Exhibit 4.5
AMENDED AND RESTATED
COMMSCOPE, INC.
1997 LONG-TERM INCENTIVE PLAN
(AS AMENDED THROUGH MAY 5, 2000)
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TABLE OF CONTENTS
Page
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1. Establishment, Purpose and Effective Date.............................1
(a) Establishment...................................................1
(b) Purpose.........................................................1
(c) Effective Date..................................................1
2. Definitions...........................................................1
3. Scope of the Plan.....................................................6
(a) Number of Shares Available Under the Plan.......................6
(b) Reduction in the Available Shares in Connection with Award
Grants..........................................................7
(c) Effect of the Expiration or Termination of Awards...............7
4. Administration........................................................8
(a) Committee Administration........................................8
(b) Board Reservation and Delegation................................8
(c) Committee Authority.............................................8
(d) Committee Determinations Final..................................9
5. Eligibility...........................................................9
6. Conditions to Grants.................................................10
(a) General Conditions.............................................10
(b) Grant of Options and Option Price..............................10
(c) Grant of Incentive Stock Options...............................11
(d) Grant of Shares of Restricted Stock............................12
(e) Grant of Performance Units and Performance Shares..............14
(f) Grant of Phantom Stock.........................................15
(g) Grant of Director's Shares.....................................15
(h) Tandem Awards..................................................16
7. Non-transferability..................................................16
8. Exercise.............................................................16
(a) Exercise of Options............................................16
(b) Exercise of Performance Units..................................17
(c) Payment of Performance Shares..................................18
(d) Payment of Phantom Stock Awards................................19
(e) Exercise, Cancellation, Expiration or Forfeiture of Tandem
Awards.........................................................19
9. Spin-off and Substitute Options......................................19
10. Effect of Certain Transactions.......................................19
11. Mandatory Withholding Taxes..........................................19
12. Termination of Employment............................................20
13. Securities Law Matters...............................................20
14. No Funding Required..................................................21
15. No Employment Rights.................................................21
16. Rights as a Stockholder..............................................21
17. Nature of Payments...................................................21
18. Non-Uniform Determinations...........................................21
19. Adjustments..........................................................22
20. Amendment of the Plan................................................22
21. Termination of the Plan..............................................22
22. No Illegal Transactions..............................................23
23. Governing Law........................................................23
24. Severability.........................................................23
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1. Establishment, Purpose and Effective Date.
(a) Establishment. The Company hereby establishes the Amended and
Restated CommScope, Inc. 1997 Long-Term Incentive Plan (as set forth herein
and from time to time amended, the "Plan").
(b) Purpose. The primary purpose of the Plan is to provide a
means by which key employees and directors of the Company and its
Subsidiaries can acquire and maintain stock ownership, thereby
strengthening their commitment to the success of the Company and its
Subsidiaries and their desire to remain employed by the Company and its
Subsidiaries, focusing their attention on managing the Company as an equity
owner, and aligning their interests with those of the Company's
stockholders. The Plan also is intended to attract and retain key employees
and to provide such employees with additional incentive and reward
opportunities designed to encourage them to enhance the profitable growth
of the Company and its Subsidiaries.
(c) Effective Date. The Plan shall become effective upon its
adoption by the Board.
2. Definitions.
As used in the Plan, terms defined parenthetically immediately after
their use shall have the respective meanings provided by such definitions
and the terms set forth below shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of
the terms defined):
(a) "Award" means Options, shares of restricted Stock,
performance units, performance shares or Director's Shares
granted under the Plan.
(b) "Award Agreement" means the written agreement by which an
Award is evidenced.
(c) "Beneficial Owner," "Beneficially Owned" and "Beneficially
Owning" shall have the meanings applicable under Rule 13d-3
promulgated under the 1934 Act.
(d) "Board" means the board of directors of the Company.
(e) "Change in Capitalization" means any increase or reduction
in the number of shares of Stock, or any change in the
shares of Stock or exchange of shares of Stock for a
different number or kind of shares or other securities by
reason of a stock dividend, extraordinary dividend, stock
split, reverse stock split, share combination,
reclassification, recapitalization, merger, consolidation,
spin-off, split-up, reorganization, issuance of warrants or
rights, liquidation, exchange of shares, repurchase of
shares, change in corporate structure, or similar event, of
or by the Company.
(f) "Change of Control" means, any of the following:
(i) the acquisition by any Person of Beneficial Ownership of
Voting Securities which, when added to the Voting Securities then
Beneficially Owned by such Person, would result in such Person
Beneficially Owning 33% or more of the combined Voting Power of
the Company's then outstanding Voting Securities; provided,
however, that for purposes of this paragraph (i), a Person shall
not be deemed to have made an acquisition of Voting Securities if
such Person: (1) acquires Voting Securities as a result of a
stock split, stock dividend or other corporate restructuring in
which all stockholders of the class of such Voting Securities are
treated on a pro rata basis; (2) acquires the Voting Securities
directly from the Company; (3) becomes the Beneficial Owner of
33% or more of the combined Voting Power of the Company's then
outstanding Voting Securities solely as a result of the
acquisition of Voting Securities by the Company or any Subsidiary
which, by reducing the number of Voting Securities outstanding,
increases the proportional number of shares Beneficially Owned by
such Person, provided that if (x) a Person would own at least
such percentage as a result of the acquisition by the Company or
any Subsidiary and (y) after such acquisition by the Company or
any Subsidiary, such Person acquires Voting Securities, then an
acquisition of Voting Securities shall have occurred; (4) is the
Company or any corporation or other Person of which a majority of
its voting power or its equity securities or equity interest is
owned directly or indirectly by the Company (a "Controlled
Entity"); or (5) acquires Voting Securities in connection with a
"Non-Control Transaction" (as defined in paragraph (iii) below);
or
(ii) the individuals who, as of the Effective Date, are
members of the Board (the "Incumbent Board") cease for any reason
to constitute at least two-thirds of the Board; provided,
however, that if either the election of any new director or the
nomination for election of any new director by the Company's
stockholders was approved by a vote of at least two-thirds of the
Incumbent Board prior to such election or nomination, such new
director shall be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be considered
a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened
"Election Contest" (as described in Rule 14a-11 promulgated under
the 1934 Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board (a "Proxy Contest") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy
Contest; or
(iii) approval by stockholders of the Company of:
(A) a merger, consolidation or reorganization involving
the Company (a "Business Combination"), unless
(1) the stockholders of the Company, immediately
before the Business Combination, own, directly or
indirectly immediately following the Business
Combination, at least a majority of the combined voting
power of the outstanding voting securities of the
corporation resulting from the Business Combination
(the "Surviving Corporation") in substantially the same
proportion as their ownership of the Voting Securities
immediately before the Business Combination, and
(2) the individuals who were members of the
Incumbent Board immediately prior to the execution of
the agreement providing for the Business Combination
constitute at least a majority of the members of the
Board of Directors of the Surviving Corporation, and
(3) no Person (other than the Company or any
Controlled Entity, a trustee or other fiduciary holding
securities under one or more employee benefit plans or
arrangements (or any trust forming a part thereof)
maintained by the Company, the Surviving Corporation or
any Controlled Entity, or any Person who, immediately
prior to the Business Combination, had Beneficial
Ownership of 33% or more of the then outstanding Voting
Securities) has Beneficial Ownership of 33% or more of
the combined voting power of the Surviving
Corporation's then outstanding voting securities (a
Business Combination satisfying the conditions of
clauses (1), (2) and (3) of this subparagraph (A) shall
be referred to as a "Non-Control Transaction");
(B) a complete liquidation or dissolution of the Company; or
(C) the sale or other disposition of all or
substantially all of the assets of the Company (other than a
transfer to a Controlled Entity).
