Exhibit 10.5
MOTOROLA OMNIBUS INCENTIVE PLAN OF 2006
(as amended through March 19, 2009, subject to stockholder approval as
indicated)
     1. Purpose. The purposes of the Motorola Omnibus Incentive Plan of 2006
(the “Plan”) are (i) to encourage outstanding individuals to accept or continue
employment with Motorola, Inc. (“Motorola” or the “Company”) and its
Subsidiaries or to serve as directors of Motorola, 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 stock and cash
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
satisfy such requirements as:
          (a) the Securities and Exchange Commission may establish for
administrators acting under plans intended to qualify for exemption under
Rule 16b-3 or its successor under the Securities Exchange Act of 1934 (the
“Exchange Act”);
          (b) the New York Stock Exchange may establish pursuant to its
rule-making authority; and
          (c) the Internal Revenue Service may establish for outside directors
acting under plans intended to qualify for exemption under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”).
The Compensation and Leadership Committee shall serve as the Committee
administering the Plan until such time as the Board designates a different
Committee.
The Committee shall have the discretionary authority 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, to correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any option or other benefit
granted under the Plan, 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

 

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in accordance with their judgment as to the best interests of Motorola and its
stockholders and in accordance with the purposes of the Plan. 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
authorize one or more officers of the Company to select employees to participate
in the Plan and to determine the number of option shares and other awards to be
granted to such participants, except with respect to awards to officers subject
to Section 16 of the Exchange Act or officers who are, or who are reasonably
expected to be, “covered employees” within the meaning of Section 162(m) of the
Code (“Covered Employees”) and any reference in the Plan to the Committee shall
include such officer or officers.
     3. Participants. Participants may consist of all employees of Motorola and
its Subsidiaries and all non-employee directors of Motorola; provided, however,
the following individuals shall be excluded from participation in the plan:
(a) contract labor (including without limitation black badges, brown badges,
contractors, consultants, contract employees and job shoppers) regardless of
length of service; (b) employees whose base wage or base salary is not processed
for payment by a Payroll Department of Motorola or any Subsidiary; (c) any
individual performing services under an independent contractor or consultant
agreement, a purchase order, a supplier agreement or any other agreement that
the Company enters into for service. Any corporation or other entity in which a
50% or greater interest is at the time directly or indirectly owned by Motorola
and which Motorola consolidates for financial reporting purposes 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.
     4. Shares Available under the Plan. There is hereby reserved for issuance
under the Plan an aggregate of 80 million shares of Motorola common stock. In
connection with approving this Plan, and contingent upon receipt of stockholder
approval of this Plan, the Board of Directors has approved a merger of the
Motorola Omnibus Incentive Plan of 2003, Motorola Omnibus Incentive Plan of
2002, the Motorola Omnibus Incentive Plan of 2000, and the

 

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Motorola Amended and Restated Incentive Plan of 1998 (collectively, the “Prior
Plans”) into this Plan, so that on or after the date this Plan is approved by
stockholders, the maximum number of shares reserved for issuance under this Plan
shall not exceed (a) the total number of shares reserved for issuance under this
Plan plus (b) the number of shares approved and available for grant under the
Prior Plans as of the date of such stockholder approval plus (c) any shares that
become available for issuance pursuant to the remainder of this section 4. If
there is (i) a lapse, expiration, termination, forfeiture or cancellation of any
Stock Option or other benefit outstanding under this Plan, a Prior Plan or under
the Motorola Share Option Plan of 1996 (the “1996 Plan”), prior to the issuance
of shares thereunder or (ii) a forfeiture of any shares of restricted stock or
shares subject to stock awards granted under this Plan, a Prior Plan or the 1996
Plan prior to vesting, then the shares subject to these options or other
benefits shall be added to the shares available for benefits under the Plan (to
the extent permitted under the terms of the Prior Plans or the 1996 Plan if the
award originally occurred under such plan). Shares covered by a benefit granted
under the Plan shall not be counted as used unless and until they are actually
issued and delivered to a participant. Any shares covered by a Stock
Appreciation Right (including a Stock Appreciation Right settled in stock which
the Committee, in its discretion, may substitute for an outstanding Stock
Option) shall be counted as used only to the extent shares are actually issued
to the participant upon exercise of the right. In addition, any shares of common
stock exchanged by an optionee as full or partial payment of the exercise price
under any stock option exercised under the Plan, any shares retained by Motorola
to comply with applicable income tax withholding requirements, and any shares
covered by a benefit which is settled in cash, shall be added to the shares
available for benefits under the Plan (to the extent permitted under the terms
of the Prior Plans or the 1996 Plan if the award originally occurred under such
plan). All shares issued under the Plan may be either authorized and unissued
shares or issued shares reacquired by Motorola. All of the available shares may,
but need not, be issued pursuant to the exercise of Incentive Stock Options (as
defined in Section 422 of the Code); provided, however, notwithstanding an
Option’s designation, to the extent that Incentive Stock Options are exercisable
for the first time by the Participant during any calendar year with respect to
Shares whose aggregate Fair Market Value exceeds $100,000 (regardless of whether
such Incentive Stock Options were granted under this Plan, the Prior Plans or
the 1996 Plan), such Options shall be treated as nonqualified Stock Options.

