EXHIBIT 10.4

 

MOTOROLA COMPENSATION/ACQUISITION

 

PLAN OF 2000

 

(as amended through April 2, 2004)

 

1. Purpose. The purposes of the Motorola Compensation/Acquisition Plan of 2000
(the “Plan”) are (i) to make awards to employees of Motorola, Inc. (“Motorola”)
and it subsidiaries (excluding directors of Motorola and Officers, as defined
below) in connection with Motorola’s recruiting and retention efforts and (ii)
to furnish maximum incentive to those persons to improve operations and increase
profits and to strengthen the mutuality of interest between those persons and
Motorola’s stockholders by providing them stock options and other incentives.

 

2. Administration. The Plan will be administered by a Committee (the
“Committee”) of the Motorola Board of Directors consisting of two or more
directors as the Board may designate from time to time, each of whom shall
qualify as a “Non-Employee Director” within the meaning set forth in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) or any successor legislation. The Committee shall have the authority to
determine the number of shares of Motorola common stock to be reserved for
issuance under the Plan; to construe and interpret the Plan and any benefits
granted thereunder; to establish and amend rules for Plan administration; to
change the terms and conditions of options and other benefits at or after grant;
and to make all other determinations which it deems necessary or advisable for
the administration of the Plan. The determinations of the Committee shall be
made in accordance with their judgment as to the best interests of Motorola and
its stockholders and in accordance with the purposes of the Plan. A majority of
the members of the Committee shall constitute a quorum, and all determinations
of the Committee shall be made by a majority of its members. Any determination
of the Committee under the Plan may be made without notice or meeting of the
Committee, in writing signed by all the Committee members. The Committee may
delegate the administration of the Plan, in whole or in part, on such terms and
conditions as it may impose, to such other person or persons as it may determine
in its discretion pursuant to section 157(c) of the Delaware General Corporation
Law.

 

3. Participants. Participants may consist of all employees of Motorola and its
subsidiaries other than directors of Motorola and officers within the meaning of
Rule 16a-1 of the Exchange Act (“Officers”). Any corporation or other entity in
which a 50% or greater interest is at the time directly or indirectly owned by
Motorola shall be a subsidiary for purposes of the Plan. Designation of a
participant in any year shall not require the Committee to designate that person
to receive a benefit in any other year or to receive the same type or amount of
benefit as granted to the participant in any other year or as granted to any
other participant in any year. The Committee shall consider all factors that it
deems relevant in selecting participants and in determining the type and amount
of their respective benefits.

 

1

--------------------------------------------------------------------------------

4. Shares Available under the Plan. The Committee has the authority to determine
from time to time the maximum numbers of shares of Motorola common stock
reserved for issuance under the Plan. If there is (i) a lapse, expiration,
termination or cancellation of any stock option or other benefit prior to the
issuance of shares thereunder or (ii) a forfeiture of any shares of restricted
stock or shares subject to stock awards prior to vesting, the shares subject to
these options or other benefits shall be added to the shares available for
benefits under the Plan. In addition, any shares retained by Motorola pursuant
to a participant’s tax withholding election (other than shares used to satisfy
any tax obligation upon the vesting of restricted stock or other stock awards),
and any shares covered by a benefit which is settled in cash, shall be added to
the shares available for benefits under the Plan. All shares issued under the
Plan may be either authorized and unissued shares or issued shares reacquired by
Motorola. The shares reserved for issuance and the limitations set forth above
shall be subject to adjustment in accordance with Section 14 hereof. All of the
available shares may, but need not, be issued pursuant to the exercise of
incentive stock options. Notwithstanding anything else contained in this Section
4 the number of shares that may be issued under the Plan for benefits other than
Stock Options, shall not exceed 10% of the shares authorized for issuance and
reserved by the Committee as described in the Section 4 (subject to adjustment
in accordance with Section 14 hereof).

 

5. Types of Benefits. Benefits under the Plan shall consist of Stock Options,
Stock Appreciation Rights, Restricted Stock, Performance Stock, Performance
Units and Other Stock Awards, all as described below.