Notwithstanding the foregoing, a Change of Control shall not be deemed
to occur solely because 33% or more of the then outstanding Voting
Securities is Beneficially Owned by (x) a trustee or other fiduciary
holding securities under one or more employee benefit plans or arrangements
(or any trust forming a part thereof) maintained by the Company or any
Controlled Entity or (y) any corporation which, immediately prior to its
acquisition of such interest, is owned directly or indirectly by the
stockholders of the Company in the same proportion as their ownership of
stock in the Company immediately prior to such acquisition.
(g) "Committee" means the committee of the Board appointed
pursuant to Article 4.
(h) "Company" means CommScope, Inc., a Delaware corporation.
(i) "Director's Shares" means the shares of Stock awarded to a
nonemployee director of the Company pursuant to Article
6(h).
(j) "Disability" means a mental or physical condition which, in
the opinion of the Committee, renders a Grantee unable or
incompetent to carry out the job responsibilities which such
Grantee held or the duties to which such Grantee was
assigned at the time the disability was incurred, and which
is expected to be permanent or for an indefinite duration.
(k) "Effective Date" means the date that the Plan is adopted by
the Board.
(l) "Fair Market Value" of any security of the Company or any
other issuer means, as of any applicable date:
(i) if the security is listed for trading on the New York
Stock Exchange, the closing price, regular way, of the security
as reported on the New York Stock Exchange Composite Tape, or if
no such reported sale of the security shall have occurred on such
date, on the next preceding date on which there was such a
reported sale, or
(ii) if the security is not so listed, but is listed on
another national securities exchange or authorized for quotation
on the National Association of Securities Dealers Inc.'s NASDAQ
National Market System ("NASDAQ/NMS"), the closing price, regular
way, of the security on such exchange or NASDAQ/NMS, as the case
may be, or if no such reported sale of the security shall have
occurred on such date, on the next preceding date on which there
was such a reported sale, or
(iii) if the security is not listed for trading on a
national securities exchange or authorized for quotation on
NASDAQ/NMS, the average of the closing bid and asked prices as
reported by the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or, if no such prices shall
have been so reported for such date, on the next preceding date
for which such prices were so reported, or
(iv) if the security is not listed for trading on a national
securities exchange or is not authorized for quotation on
NASDAQ/NMS or NASDAQ, the fair market value of the security as
determined in good faith by the Committee.
(m) "Grant Date" means the date of grant of an Award determined
in accordance with Article 6.
(n) "Grantee" means an individual who has been granted an Award.
(o) "Incentive Stock Option" means an Option satisfying the
requirements of Section 422 of the Internal Revenue Code and
designated by the Committee as an Incentive Stock Option.
(p) "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, and regulations and rulings thereunder.
References to a particular Section of the Internal Revenue
Code shall include references to successor provisions.
(q) "Measuring Period" has the meaning specified in Article
6(f)(ii)(B).
(r) "Minimum Consideration" means the $.0l par value per share
of Stock or such larger amount determined pursuant to
resolution of the Board to be capital within the meaning of
Section 154 of the Delaware General Corporation Law.
(s) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(t) "Nonqualified Stock Option" means an Option which is not an
Incentive Stock Option or other type of statutory stock
option under the Internal Revenue Code.
(u) "Option" means an option to purchase Stock granted or issued
under the Plan, including Substitute and Spin-off Options.
(v) "Option Price" means the per share purchase price of (i)
Stock subject to an Option or (ii) restricted Stock subject
to an Option.
(w) "Performance-Based Compensation" means any Option or Award
that is intended to constitute "performance based
compensation" within the meaning of Section 162(m)(4)(C) of
the Code and the regulations promulgated thereunder.
(x) "Performance Percentage" has the meaning specified in
Article 6(f)(ii)(C).
(y) "Person" means a person within the meaning of Sections 13(d)
and 14(d) of the 1934 Act.
(z) "Plan" has the meaning set forth in Article 1(a).
(aa) "SEC" means the Securities and Exchange Commission.
(bb) "Section 16 Grantee" means a person subject to potential
liability with respect to equity securities of the Company
under Section 16(b) of the 1934 Act.
(cc) "Spin-off Option" means an Option that has been issued under
this Plan to certain named persons pursuant to the Employee
Benefits Allocation Agreement between General Semiconductor,
Inc. ("GS"), CommScope, Inc. and the Company, dated June 25,
1997, as amended, modified, or otherwise supplemented (the
"Benefits Agreement").
