EXHIBIT 10.12
THE COMMSCOPE, INC. OF NORTH CAROLINA
DEFERRED COMPENSATION PLAN
Effective as of June 1, 1997
THE COMMSCOPE, INC. DEFERRED COMPENSATION PLAN
ARTICLE I - INTRODUCTION
1.1 PURPOSE OF THE PLAN
Effective as of June 1, 1997, CommScope, Inc. of North Carolina has adopted
the Plan set forth herein to provide a means by which certain employees may
elect to defer receipt of designated percentages or amounts of their
Compensation. Effective as of the date of distribution by General
Instrument Corporation of all of its shares of stock of CommScope, Inc.
(the "Spinoff"), the Plan also assumes the liabilities from the GI Deferred
Compensation Plan ("GI Plan") with respect to participants in the GI Plan
as of the date of the Spinoff whose employment after the Spinoff is with
CommScope, Inc. or its subsidiaries. As of the Spinoff, assets shall be
transferred from the trust maintained in connection with the GI Plan to the
Trust maintained in connection with the Plan, in an amount equal to the
liabilities transferred from the GI Plan to the Plan.
1.2 STATUS OF PLAN
The Plan is intended to be "a plan which is unfounded and is maintained by
an employer primarily for the purpose of providing deferred compensation
for a select group of management or highly compensated employees" within
the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee
Retirement Income Security Act of 1974 (`ERISA"), and shall be interpreted
and administered t the extent possible in a manner consistent with that
intent.
ARTICLE 2 - DEFINITIONS
Wherever used herein, the following terms have the meanings set forth
below, unless a different meaning is clearly required by the context:
2.1 ACCOUNT means, for each Participant, the bookkeeping account
established for his or her benefit under Section 5.1.
2.2 CHANGE OF CONTROL has the meaning set forth in the CommScope, Inc. 1997
Long Term Incentive Plan.
2.3 CODE means the Internal Revenue Code of 1986, as amended from time to
time. Reference to any section or subsection of the Code includes reference
to any comparable or succeeding provisions of any legislation which amends,
supplements or replaces such section or subsection.
2.4 COMPANY means CommScope, Inc. of North Carolina, any successor to all
or a major portion of the Company's assets or business which assumes the
obligations of the Company, and each other entity that is affiliated with
the Company which adopts the Plan with the consent of CommScope, Inc. With
respect to any Participant, the "Company" shall mean the entity by which he
is employed.
2.5 COMPENSATION means base salary payable to a Participant by the Company
or an affiliate, and any bonuses earned by a Participant under the
Company's annual incentive plan.
2.6 EFFECTIVE DATE means June 1, 1997, subject to the occurrence of the
Spinoff.
2.7 ELECTION FORM means the participation election form as approved and
prescribed by the Plan Administrator.
2.8 ELECTIVE DEFERRAL means the portion of Compensation which is deferred
by a Participant under 4.1.
2.9 ELIGIBLE EMPLOYEE means each employee of the Company who is at a salary
level of Grade 16 or higher.
2.10 ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to any section or subsection of ERISA
includes reference to any comparable or succeeding provisions of any
legislation which amends, supplements or replaces such section or
subsection.
2.11 INSOLVENT means either (i) the Company is unable to pay its debts as
they become due, or (ii) the Company is subject to a pending proceeding as
a debtor under the United States Bankruptcy Code.
2.12 PARTICIPANT means any individual who participates in the Plan in
accordance with Article 3.
2.13 PLAN means the CommScope, Inc. of North Carolina Deferred Compensation
Plan and all amendments thereto.
2.14 PLAN ADMINISTRATOR means the person, persons or entity designated by
CommScope, Inc. of North Carolina from time to time to administer the Plan
and to serve as the agent for the Company with respect to the Trust as
contemplated by the agreement establishing the Trust. If no such person or
entity is so serving at any time, CommScope, Inc. of North Carolina shall
be the Plan Administrator.
2.15 PLAN YEAR means the 12-month period beginning January 1 and ending
December 31.
2.16 TOTAL AND PERMANENT DISABILITY means the inability of a Participant to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result
in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months, and the permanence and degree of which
shall be supported by medical evidence satisfactory to the Plan
Administrator.
