----------
Members of the Committee should endeavor to be present, in person or by
telephone, at all meetings; however, two Committee members shall constitute
a quorum. As necessary, the Chairperson may request members of Management,
the Internal Audit Manager, and representatives of the Independent
Accountant to be present at meetings.
MINUTES OF MEETINGS:
- -------------------
Minutes of each meeting shall be prepared and sent to Committee members and
presented to Company Directors who are not members of the Committee.
SPECIFIC DUTIES:
- ---------------
The Committee is to:
A-1
1. Review with the Company's Management, the Independent Accountant, and
the Internal Audit Manager, the Company's policies and procedures, as
appropriate, to reasonably assess the adequacy of internal accounting
and financial reporting controls.
2. Review the Committee's Charter annually, and update as appropriate.
3. Recommend to the Board of Directors the Independent Accountant to be
selected (subject to ratification by the stockholders), evaluate the
Independent Accountant, approve the compensation of the Independent
Accountant, and review and approve any discharge of the Independent
Accountant.
4. Review and concur in the appointment, replacement, reassignment, or
dismissal of the Internal Audit Manager.
5. Receive periodic written statements from the Independent Accountant
regarding its independence and delineating all relationships between
it and the Company, discuss such reports with the Independent
Accountant, and if so determined by the Committee, recommend that the
Board take appropriate action.
6. Become familiar with the accounting and reporting principles and
practices applied by the Company in preparing its financial statements
and discuss with the Independent Accountant and Management judgments
about the quality, not just the acceptability, of the Company's
accounting principles, to include their clarity, consistency and
completeness.
7. Review with Management and the Internal Audit Manager the adequacy and
the scope of the annual internal audit plan, and any significant audit
findings.
8. Review, prior to the annual audit, the scope and general extent of the
Independent Accountant's audit examinations.
9. Review with Management and the Independent Accountant, upon completion
of their audit, financial statements for the year prior to their
filing with the Securities and Exchange Commission. Discuss with the
Independent Accountant the matters required to be discussed by the
Statement on Auditing Standards No. 61, as amended by Statement on
Auditing Standards No. 89, relating to the conduct of the year-end
audit.
10. Discuss with the Independent Accountant the quality of the Company's
financial accounting personnel, and any relevant recommendations that
the Independent Accountant may have.
11. Report Committee actions to the Board of Directors with such
recommendations, as the Committee may deem appropriate.
A-2
12. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy
statement, commencing with the proxy statement for the 2001 annual
meeting.
13. Perform such other functions as may be required by law, the Company's
Certificate of Incorporation or By-Laws of the Board.
A-3
COMMSCOPE, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 4, 2001
The undersigned hereby authorizes and directs Vanguard Fiduciary Trust
Company, as trustee (the "Trustee") of the CommScope, Inc. of North
Carolina Employees Retirement 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 JP MorganChase Bank, 270
Park Avenue, 11th Floor, New York, New York 10017, on Friday, May 4, 2001
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 30, 2001.
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 and Two.
PROPOSAL ONE: To elect two Class I directors for terms ending at the 2004
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: Boyd L. George and George N. Hutton, Jr.
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME.
PROPOSAL TWO: To ratify the appointment by the Board of Directors of the
Company of Deloitte & Touche LLP as independent auditor for
the Company for the 2001 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:
------------------------- --------------------
2
COMMSCOPE, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 4, 2001
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 JP MorganChase Bank, 270 Park Avenue, 11th Floor, New York, New
York 10017 on Friday, May 4, 2001 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 30, 2001. IF THIS PROXY IS RETURNED WITHOUT
DIRECTION BEING GIVEN, THIS PROXY WILL BE VOTED "FOR" PROPOSALS ONE AND
TWO.
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 and Two.
PROPOSAL ONE: To elect two Class I directors for terms ending at the 2004
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: Boyd L. George and George N. Hutton, Jr.
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME.
PROPOSAL TWO: To ratify the appointment by the Board of Directors of the
Company of Deloitte & Touche LLP as independent auditor for
the Company for the 2001 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:
------------------------- --------------------
2