(dd) "Stock" means common stock, par value $.01 per share, of the
Company.
(ee) "Subsidiary" means a corporation as [defined in Section
424(f) of the Internal Revenue Code, with the Company being
treated as the employer corporation for purposes of this
definition].
(ff) "Substitute Option" means an Option that has been issued
under this Plan to certain persons pursuant to the Benefits
Agreement.
(gg) "10% Owner" means a person who owns stock (including stock
treated as owned under Section 424(d) of the Internal
Revenue Code) possessing more than 10% of the Voting Power
of the Company.
(hh) "Termination of Employment" occurs the first day on which an
individual is for any reason no longer employed by the
Company or any of its Subsidiaries, or with respect to an
individual who is an employee of a Subsidiary, the first day
on which the Company no longer owns Voting Securities
possessing at least 50% of the Voting Power of such
Subsidiary.
(ii) "Voting Power" means the combined voting power of the then
outstanding Voting Securities.
(jj) "Voting Securities" means, with respect to the Company or
any Subsidiary, any securities issued by the Company or such
Subsidiary, respectively, which generally entitle the holder
thereof to vote for the election of directors of the
Company.
3. Scope of the Plan.
(a) Number of Shares Available Under the Plan. The maximum number
of shares of Stock that may be made the subject of Awards granted under the
Plan is 6,600,000 plus the number of shares of Stock that are covered by
Substitute Options and Spin-off Options (or the number and kind of shares
of Stock or other securities to which such shares of Stock are adjusted
upon a Change in Capitalization pursuant to Article 18); provided, however,
that in the aggregate, not more than 200,000 shares of Stock may be made
the subject of Awards other than Options. The maximum number of shares of
Stock that may be the subject of Options (other than Substitute Options and
Spin-off Options) and Awards granted to any individual pursuant to the Plan
in any three (3) calendar year period may not exceed 500,000. The maximum
dollar amount of cash or the Fair Market Value of Stock that any individual
may receive in any calendar year in respect of performance units
denominated in dollars may not exceed $1,000,000. The Company shall reserve
for the purpose of the Plan, out of its authorized but unissued shares of
Stock or out of shares held in the Company's treasury, or partly out of
each, such number of shares as shall be determined by the Board. The Board
shall have the authority to cause the Company to purchase from time to time
shares of Stock to be held as treasury shares and used for or in connection
with Awards. The issuance of Substitute Options and Spin-off Options shall
not reduce the shares available for grants under the Plan or to a Grantee
in any calendar year.
(b) Reduction in the Available Shares in Connection with Award
Grants. Upon the grant of an Award, the number of shares of Stock available
under Article 3(a) for the granting of further Awards shall be reduced as
follows:
(i) Performance Units Denominated in Dollars. In connection
with the granting of each performance unit denominated in
dollars, the number of shares of Stock available under Article
3(a) for the granting of further Awards shall be reduced by the
quotient of (x) the dollar amount represented by the performance
unit divided by (y) the Fair Market Value of a share of Stock on
the date immediately preceding the Grant Date of the performance
unit.
(ii) Other Awards. In connection with the granting of each
Award, other than a performance unit denominated in dollars, the
number of shares of Stock available under Article 3(a) for the
granting of further Awards shall be reduced by a number of shares
equal to the number of shares of Stock in respect of which the
Award is granted or denominated; provided, however, that if any
Award is exercised by tendering shares of Stock, either actually
or by attestation, to the Company as full or partial payment of
the exercise price, the maximum number of shares of Stock
available under Section 3(a) shall be increased by the number of
shares of Stock so tendered.
Notwithstanding the foregoing, where two or more Awards are granted
with respect to the same shares of Stock, such shares shall be taken into
account only once for purposes of this Article 3(b).
(c) Effect of the Expiration or Termination of Awards. If and to
the extent an Option or Award (including a Substitute Option or a Spin-off
Option) expires, terminates or is canceled, settled in cash (including the
settlement of tax withholding obligations using shares of Stock) or
forfeited for any reason without having been exercised in full (including,
without limitation, a cancellation of an Option pursuant to Article
4(c)(vi)), the shares of Stock associated with the expired, terminated,
canceled, settled or forfeited portion of the Award (to the extent the
number of shares available for the granting of Awards was reduced pursuant
to Article 3(b)) shall again become available for Awards under the Plan.
4. Administration.
(a) Committee Administration. Subject to Article 4(b), the Plan
shall be administered by the Committee, which shall consist of not less
than two "non-employee directors" within the meaning of Rule 16b-3, and to
the extent necessary for any Award intended to qualify as Performance-Based
Compensation to so qualify, each member of the Committee shall be an
"outside director" within the meaning of Section 162(m) of the Internal
Revenue Code.
(b) Board Reservation and Delegation. The Board may, in its
discretion, reserve to itself or exercise any or all of the authority and
responsibility of the Committee hereunder. It may also delegate to another
committee of the Board any or all of the authority and responsibility of
the Committee with respect to Awards to Grantees who are not Section 16
Grantees at the time any such delegated authority or responsibility is
exercised. Such other committee may consist of one or more directors who
may, but need not be, officers or employees of the Company or of any of its
Subsidiaries. To the extent that the Board has reserved to itself, or
exercised the authority and responsibility of the Committee, or delegated
the authority and responsibility of the Committee to such other committee,
all references to the Committee in the Plan shall be to the Board or to
such other committee.