2.17 TRUST means the applicable trust established by the CommScope, Inc. of
North Carolina or an affiliate thereof that identifies the Plan as a plan
with respect to which assets are to be held by the Trustee.
2.18 TRUSTEE means the trustee or trustees under the Trust.
ARTICLE 3 - PARTICIPATION
3.1 COMMENCEMENT OF PARTICIPATION.
Any individual who elects to defer part of his or her Compensation in
accordance with Section 4.1 shall become a Participant in the Plan as of
the date such deferrals commence in accordance with Section 4.1.
3.2 CONTINUED PARTICIPATION
A participant in the Plan shall continue to be a Participant so long as any
amount remains credited to his or her Account.
ARTICLE 4 - ELECTIVE DEFERRALS
4.1 ELECTIVE DEFERRALS
An individual who is an Eligible Employee on the Effective Date and who had
a deferral election in effect under the GI Plan as of the Spinoff shall be
deemed to have made such election applicable to the Plan effective from and
after the Spinoff. Any individual who becomes an Eligible Employee after
the Effective Date may, by completing an Election form and filing it with
the Plan Administrator within 30 days after becoming an Eligible Employee,
elect to defer a percentage or dollar amount of one or more payments of
Compensation, on such terms as the Plan Administrator may permit, which are
first available and payable to the Participant after the date on which the
individual files the Election Form.
Any Eligible Employee who has not otherwise initially elected to defer
Compensation in accordance with this paragraph 4.1 may elect to defer a
percentage or dollar amount of one or more payments of Compensation, on
such terms as the Plan Administrator may permit by timely completing an
Election Form.
A Participant may elect to defer only up to 50% of base salary and up to
100% of any bonuses earned under the Company's annual incentive plan for
any Plan Year. Base salary is determined before giving effect to Elective
Deferrals and other salary reduction amounts which are not included in the
Participant's gross income under Code sections 125, 401(k), 402(h) or
403(b).
A Participant's Compensation shall be reduced in accordance with the
Participant's election hereunder and amounts deferred hereunder shall be
paid by the Company to the Trust once per month and credited to the
Participant's Account as of the date the amounts are received by the
Trustee. Elective Deferrals shall not be in effect for any Participant
during any period in which such Participant is eligible to receive benefits
under the Company's long term disability policy.
A Participant's Election Form shall be effective for the Plan Year
specified on the Election Form and for each succeeding Plan Year until such
time as the Participant revokes or revises his election, in writing, by
filing a new Election Form.
ARTICLE 5 - ACCOUNTS
5.1 ACCOUNTS
The Plan Administrator shall establish a bookkeeping Account for each
Participant reflecting Elective Deferrals made for the Participant's
benefit together with any adjustments for income, gain or loss and any
payments from the Account. The Plan Administrator may cause the Trustee to
maintain and invest separate asset accounts corresponding to each
Participant's Account. The Plan Administrator shall establish sub-accounts
for each Participant that has more than one election in effect under
Section 7.1 and such other sub-accounts as are necessary for the proper
administration of the Plan. As of the last business day of each calendar
quarter, the Plan Administrator shall provide the Participant, as soon as
practicable after the end of such quarter, with a statement of his or her
Account reflecting the income, gains and losses (realized and unrealized),
amounts of deferrals, and distributions of such Account since the prior
statement.
5.2 INVESTMENTS
The assets of the Trust shall be invested in such investments as the
Trustee shall determine. The Trustee may (but is not required to) consider
the Company's or a Participant's investment preferences when investing the
assets attributable to a Participant's Account. A Participant, at the time
of making a deferral election, may designate the rate of return, effective
as of the first business day of any calendar quarter, by filing a written
election specifying the change with the Plan Administrator no later than
the fifteenth day of the month preceding the first month of such calendar
quarter. Such designations shall not obligate the Company or the Trustee to
set aside or invest assets designed to provide such rate of return.
ARTICLE 6 - VESTING
6.1 GENERAL
A Participant shall be immediately vested in, i.e., shall have a
nonforfeitable right to, all Elective Deferrals, and all income and gain
attributable thereto, credit to his or her Account.