 

6. Stock Options. Subject to the terms of the Plan, Stock Options may be granted
to participants, at any time as determined by the Committee. The Committee shall
determine the number of shares subject to each option and whether the option is
an incentive stock option. The option price for each option shall be determined
by the Committee but shall not be less than 100% of the fair market value of
Motorola’s common stock on the date the option is granted. Each option shall
expire at such time as the Committee shall determine at the time of grant.
Options shall be exercisable at such time and subject to such terms and
conditions as the Committee shall determine; provided, however, that no option
shall be exercisable later than the tenth anniversary of its grant. The option
price, upon exercise of any option, shall be payable to Motorola in full by (a)
cash payment or its equivalent, (b) tendering previously acquired shares (held
for at least six months) having a fair market value at the time of exercise
equal to the option price, (c) certification of ownership of such
previously-acquired shares, (d) delivery of a properly executed exercise notice,
together with irrevocable instructions to a broker to promptly deliver to
Motorola the amount of sale proceeds from the option shares or loan proceeds to
pay the exercise price and any withholding taxes due to Motorola, and (e) such
other methods of payment as the Committee, at its discretion, deems appropriate.
In no event shall the Committee cancel any outstanding Stock Option for the
purpose of reissuing the option to the participant at a lower exercise price or
reduce the option price of an outstanding option.

 

7. Stock Appreciation Rights. Stock Appreciation Rights (“SARs”) may be granted
to participants at any time as determined by the Committee. An SAR may be
granted in tandem with a Stock Option granted under this Plan or on a
free-standing basis. The Committee also may, in its discretion, substitute SARs
which can be settled only in stock for outstanding Stock

 

2

--------------------------------------------------------------------------------

Options granted after May 5, 2003, at any time when the Company is subject to
fair value accounting. The grant price of a tandem or substitute SAR shall be
equal to the option price of the related option. The grant price of a
free-standing SAR shall be equal to the fair market value of Motorola’s common
stock on the date of its grant. An SAR may be exercised upon such terms and
conditions and for the term as the Committee in its sole discretion determines;
provided, however, that the term shall not exceed the option term in the case of
a tandem or substitute SAR or ten years in the case of a free-standing SAR and
the terms and conditions applicable to a substitute SAR shall be substantially
the same as those applicable to the Stock Option which it replaces. Upon
exercise of an SAR, the participant shall be entitled to receive payment from
Motorola in an amount determined by multiplying the excess of the fair market
value of a share of common stock on the date of exercise over the grant price of
the SAR by the number of shares with respect to which the SAR is exercised. The
payment may be made in cash or stock, at the discretion of the Committee, except
in the case of a substitute SAR which may be made only in stock.

 

8. Restricted Stock and Restricted Stock Units. Subject to the terms of the
Plan, Restricted Stock and Restricted Stock Units may be awarded or sold to
participants under such terms and conditions as shall be established by the
Committee. Restricted Stock and Restricted Stock Units shall be subject to such
restrictions as the Committee determines, including, without limitation, any of
the following:

 

(a) a prohibition against sale, assignment, transfer, pledge, hypothecation or
other encumbrance for a specified period; or

 

(b) a requirement that the holder forfeit (or in the case of shares or units
sold to the participant resell to Motorola at cost) such shares or units in the
event of termination of employment during the period of restriction.

 

All restrictions shall expire at such times as the Committee shall specify.

 

9. Performance Stock. Subject to the terms of the Plan, the Committee shall
designate the participants to whom long-term performance stock (“Performance
Stock”) is to be awarded and determine the number of shares, the length of the
performance period and the other terms and conditions of each such award. Each
award of Performance Stock shall entitle the participant to a payment in the
form of shares of common stock upon the attainment of performance goals and
other terms and conditions specified by the Committee.

 

Notwithstanding satisfaction of any performance goals, the number of shares
issued under a Performance Stock award may be adjusted by the Committee on the
basis of such further consideration as the Committee in its sole discretion
shall determine. The Committee may, in its discretion, make a cash payment equal
to the fair market value of shares of common stock otherwise required to be
issued to a participant pursuant to a Performance Stock award.

 

10. Performance Units. Subject to the terms of the Plan, the Committee shall
designate the participants to whom long-term performance units (“Performance
Units”) are to be awarded and determine the number of units and the terms and
conditions of each such award.