(c) Committee Authority. The Committee shall have full and final
authority, in its discretion, but subject to the express provisions of the
Plan, as follows:
(i) to grant Awards,
(ii) to determine (A) when Awards may be granted, and (B)
whether or not specific Awards shall be identified with other
specific Awards, and if so, whether they shall be exercisable
cumulatively with, or alternatively to, such other specific
Awards,
(iii) to issue Substitute Options and Spin-off Options,
(iv) to interpret the Plan and to make all determinations
necessary or advisable for the administration of the Plan,
(v) to prescribe, amend, and rescind rules and regulations
relating to the Plan, including, without limitation, rules with
respect to the exercisability and nonforfeitability of Awards
upon the Termination of Employment of a Grantee,
(vi) to determine the terms and provisions of the Award
Agreements, which need not be identical and, with the consent of
the Grantee, to modify any such Award Agreement at any time,
(vii) to cancel, with the consent of the Grantee,
outstanding Awards,
(viii) to accelerate the exercisability of, and to
accelerate or waive any or all of the restrictions and conditions
applicable to, any Award,
(ix) to make such adjustments or modifications to Awards to
Grantees working outside the United States as are necessary and
advisable to fulfill the purposes of the Plan,
(x) to authorize any action of or make any determination by
the Company as the Committee shall deem necessary or advisable
for carrying out the purposes of the Plan, and
(xi) to impose such additional conditions, restrictions, and
limitations upon the grant, exercise or retention of Awards as
the Committee may, before or concurrently with the grant thereof,
deem appropriate, including, without limitation, requiring
simultaneous exercise of related identified Awards, and limiting
the percentage of Awards which may from time to time be exercised
by a Grantee.
(d) Committee Determinations Final. The determination of the
Committee on all matters relating to the Plan or any Award Agreement shall
be conclusive and final. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Award.
5. Eligibility.
Awards may be granted to any employee of the Company or any of its
Subsidiaries. In selecting the individuals to whom Awards may be granted,
as well as in determining the number of shares of Stock subject to, and the
other terms and conditions applicable to, each Award, the Committee shall
take into consideration such factors as it deems relevant in promoting the
purposes of the Plan. In addition, Nonqualified Stock Options will be
granted to nonemployee directors of the Company, as set forth in Article
6(b)(ii), and Director's Shares will be issued to nonemployee directors of
the Company pursuant to Article 6(h).
6. Conditions to Grants.
(a) General Conditions.
(i) The Grant Date of an Award shall be the date on which
the Committee grants the Award or such later date as specified in
advance by the Committee.
(ii) The term of each Award (subject to Article 6(c) with
respect to Incentive Stock Options) shall be a period of not more
than ten years from the Grant Date and shall be subject to
earlier termination as provided herein or in the applicable Award
Agreement; provided, however, that the Committee may provide that
an Option (other than an Incentive Stock Option) may, upon the
death of the Grantee, be exercised for up to one year following
the date of the Grantee's death even if such period extends
beyond ten years from the date the Option is granted.
(iii) A Grantee may, if otherwise eligible, be granted
additional Awards in any combination.
(iv) The Committee may grant Awards with terms and
conditions which differ among the Grantees thereof. To the extent
not set forth in the Plan, the terms and conditions of each Award
shall be set forth in an Award Agreement.
(b) Grant of Options and Option Price. The Committee may, in its
discretion, and shall as provided in Article 6(b)(ii), grant Options as
follows:
(i) Employee Options. Options to acquire unrestricted Stock
or restricted Stock may be granted to any employee eligible under
Article 5 to receive Awards. No later than the Grant Date of any
Option, the Committee shall determine the Option Price which
shall not be less than 100% of the Fair Market Value of the Stock
on the Grant Date.
(ii) Nonemployee Director Options. Nonqualified Stock
Options with respect to 20,000 shares of unrestricted Stock shall
be granted to each nonemployee director of the Company (other
than a nonemployee director who is a general partner of any of
the Forstmann Little Companies or any of their affiliates) upon
his or her initial election to the Board and every three years
thereafter on the anniversary of such nonemployee director's
initial election to the Board as long as such nonemployee
director is then still serving on the Board, at an Option Price
equal to 100% of the Fair Market Value of the Stock on the Grant
Date; provided, however, that the Grant Date of the first grants
of Nonqualified Stock Options to nonemployee directors under this
Plan shall be the fifth trading day after the NextLevel Systems
Distribution Date (as defined in the Benefits Agreement). Each
Nonqualified Stock Option granted to a nonemployee director will
become exercisable with respect to one-third of the underlying
shares on each of the first, second and third anniversaries of
the Grant Date, and will have a term of ten years. If a
nonemployee director ceases to serve as a director of the Company
for any reason, any Nonqualified Stock Option granted to such
nonemployee director shall be exercisable during its remaining
term, to the extent that such Nonqualified Stock Option was
exercisable on the date such nonemployee director ceased to be a
director.
(c) Grant of Incentive Stock Options. At the time of the grant of
any Option, the Committee may designate that such Option shall be an
Incentive Stock Option. Any Option designated as an Incentive Stock Option:
(i) shall have an Option Price of (A) not less than 100% of
the Fair Market Value of the Stock on the Grant Date or (B) in
the case of a 10% Owner, not less than 110% of the Fair Market
Value of the Stock on the Grant Date;
(ii) shall have a term of not more than ten years (five
years, in the case of a 10% Owner) from the Grant Date, and shall
be subject to earlier termination as provided herein or in the
applicable Award Agreement;
(iii) shall, if, with respect to any grant, the aggregate
Fair Market Value of Stock (determined on the Grant Date) of all
Incentive Stock Options granted under the Plan and "incentive
stock options" (within the meaning of Section 422 of the Code)
granted under any other stock option plan of the Grantee's
employer or any parent or subsidiary thereof (in either case
determined without regard to this Article 6(c)) are exercisable
for the first time during any calendar year exceeds $100,000, be
treated as Nonqualified Stock Options. For purposes of the
foregoing sentence, Incentive Stock Options shall be treated as
Nonqualified Stock Options according to the order in which they
were granted such that the most recently granted Incentive Stock
Options are first treated as Nonqualified Stock Options.
(iv) shall be granted within ten years from the earlier of
the date the Plan is adopted by the Board or the date the Plan is
approved by the stockholders of the Company; and
(v) shall require the Grantee to notify the Committee of any
disposition of any Stock issued pursuant to the exercise of the
Incentive Stock Option under the circumstances described in
Section 421(b) of the Internal Revenue Code (relating to certain
disqualifying dispositions), within ten days of such disposition.