ARTICLE 7 - PAYMENTS
7.1 ELECTION AS TO TIME AND FORM OF PAYMENT
A Participant shall elect irrevocably on the Election Form the date at
which the Elective Deferrals (including any earnings attributable thereto)
will commence to be paid to the Participant. Such date must be at least
five years following the date at which such Elective Deferrals commence.
The Participant shall also elect thereon for payments to be paid in either:
a. a single lump deferrals sum; or
b. annual installments over a period elected by the Participant up to 10
years, the amount of each installment to equal the balance of his or
her Account immediately prior to the installment divided by the number
of installments remaining to be paid ("Annual Installments ").
Each such election will be effective only for deferrals (including any
earnings or losses attributable thereto) for the Plan Year for which it is
made. Except as provided in Section 7.2, 7.3, 7.4, or 7.5, payment of a
Participant's Account shall be made in accordance with the Participant's
election under this Section 7.1.
7.2 CHANGE OF CONTROL
The Plan will terminate upon a Change of Control. Immediately prior to the
consummation of a transaction resulting in a Change of Control or, if not
possible, as soon as possible following a Change of Control, each
Participant shall be paid his or her entire Account balance in a single
lump sum.
7.3 TERMINATION OF EMPLOYMENT PRIOR TO RETIREMENT AGE
Upon termination of a Participant's employment for any reason including
Total and Permanent Disability, but other than death, prior to the
attainment of the Retirement Age, which is age 55, the Participant's entire
Account shall be paid to the Participant, according to the Participant's
irrevocable election on the Election Form, in a single lump sum as soon as
practicable following the end of the quarter in which such termination
occurs, or in Annual Installments over a period elected by the Participant
up to 10 years, commencing the year immediately following the year in which
such termination occurs.
7.4 DEATH
If a Participant dies prior to the complete distribution of his or her
Account, the balance of the Account shall be paid, according to the
Participant's irrevocable election on the Election Form, to the
Participant's designated beneficiary or beneficiaries, in a single lump sum
as soon as practicable following the end of the quarter in which death
occurs, or in Annual Installments over a period elected by the Participant
up to 10 years, commencing the year immediately following the year in which
death occurs.
Any designation of beneficiary and form of payment to such beneficiary
shall be made by the Participant on a designation/change of beneficiary
form filed with the Plan Administrator and may be changed by the
Participant at any time by filing another designation/change of beneficiary
form containing the revised instructions. If no beneficiary is designated
or no designated beneficiary survives the Participant, payment shall be
made to the Participant's surviving spouse, or, if none, to his or her
issue per stirpes, in a single payment. If no spouse or issue survives the
Participant, payment shall be made in a single lump sum to the
Participant's estate.
7.5 UNFORESEEN EMERGENCY
If a participant suffers an unforeseen emergency, as defined herein, the
Plan Administrator, in its sole discretion, may pay to the Participant only
that portion, if any, of his or her Account which the Plan Administrator
determines is necessary to satisfy the emergency need, including at the
discretion of the Plan Administrator any amounts necessary to pay any
federal, state and local income taxes reasonable anticipated to result from
the distribution.
A Participant requesting an emergency payment shall apply for the payment
in writing in a form approved by the Plan Administrator and shall provide
such additional information as the Plan Administrator may require. For
purposes of this paragraph, "unforeseen emergency" means an immediate and
heavy financial need resulting from any of the following:
a. expenses which are not covered by insurance and which the Participant
or his or her spouse or dependent has incurred as a result of sudden
and unexpected illness or accident; or
b. expenses which are not covered by insurance and which the Participant
or his or her spouse or dependent has incurred or must incur as a
result of a casualty loss.
7.6 TAXES
All federal, state and local taxes that the Plan Administrator determines
are required to be withheld from any payments made pursuant to this Article
7 shall be withheld.
7.7 CLAIMS PROCEDURE
A Participant or beneficiary (a "Claimant") entitled to benefits may file a
claim for such benefits with the Plan Administrator, in such form as
permitted by the Plan Administrator. The claim will be evaluated and a
decision rendered within ninety (90) days, unless special circumstances
require an additional ninety (90) day extension of time.