 

3

--------------------------------------------------------------------------------

Each Performance Unit award shall entitle the participant to a payment in cash
upon the attainment of performance goals and other terms and conditions
specified by the Committee.

 

Notwithstanding the satisfaction of any performance goals, the amount to be paid
under a Performance Unit award may be adjusted by the Committee on the basis of
such further consideration as the Committee in its sole discretion shall
determine. The Committee may, in its discretion, substitute actual shares of
common stock for the cash payment otherwise required to be made to a participant
pursuant to a Performance Unit award.

 

11. Other Stock Awards. In addition to the incentives described in Sections 6
through 10 above, and subject to the terms of the Plan, the Committee may grant
other incentives payable in common stock under the Plan as it determines to be
in the best interests of Motorola and subject to such other terms and
conditions, as it deems appropriate.

 

12. Performance Goals. Awards of Restricted Stock, Performance Stock,
Performance Units and other incentives under the Plan may be made subject to the
attainment of performance goals, including, but not limited to, cash flow; cost;
ratio of debt to debt plus equity; profit before tax; earnings before interest
and taxes; earnings before interest, taxes, depreciation and amortization;
earnings per share; operating earnings; economic value added; ratio of operating
earnings to capital spending; free cash flow; net profit; net sales; price of
Company Stock; return on net assets, equity or stockholders’ equity; market
share; or total return to shareholders (“Performance Criteria”). Any Performance
Criteria may be used to measure the performance of the Company as a whole or any
business unit of the Company. Any Performance Criteria may include or exclude
Extraordinary Items. Performance Criteria shall be calculated in accordance with
the Company’s financial statements, generally accepted accounting principles, or
under a methodology established by the Committee prior to the issuance of an
award which is consistently applied and identified in the audited financial
statements, including footnotes, or the Management Discussion and Analysis
section of the Company’s annual report.

 

13. Change in Control. Except as otherwise determined by the Committee at the
time of grant of an award, upon a Change in Control of Motorola, all outstanding
Stock Options and SARs shall become vested and exercisable; all restrictions on
Restricted Stock shall lapse; all performance goals shall be deemed achieved at
target levels and all other terms and conditions met; all Performance Stock
shall be delivered; all Performance Units shall be paid out as promptly as
practicable; and all other Stock Awards shall be delivered or paid. A “Change in
Control” shall mean:

 

A Change in Control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act whether or not Motorola is then subject to such reporting
requirement; provided that, without limitation, such a Change in Control shall
be deemed to have occurred if (a) any “person” or “group” (as such terms are
used in Section 13(d) and 14(d) of the Exchange Act) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of Motorola representing 20% or more of the
combined voting power of Motorola’s then outstanding securities (other than
Motorola or any employee

 

4

--------------------------------------------------------------------------------

benefit plan of Motorola; and, for purposes of the Plan, no Change in Control
shall be deemed to have occurred as a result of the “beneficial ownership,” or
changes therein, of Motorola’s securities by either of the foregoing), (b) there
shall be consummated (i) any consolidation or merger of Motorola in which
Motorola is not the surviving or continuing corporation or pursuant to which
shares of common stock would be converted into or exchanged for cash, securities
or other property, other than a merger of Motorola in which the holders of
common stock immediately prior to the merger have, directly or indirectly, at
least a 65% ownership interest in the outstanding common stock of the surviving
corporation immediately after the merger, or (ii) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of Motorola other than any such transaction
with entities in which the holders of Motorola Common Stock, directly or
indirectly, have at least a 65% ownership interest, (c) the stockholders of
Motorola approve any plan or proposal for the liquidation or dissolution of
Motorola, or (d) as the result of, or in connection with, any cash tender offer,
exchange offer, merger or other business combination, sale of assets, proxy or
consent solicitation (other than by the Board), contested election or
substantial stock accumulation (a “Control Transaction”), the members of the
Board immediately prior to the first public announcement relating to such
Control Transaction shall thereafter cease to constitute a majority of the Board

 

14. Adjustment Provisions.

 

(a) If Motorola shall at any time change the number of issued shares of common
stock by stock dividend or stock split, the total number of shares reserved for
issuance under the Plan, and the number of shares covered by each outstanding
award and the price therefor, if any, shall be equitably adjusted by the
Committee, in its sole discretion.