(d) Grant of Shares of Restricted Stock.
(i) The Committee may, in its discretion, grant shares of
restricted Stock to any employee eligible under Article 5 to
receive Awards.
(ii) Before the grant of any shares of restricted Stock, the
Committee shall determine, in its discretion:
(A) whether the certificates for such shares shall be
delivered to the Grantee or held (together with a stock
power executed in blank by the Grantee) in escrow by the
Secretary of the Company until such shares become
nonforfeitable or are forfeited;
(B) the per share purchase price of such shares, which
may be zero; provided, however, that the per share purchase
price of all such shares (other than treasury shares) shall
not be less than the Minimum Consideration for each such
share;
(C) the restrictions applicable to such grant and the
time or times upon which any applicable restrictions on the
restricted Stock shall lapse; provided, however, that except
in the case of shares of restricted Stock issued in full or
partial settlement of another Award or other earned
compensation, or in the event of the Grantee's termination
of employment, as determined by the Committee and set forth
in an Award Agreement, such restrictions shall not lapse
prior to the third anniversary of the Grant Date of the
restricted Stock; and
(D) whether the payment to the Grantee of dividends, or
a specified portion thereof, declared or paid on such shares
by the Company shall be deferred until the lapsing of the
restrictions imposed upon such shares and shall be held by
the Company for the account of the Grantee, whether such
dividends shall be reinvested in additional shares of
restricted Stock (to the extent shares are available under
Article 3) subject to the same restrictions and other terms
as apply to the shares with respect to which such dividends
are issued or otherwise reinvested in Stock or held in
escrow, whether interest will be credited to the account of
the Grantee with respect to any dividends which are not
reinvested in restricted or unrestricted Stock, and whether
any Stock dividends issued with respect to the restricted
Stock to be granted shall be treated as additional shares of
restricted Stock.
(iii) Payment of the purchase price (if greater than zero)
for shares of restricted Stock shall be made in full by the
Grantee before the delivery of such shares and, in any event, no
later than ten days after the Grant Date for such shares. Such
payment may be made, as determined by the Committee in its
discretion, in any one or any combination of the following:
(A) cash; or
(B) with the prior approval of the Committee, shares of
restricted or unrestricted Stock owned by the Grantee prior
to such grant and valued at its Fair Market Value on the
business day immediately preceding the date of payment;
provided, however, that, in the case of payment in shares of
restricted or unrestricted Stock, if the purchase price for
restricted Stock ("New Restricted Stock") is paid with shares of
restricted Stock ("Old Restricted Stock"), the restrictions
applicable to the New Restricted Stock shall be the same as if
the Grantee had paid for the New Restricted Stock in cash unless,
in the judgment of the Committee, the Old Restricted Stock was
subject to a greater risk of forfeiture, in which case a number
of shares of New Restricted Stock equal to the number of shares
of Old Restricted Stock tendered in payment for New Restricted
Stock shall be subject to the same restrictions as the Old
Restricted Stock, determined immediately before such payment.
(iv) The Committee may, but need not, provide that all or
any portion of a Grantee's Award of restricted Stock shall be
forfeited:
(A) except as otherwise specified in the Award
Agreement, upon the Grantee's Termination of Employment
within a specified time period after the Grant Date; or
(B) if the Company or the Grantee does not achieve
specified performance goals within a specified time period
after the Grant Date and before the Grantee's Termination of
Employment; or
(C) upon failure to satisfy such other restrictions as
the Committee may specify in the Award Agreement.
(v) If a share of restricted Stock is forfeited, then:
(A) the Grantee shall be deemed to have resold such
share of restricted Stock to the Company at the lesser of
(1) the purchase price paid by the Grantee (such purchase
price shall be deemed to be zero dollars ($0) if no purchase
price was paid) or (2) the Fair Market Value of a share of
Stock on the date of such forfeiture;
(B) the Company shall pay to the Grantee the amount
determined under clause (A) of this sentence, if not zero,
as soon as is administratively practicable, but in any case
within 90 days after forfeiture; and
(C) such share of restricted Stock shall cease to be
outstanding, and shall no longer confer on the Grantee
thereof any rights as a stockholder of the Company, from and
after the date of the Company's tender of the payment
specified in clause (B) of this sentence, whether or not
such tender is accepted by the Grantee, or the date the
restricted Stock is forfeited if no purchase price was paid
for the restricted Stock.
(vi) Any share of restricted Stock shall bear an appropriate
legend specifying that such share is non-transferable and subject
to the restrictions set forth in the Plan and the Award
Agreement. If any shares of restricted Stock become
nonforfeitable, the Company shall cause certificates for such
shares to be issued or reissued without such legend and delivered
to the Grantee or, at the request of the Grantee, shall cause
such shares to be credited to a brokerage account specified by
the Grantee.
(e) Grant of Performance Units and Performance Shares.
(i) The Committee may, in its discretion, grant performance
units or performance shares to any employee eligible under
Article 5 to receive Awards.
(ii) Before the grant of any performance unit or performance
share, the Committee shall:
(A) designate a period, of not less than one year nor
more than five years, for the measurement of the extent to
which performance goals are attained (the "Measuring
Period");
(B) determine performance goals applicable to such
grant; provided, however, that the performance goals with
respect to a Measuring Period shall be established in
writing by the Committee by the earlier of (x) the date on
which a quarter of the Measuring Period has elapsed or (y)
the date which is ninety (90) days after the commencement of
the Measuring Period, and in any event while the performance
relating to the performance goals remain substantially
uncertain; and
(C) assign a "Performance Percentage" to each level of
attainment of performance goals during the Measuring Period,
with the percentage applicable to minimum attainment being
zero percent (0%) and the percentage applicable to optimum
attainment to be determined by the Committee from time to
time.