A Claimant shall be given written notice of whether the claim is granted or
denied, in whole or in part, including (1) specific reasons for the denial,
(2) references to pertinent Plan provisions on which the denial is based,
(3) a description of any additional material or information necessary to
perfect the claim and explanation as to why necessary, and (4) the
Claimant's right to seek review of the denial.
If denied, in whole or in part, the Claimant may make a written request for
review of such denial to the Plan Administrator, within 60 days after
receipt of the denial, and may include pertinent documents, issues and
comments to aid the Plan Administrator. The request will be evaluated and a
decision rendered within sixty (60) days, unless special circumstances
require an additional sixty (60) day extension of time. The written
decision will specify reasons for the decision and references to Plan
provisions upon which the decision is based.
A Claimant who fails to file a claim, or submit a request for review of an
initial claim shall have no right to review and shall have no right to
bring action in any court. The denial of the claim shall be final and
binding on all persons for all purposes.
7.8 SECTION 162(M) LIMITATIONS
In the event that any amount to be paid pursuant to Section 7.1, 7.3, 7.4
or 7.5 would, in the Company's judgment, result in the non-deductibility,
under Section 162(m) of the Code, of any portion of such Participant's
income payable by or attributable to the Company for the year in which such
amount is to be paid, such amount shall not be paid in such year. Such
nondeductible amount shall be payable in the following calendar year, as an
addition to the annual installment scheduled to be paid in such following
calendar year, if applicable, subject to the provisions of this Section
7.8.
ARTICLE 8 - PLAN ADMINISTRATOR
8.1 PLAN ADMINISTRATION AND INTERPRETATION
The Plan Administrator shall oversee the administration of the Plan. The
Plan Administrator shall have complete control and authority to determine
the rights and benefits and all claims, demands and actions arising out of
the provisions of the Plan of any Participant, beneficiary, deceased
Participant, or other person having or claiming to have any interest under
the Plan. The Plan Administrator shall have complete discretion to
interpret the Plan and to decide all matters under the Plan. Such
interpretation and decision shall be final, conclusive and binding on all
Participants and any person claiming under or through any Participant, in
the absence of clear
and convincing evidence that the Plan Administrator acted arbitrarily and
capriciously. Any individual(s) serving as Plan Administrator who is a
Participant will not vote or act on any matter relating solely to himself
or herself. In such case, the CommScope, Inc. of North Carolina will
appoint an individual to act as Plan Administrator to take such actions.
When making a determination or calculation, the Plan Administrator shall be
entitled to rely on information furnished by a Participant, a beneficiary,
the Company or the Trustee. The Plan Administrator shall have the
responsibility for complying with any reporting and disclosure requirements
of ERISA.
8.2 POWERS, DUTIES, PROCEDURES, ETC.
The Plan Administrator shall have such powers and duties, may adopt such
rules and tables, may act in accordance with such procedures, may appoint
such officers or agents, may delegate such powers and duties, may receive
such reimbursements, and shall follow such claims and appeal procedures
with respect to the Plan as it may establish.
8.3 INFORMATION
To enable the Plan Administrator to perform its functions, the Company
shall supply full and timely information to the Plan Administrator on all
matters relating to the compensation of Participants, their employment,
retirement, death, termination of employment, and such other pertinent
facts as the Plan Administrator may require.
8.4 INDEMNIFICATION OF PLAN ADMINISTRATOR
The Company agrees to indemnify and to defend to the fullest extent
permitted by law any officer(s) or employee(s) who serve as Plan
Administrator (including any such individual, whether a present or former
employee, who formerly served as Plan Administrator) against all
liabilities, damages, costs and expenses (including attorneys' fees and
amounts paid in settlement of any claims approved by the CommScope, Inc. of
North Carolina) occasioned by any act or omission to act in connection with
the Plan, if such act or omission is in good faith.