 

(b) Subject to the provisions of Section 13, the Board of Directors or the
Committee may authorize the issuance or assumption of benefits under this Plan
in connection with any merger, consolidation, acquisition of property or stock,
or reorganization upon such terms and conditions as it may deem appropriate.

 

(c) In the event of any merger, consolidation or reorganization of Motorola with
or into another corporation, other than a merger, consolidation or
reorganization in which Motorola is the continuing corporation and which does
not result in the outstanding common stock being converted into or exchanged for
different securities, cash or other property, or any combination thereof, there
shall be substituted, on an equitable basis as determined by the Committee in
its discretion, for each share of common stock then subject to a benefit granted
under the Plan, the number and kind of shares of stock, other securities, cash
or other property to which holders of common stock of Motorola will be entitled
pursuant to the transaction.

 

5

--------------------------------------------------------------------------------

15. Nontransferability. Each benefit granted under the Plan shall not be
transferable otherwise than by will or the laws of descent and distribution and
each Stock Option and SAR shall be exercisable during the participant’s lifetime
only by the participant or, in the event of disability, by the participant’s
personal representative. In the event of the death of a participant, exercise of
any benefit or payment with respect to any benefit shall be made only by or to
the executor or administrator of the estate of the deceased participant or the
person or persons to whom the deceased participant’s rights under the benefit
shall pass by will or the laws of descent and distribution.

 

16. Taxes. Motorola shall be entitled to withhold the amount of any tax
attributable to any amounts payable or shares deliverable under the Plan, after
giving the person entitled to receive such payment or delivery notice and
Motorola may defer making payment or delivery as to any award, if any such tax
is payable until indemnified to its satisfaction. The Committee may, in its
discretion, subject to such rules as it may adopt, permit a participant to pay
all or a portion of any required withholding taxes arising in connection with
the exercise of a Stock Option or SAR or the receipt or vesting of shares
hereunder by electing to have Motorola withhold shares of common stock, having a
fair market value equal to the amount to be withheld.

 

17. Duration, Amendment and Termination. No Incentive Stock Option shall be
granted more than ten years after the date of adoption of this Plan by the Board
of Directors; provided, however, that the terms and conditions applicable to any
benefit granted on or before such date may thereafter be amended or modified by
mutual agreement between Motorola and the participant, or such other person as
may then have an interest therein. The Board of Directors or the Committee may
amend the Plan from time to time or terminate the Plan at any time. However, no
such action shall reduce the amount of any existing award or change the terms
and conditions thereof without the participant’s consent.

 

18. Fair Market Value. The fair market value of Motorola’s common stock at any
time shall be determined in such manner as the Committee may deem equitable, or
as required by applicable law or regulation.

 

19. Other Provisions.

 

(a) The award of any benefit under the Plan may also be subject to other
provisions (whether or not applicable to the benefit awarded to any other
participant) as the Committee determines appropriate, including provisions
intended to comply with federal or state securities laws and stock exchange
requirements, understandings or conditions as to the participant’s employment,
requirements or inducements for continued ownership of common stock after
exercise or vesting of benefits, forfeiture of awards in the event of
termination of employment shortly after exercise or vesting, or breach of
noncompetition or confidentiality agreements following termination of
employment, or provisions permitting the deferral of the receipt of a benefit
for such period and upon such terms as the Committee shall determine.

 

(b) In the event any benefit under this Plan is granted to an employee who is
employed or providing services outside the United States and who is not
compensated from a payroll maintained in the United States, the Committee may,
in its sole discretion, modify the

 

6

--------------------------------------------------------------------------------

provisions of the Plan as they pertain to such individuals to comply with
applicable law, regulation or accounting rules.

 

20. Governing Law. The Plan and any actions taken in connection herewith shall
be governed by and construed in accordance with the laws of the state of
Delaware (without regard to applicable Delaware principles of conflict of laws).

 

21. Broad-Based Plan. The Plan is intended to be a broadly based plan under the
rules of the New York Stock Exchange.

 

7