(iii) The performance goals applicable to performance units
or performance shares shall, in the discretion of the Committee,
be based on stock price, earnings per share, operating income,
return on equity or assets, cash flow, EBITDA or any combination
of the foregoing. Such performance goals may be absolute or
relative (to prior performance or to the performance of one or
more other entities or external indices) and may be expressed in
terms of a progression within a specified range. At the time of
the granting of performance units or performance shares, or at
any time thereafter, in either case to the extent permitted under
Section 162(m) of the Code and the regulations thereunder without
adversely affecting the treatment of the performance unit or
performance share as Performance-Based Compensation, the
Committee may provide for the manner in which performance will be
measured against the performance goals (or may adjust the
performance goals) to reflect the impact of specified corporate
transactions, special charges, foreign currency effects,
accounting or tax law changes and other extraordinary or
nonrecurring events.
(iv) Prior to the vesting, payment, settlement or lapsing of
any restrictions with respect to any performance unit or
performance share that is intended to constitute
Performance-Based Compensation made to a Grantee who is subject
to Section 162(m) of the Code, the Committee shall certify in
writing that the applicable performance goals have been
satisfied.
(v) Unless otherwise expressly stated in the relevant Award
Agreement, each performance unit and performance share granted
under the Plan is intended to be Performance-Based Compensation
and the Committee shall interpret and administer the applicable
provisions of the Plan in a manner consistent therewith. Any
provisions inconsistent with such treatment shall be inoperative
and shall not adversely affect the treatment of performance units
or performance shares granted hereunder as Performance-Based
Compensation. The Committee shall not be entitled to exercise any
discretion otherwise authorized hereunder with respect to such
performance unit or performance share if the ability to exercise
such discretion or the exercise of such discretion itself would
cause the compensation attributable to such performance unit or
performance share to fail to qualify as Performance-Based
Compensation.
(f) Grant of Phantom Stock. The Committee may, in its discretion,
grant shares of phantom stock to any employee who is eligible under Article
5 to receive Awards. Such phantom stock shall be subject to the terms and
conditions established by the Committee and set forth in the applicable
Award Agreement.
(g) Grant of Director's Shares. There shall be granted Director's
Shares with respect to 1,000 shares of Stock to each nonemployee director
of the Company (other than a nonemployee director who is a general partner
of any of the Forstmann Little Companies or any of their affiliates) upon
his or her initial election to the Board. Director's Shares shall be fully
vested and transferable upon issuance.
(h) Tandem Awards. The Committee may grant and identify any Award
with any other Award granted under the Plan ("Tandem Award"), other than a
Substitute Option or a Spin-off Option, on terms and conditions determined
by the Committee.
7. Non-transferability.
Unless set forth in the applicable Award Agreement, no Award (other
than an Award of restricted Stock) granted hereunder shall by its terms be
assignable or transferable except by will or the laws of descent and
distribution or, in the case of an Option other than an Incentive Stock
Option, pursuant to a domestic relations order (within the meaning of Rule
16a-12 promulgated under the Exchange Act). An Option may be exercised
during the lifetime of a Grantee only by the Grantee or his or her guardian
or legal representatives. Notwithstanding the foregoing, the Committee may
set forth in the Award Agreement evidencing an Award (other than an
Incentive Stock Option) at the time of grant or thereafter, that the Award
may be transferred to members of the Grantee's immediate family, to trusts
solely for the benefit of such immediate family members and to partnerships
in which such family members and/or trusts are the only partners, and for
purposes of this Plan, a transferee of an Award shall be deemed to be the
Grantee. For this purpose, immediate family means the Grantee's spouse,
parents, children, stepchildren and grandchildren and the spouses of such
parents, children, stepchildren and grandchildren. The terms of an Award
shall be final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Grantee. Each share of
restricted Stock shall be non-transferable until such share becomes
nonforfeitable.
8. Exercise.
(a) Exercise of Options. Subject to Articles 4(c)(vii), 12 and 13
and such terms and conditions as the Committee may impose, each Option
shall be exercisable in one or more installments commencing not earlier
than the first anniversary of the Grant Date of such Option; provided,
however, that all Options held by each Grantee shall become fully (100%)
exercisable upon the occurrence of a Change of Control regardless of
whether the acceleration of the exercisability of such Options would cause
such Options to lose their eligibility for treatment as Incentive Stock
Options. Notwithstanding the foregoing, Options may not be exercised by a
Grantee for twelve months following a hardship distribution to the Grantee,
to the extent such exercise is prohibited under Treasury Regulation
ss.1.401(k)-1(d)(2)(iv)(B)(4). Each Option shall be exercised by delivery
to the Company of written notice of intent to purchase a specific number of
shares of Stock subject to the Option. The Option Price of any shares of
Stock as to which an Option shall be exercised shall be paid in full at the
time of the exercise. Payment may be made, as determined by the Committee
in its discretion with respect to Options granted to eligible employees and
in all cases with respect to Options granted to nonemployee directors
pursuant to Article 6(b)(ii), in any one or any combination of the
following:
(i) cash,
(ii) shares of unrestricted Stock held by the Grantee for at
least six months (or such lesser period as may be permitted by
the Committee) prior to the exercise of the Option, and valued at
its Fair Market Value on the last business day immediately
preceding the date of exercise, or
(iii) through simultaneous sale through a broker of shares
of unrestricted Stock acquired on exercise, as permitted under
Regulation T of the Federal Reserve Board.
Shares of unrestricted Stock acquired by a Grantee on exercise of
an Option shall be delivered to the Grantee or, at the request of the
Grantee, shall be credited directly to a brokerage account specified by the
Grantee.
(b) Exercise of Performance Units.
(i) Subject to Articles 4(c)(vii), 12 and 13 and such terms
and conditions as the Committee may impose, and unless otherwise
provided in the applicable Award Agreement, if, with respect to
any performance unit, the Committee has determined in accordance
with Article 6(f)(iv) that the minimum performance goals have
been achieved during the applicable Measuring Period, then such
performance unit shall be deemed exercised on the date on which
it first becomes exercisable.
(ii) The benefit for each performance unit exercised shall
be an amount equal to the product of
(A) the Unit Value (as defined below), multiplied by
(B) the Performance Percentage attained during the
Measuring Period for such performance unit.