ARTICLE 9 - AMENDMENT AND TERMINATION
9.1 AMENDMENTS
CommScope, Inc. of North Carolina shall have the right to amend the Plan
from time to time, subject to Section 9.3, by an instrument in writing
which has been executed on its behalf by its Chief Executive Officer or his
delegate designated in writing, with or without the specific approval of
the board of directors.
9.2 TERMINATION OF PLAN
This plan is strictly a voluntary undertaking on the part of the Company
and shall not be deemed to constitute a contract between the Company and
any Eligible Employee (or any other employee) or a consideration for, or an
inducement or condition of employment for, the performance of the services
by an Eligible Employee (or other employee). CommScope, Inc. of North
Carolina reserves the right to terminate the Plan at any time, subject to
Section 9.3, by an instrument in writing which has been executed on its
behalf by its Chief Executive Officer or his delegate designated in
writing, with or without the specific approval of the board of directors.
In addition, the Plan shall terminate upon a Change of Control in
accordance with Section 7.2. Upon termination other than pursuant to
Section 7.2, CommScope, Inc. of North Carolina may (a) elect to continue to
maintain the Trust to pay benefits hereunder as they become due as if the
Plan had not terminated or (b) amend the Trust as provided therein to
require prompt payment to Participant's (or their beneficiaries) of the
balance of their Accounts.
9.3 EXISTING RIGHTS
No amendment or termination of the Plan shall adversely affect the rights
of any Participant with respect to amounts that have been credited to his
or her Account prior to the date of such amendment or termination.
ARTICLE 10 - MISCELLANEOUS
10.1 NO FUNDING
The Plan constitutes a mere promise by the Company to make payments in
accordance with the terms of the Plan and Participants and beneficiaries
shall have the status of general unsecured creditors of the Company.
Nothing in the Plan will be construed to give any employee or any other
person rights to any specific assets of the Company or of any other person.
In all events, it is the intent of the Company that the Plan be treated as
unfounded for tax purposes and for purposes of Title I of ERISA.
10.2 NON-ASSIGNABILITY
None of the benefits, payments, proceeds or claims of any participant or
beneficiary shall be subject to any claim of any creditor of any
Participant or beneficiary, nor shall any Participant or beneficiary have
any right to alienate, anticipate, commute, pledge, encumber or assign any
of the benefits or payments or proceeds which he or she may expect to
receive, contingently or otherwise, under the Plan.
10.3 LIMITATION OF PARTICIPANT'S RIGHTS
Nothing contained in the Plan shall confer upon any person a right to be
employed or to continue in the employ of the Company, or interfere in any
way with the right of the Company to terminate the employment of a
Participant in the Plan at any time, with or without cause.
10.4 PARTICIPANTS BOUND
Any action with respect to the Plan taken by CommScope, Inc. of North
Carolina, the Plan Administrator or the Company or the Trustee or any
action authorized by or taken at the direction of the Plan Administrator,
the Company or the Trustee shall be conclusive upon all Participants and
beneficiaries entitled to benefits under the Plan.
10.5 RECEIPT AND RELEASE
Any payment to any Participant or beneficiary in accordance with the
provisions of the Plan shall, to the extent thereof, be in satisfaction of
claims against the Company, the Plan Administrator and the Trustee under
the Plan, and the Plan Administrator may require such Participant or
beneficiary, as a condition precedent to such payment, to execute a receipt
and release to such effect. If any Participant or beneficiary is determined
by the Plan Administrator to be incompetent by reason of physical or mental
disability, including minority, to give a valid receipt and release, the
Plan Administrator may cause the payment or payments becoming due to such
person to be made to another person for his or her benefit without
responsibility on the part of the Plan Administrator, the Company or the
Trustee to follow the application of such funds.
10.6 GOVERNING LAW
The Plan shall be construed, administered, and governed in all respects
under and by the laws of the State of North Carolina. If any provision
shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions hereof shall continue to be fully
effective.
10.7 HEADINGS AND SUBHEADINGS
Headings and subheadings in this Plan are inserted for convenience only and
are not to be considered in the construction of the provisions hereof.
SIGNED AT HICKORY, NORTH CAROLINA THIS ___ DAY OF JULY, 1997.
COMMSCOPE, INC. OF NORTH CAROLINA
BY
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