(iii) The Unit Value shall be, as specified by the
Committee,
(A) a dollar amount,
(B) an amount equal to the Fair Market Value of a share
of Stock on the Grant Date,
(C) an amount equal to the Fair Market Value of a share
of Stock on the exercise date of the performance unit, plus,
if so provided in the Award Agreement, an amount ("Dividend
Equivalent Amount") equal to the Fair Market Value of the
number of shares of Stock that would have been purchased if
each dividend paid on a share of Stock on or after the Grant
Date and on or before the exercise date were invested in
shares of Stock at a purchase price equal to its Fair Market
Value on the respective dividend payment date, or
(D) an amount equal to the Fair Market Value of a share
of Stock on the exercise date of the performance unit (plus,
if so specified in the Award Agreement, a Dividend
Equivalent Amount), reduced by the Fair Market Value of a
share of Stock on the Grant Date of the performance unit.
(iv) The benefit upon the exercise of a performance unit
shall be payable as soon as is administratively practicable (but
in any event within 90 days) after the later of (A) the date the
Grantee is deemed to exercise such performance unit, or (B) the
date (or dates in the event of installment payments) as provided
in the applicable Award Agreement. Such benefit shall be payable
in cash, except that the Committee, with respect to any
particular exercise, may, in its discretion, pay benefits wholly
or partly in Stock delivered to the Grantee or credited to a
brokerage account specified by the Grantee. The number of shares
of Stock payable in lieu of cash shall be determined by valuing
the Stock at its Fair Market Value on the business day next
preceding the date such benefit is to be paid.
(c) Payment of Performance Shares. Subject to Articles 4(c)(vii),
12 and 13 and such terms and conditions as the Committee may impose, and
unless otherwise provided in the applicable Award Agreement, if the
Committee has determined in accordance with Article 6(f)(iv) that the
minimum performance goals with respect to an Award of performance shares
have been achieved during the applicable Measuring Period, then the Company
shall pay to the Grantee of such Award (or, at the request of the Grantee,
deliver to a brokerage account specified by the Grantee) shares of Stock
equal in number to the product of the number of performance shares
specified in the applicable Award Agreement multiplied by the Performance
Percentage achieved during such Measuring Period, except to the extent that
the Committee in its discretion determines that cash be paid in lieu of
some or all of such shares of Stock. The amount of cash payable in lieu of
a share of Stock shall be determined by valuing such share at its Fair
Market Value on the business day next preceding the date such cash is to be
paid. Payments pursuant to this Article 8(d) shall be made as soon as
administratively practicable (but in any event within 90 days) after the
end of the applicable Measuring Period. Any performance shares with respect
to which the performance goals have not been achieved by the end of the
applicable Measuring Period shall expire.
(d) Payment of Phantom Stock Awards. Upon the vesting of a
phantom stock Award, the Grantee shall be entitled to receive a cash
payment in respect of each share of phantom stock which shall be equal to
the Fair Market Value of a share of Stock as of the date the phantom stock
Award was granted, or such other date as determined by the Committee at the
time the phantom stock Award was granted. The Committee may, at the time a
phantom stock Award is granted, provide a limitation on the amount payable
in respect of each share of phantom stock. In lieu of a cash payment, the
Committee may settle phantom stock Awards with shares of Stock having a
Fair Market Value equal to the cash payment to which the Grantee has become
entitled.
(e) Exercise, Cancellation, Expiration or Forfeiture of Tandem
Awards. Upon the exercise, cancellation, expiration, forfeiture or payment
in respect of any Award which is identified with any Tandem Award pursuant
to Article 6(i), the Tandem Award shall automatically terminate to the
extent of the number of shares in respect of which the Award is so
exercised, cancelled, expired, forfeited or paid, unless otherwise provided
by the Committee at the time of grant of the Tandem Award or thereafter.
9. Spin-off and Substitute Options.
Spin-off Options and Substitute Options shall be issued under this
Plan pursuant to and in accordance with the terms of the Benefits
Agreement. Spin-off Options and Substitute Options shall be governed by the
terms of the Plan to the extent that the terms of the Plan do not conflict
with the terms of the agreements evidencing the Spin-off Options and
Substitute Options.
10. Effect of Certain Transactions.
With respect to any Award which relates to Stock, in the event of (i)
the liquidation or dissolution of the Company or (ii) a merger or
consolidation of the Company (a "Transaction"), the Plan and the Awards
issued hereunder shall continue in effect in accordance with their
respective terms and each Grantee shall be entitled to receive in respect
of each share of Stock subject to any outstanding Awards, upon the vesting,
payment or exercise of the Award (as the case may be), the same number and
kind of stock, securities, cash, property, or other consideration that each
holder of a share of Stock was entitled to receive in the Transaction in
respect of a share of Stock.
11. Mandatory Withholding Taxes.
The Company shall have the right to deduct from any distribution of
cash to any Grantee an amount equal to the federal, state and local income
taxes and other amounts as may be required by law to be withheld (the
"Withholding Taxes") with respect to any Award. If a Grantee is to
experience a taxable event in connection with the receipt of shares
pursuant to an Option exercise or the vesting or payment of another type of
Award (a "Taxable Event"), the Grantee shall pay the Withholding Taxes to
the Company prior to the issuance, or release from escrow, of such shares
or payment of such Award. Payment of the applicable Withholding Taxes may
be made, as determined by the Committee in its discretion, in any one or
any combination of (i) cash, (ii) shares of restricted or unrestricted
Stock owned by the Grantee prior to the Taxable Event and valued at its
Fair Market Value on the business day immediately preceding the date of
exercise, or (iii) by making a Tax Election (as described below). For
purposes of this Article 11, the Committee may provide in the Award
Agreement at the time of grant, or at any time thereafter, that the
Grantee, in satisfaction of the obligation to pay Withholding Taxes to the
Company, may elect to have withheld a portion of the shares then issuable
to him or her having an aggregate Fair Market Value equal to the
Withholding Taxes.
12. Termination of Employment.
The Award Agreement pertaining to each Award shall set forth the terms
and conditions applicable to such Award upon a Termination of Employment of
the Grantee by the Company, a Subsidiary or an operating division or unit,
which, except for Options granted to nonemployee directors pursuant to
Article 6(b)(ii), shall be as the Committee may, in its discretion,
determine at the time the Award is granted or thereafter.
13. Securities Law Matters.
(a) If the Committee deems it necessary to comply with the
Securities Act of 1933, the Committee may require a written investment
intent representation by the Grantee and may require that a restrictive
legend be affixed to certificates for shares of Stock.
(b) If, based upon the opinion of counsel for the Company, the
Committee determines that the exercise or nonforfeitability of, or delivery
of benefits pursuant to, any Award would violate any applicable provision
of (i) federal or state securities law or (ii) the listing requirements of
any national securities exchange on which are listed any of the Company's
equity securities, then the Committee may postpone any such exercise,
nonforfeitability or delivery, as the case may be, but the Company shall
use its best efforts to cause such exercise, nonforfeitability or delivery
to comply with all such provisions at the earliest practicable date.
(c) Notwithstanding any provision of the Plan or any Award
Agreement to the contrary, no shares of Stock shall be issued to any
Grantee in respect of any Award prior to the time a registration statement
under the Securities Act of 1933 is effective with respect to such shares.
14. No Funding Required.
Benefits payable under the Plan to any person shall be paid directly
by the Company. The Company shall not be required to fund, or otherwise
segregate assets to be used for payment of, benefits under the Plan.
15. No Employment Rights.
Neither the establishment of the Plan, nor the granting of any Award
shall be construed to (a) give any Grantee the right to remain employed by
the Company or any of its Subsidiaries or to any benefits not specifically
provided by the Plan or (b) in any manner modify the right of the Company
or any of its Subsidiaries to modify, amend, or terminate any of its
employee benefit plans.
16. Rights as a Stockholder.
A Grantee shall not, by reason of any Award (other than restricted
Stock), have any right as a stockholder of the Company with respect to the
shares of Stock which may be deliverable upon exercise or payment of such
Award until such shares have been delivered to him. Shares of restricted
Stock held by a Grantee or held in escrow by the Secretary of the Company
shall confer on the Grantee all rights of a stockholder of the Company,
except as otherwise provided in the Plan.
17. Nature of Payments.
Any and all grants, payments of cash, or deliveries of shares of Stock
hereunder shall constitute special incentive payments to the Grantee and
shall not be taken into account in computing the amount of salary or
compensation of the Grantee for the purposes of determining any pension,
retirement, death or other benefits under (a) any pension, retirement,
profit-sharing, bonus, life insurance or other employee benefit plan of the
Company or any of its Subsidiaries or (b) any agreement between the Company
or any Subsidiary, on the one hand, and the Grantee, on the other hand,
except as such plan or agreement shall otherwise expressly provide.
18. Non-Uniform Determinations.
Neither the Committee's nor the Board's determinations under the Plan
need be uniform and may be made by the Committee or the Board selectively
among persons who receive, or are eligible to receive, Awards (whether or
not such persons are similarly situated). Without limiting the generality
of the foregoing, the Committee shall be entitled, among other things, to
make non-uniform and selective determinations, to enter into non-uniform
and selective Award Agreements as to (a) the identity of the Grantees, (b)
the terms and provisions of Awards, and (c) the treatment of Terminations
of Employment.
19. Adjustments.
In the event of Change in Capitalization, the Committee shall, in its
sole discretion, make equitable adjustment of
(a) the aggregate number and class of shares of Stock or other
stock or securities available under Article 3,
(b) the number and class of shares of Stock or other stock or
securities covered by an Award and to be covered by Options
granted to nonemployee directors pursuant to Article
6(b)(ii),
(c) the Option Price applicable to outstanding Options,
(d) the terms of performance unit and performance share grants
(to the extent permitted under Section 162(m)) of the Code
and the regulations thereunder without adversely affecting
the treatment of the performance unit or performance share
as Performance-Based Compensation,
(e) the Fair Market Value of Stock to be used to determine the
amount of the benefit payable upon exercise of performance
units, performance shares or phantom stock,
(f) the maximum number and class of shares of Stock or other
securities with respect to which Awards may be granted to
any individual in any three calendar year period, and
(g) the number and class of shares of Stock or other securities
with respect to which Director Shares are to be granted
under Article 6(h).
20. Amendment of the Plan.
The Board may from time to time in its discretion amend or modify the
Plan without the approval of the stockholders of the Company, except as
such stockholder approval may be required (a) to retain Incentive Stock
Option treatment under Section 422 of the Internal Revenue Code, (b) to
permit transactions in Stock pursuant to the Plan to be exempt from
potential liability under Section 16(b) of the 1934 Act or (c) under the
listing requirements of any securities exchange on which any of the
Company's equity securities are listed.
21. Termination of the Plan.
The Plan shall terminate on the tenth (10th) anniversary of the
Effective Date or at such earlier time as the Board may determine. Any
termination, whether in whole or in part, shall not affect any Award then
outstanding under the Plan.
22. No Illegal Transactions.
The Plan and all Awards granted pursuant to it are subject to all laws
and regulations of any governmental authority which may be applicable
thereto; and notwithstanding any provision of the Plan or any Award,
Grantees shall not be entitled to exercise Awards or receive the benefits
thereof and the Company shall not be obligated to deliver any Stock or pay
any benefits to a Grantee if such exercise, delivery, receipt or payment of
benefits would constitute a violation by the Grantee or the Company of any
provision of any such law or regulation.
23. Governing Law.
Except where preempted by federal law, the law of the State of
Delaware shall be controlling in all matters relating to the Plan, without
giving effect to the conflicts of law principles thereof.
24. Severability.
If all or any part of the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of the Plan not
declared to be unlawful or invalid. Any Article or part of an Article so
declared to be unlawful or invalid shall, if possible, be construed in a
manner which will give effect to the terms of such Article or part of an
Article to the fullest extent possible while remaining lawful and valid.