 

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          Under the Plan, no participant may receive in any calendar year
(i) Stock Options relating to more than 3,000,000 shares, (ii) Stock
Appreciation Rights relating to more than 3,000,000 shares, (iii) Restricted
Stock or Restricted Stock Units relating to more than 1,500,000 shares, (iv)
Performance Shares relating to more than 1,500,000 shares, or (v) Deferred Stock
Units relating to more than 50,000 shares. No non-employee director may receive
in any calendar year Stock Options relating to more than 50,000 shares or
Restricted Stock Units or Deferred Stock Units relating to more than 50,000
shares.
          The shares reserved for issuance and each of the limitations set forth
above shall be subject to adjustment in accordance with section 16 hereof.
     5. Types of Benefits. Benefits under the Plan shall consist of Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Deferred Stock Units, Performance Shares, Performance Cash Awards, Annual
Management Incentive Awards and Other Stock or Cash Awards, all as described
below.
     6. Stock Options. 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 exercise 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 exercise 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 having a
fair market value at the time of exercise equal to the exercise price or
certification of ownership of such previously-acquired shares, (c) to the extent
permitted by applicable law, 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 (d) such
other methods of payment as the

 

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Committee, at its discretion, deems appropriate. Notwithstanding any other
provision of the Plan to the contrary, upon approval of the Company’s
stockholders, the Committee may provide for, and the Company may implement, a
one time only option exchange offer, pursuant to which certain outstanding Stock
Options could, at the election of the person holding such Stock Option, be
tendered to the Company for cancellation in exchange for the issuance of a
lesser amount of Stock Options with a lower exercise price, or other equity
benefit as approved by the Committee, provided that such one time only option
exchange is implemented within twelve months of the date of such stockholder
approval. (Subject to stockholder approval)
     7. Stock Appreciation Rights. Stock Appreciation Rights (“SARs”) may be
granted to participants at any time as determined by the Committee.
Notwithstanding any other provision of the Plan, the Committee may, in its
discretion, substitute SARs which can be settled only in stock for outstanding
Stock Options. The grant price of a substitute SAR shall be equal to the
exercise price of the related option and the substitute SAR shall have
substantive terms (e.g., duration) that are equivalent to the related option.
The grant price of any other 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 substitute SAR or ten years in the case of any
other 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 payment may be made only in
stock. In no event shall the Committee cancel any outstanding SAR for the
purpose of reissuing the right to the participant at a lower grant price or
reduce the grant price of an outstanding SAR.

 

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     8. Restricted Stock and Restricted Stock Units. 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
provides participants the rights to receive shares after vesting in accordance
with the terms of such grant upon the attainment of certain conditions specified
by the Committee. Restricted Stock Units provide participants the right to
receive shares at a future date after vesting in accordance with the terms of
such grant upon the attainment of certain conditions specified 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;
          (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; or
          (c) the attainment of performance goals including without limitation
those described in section 14 hereof.
All restrictions shall expire at such times as the Committee shall specify. In
the Committee’s discretion, participants may be entitled to dividends or
dividend equivalents on awards of Restricted Stock or Restricted Stock Units.
     9. Deferred Stock Units. Deferred Stock Units provide a participant a
vested right to receive shares of common stock in lieu of other compensation at
termination of employment or service or at a specific future designated date. In
the Committee’s discretion, Deferred Stock Units may include the right to be
credited with dividend equivalents in accordance with the terms and conditions
of the units.
     10. Performance Shares. The Committee shall designate the participants to
whom long-term performance stock (“Performance Shares”) 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

 

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award; provided the stated performance period will not be less than 12 months.
Each award of Performance Shares 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 Shares award may be adjusted by the Committee
on the basis of such further consideration as the Committee in its sole
discretion shall determine. However, the Committee may not, in any event,
increase the number of shares earned upon satisfaction of any performance goal
by any participant who is a Covered Employee (as defined in section 2 above).
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 Share award.
     11. Performance Cash Awards. The Committee shall designate the participants
to whom cash incentives based upon long-term performance (“Performance Cash
Awards”) are to be awarded and determine the amount of the award and the terms
and conditions of each such award; provided the stated performance period will
not be less than 12 months. Each Performance Cash 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 Cash Award may be adjusted by the Committee on
the basis of such further consideration as the Committee in its sole discretion
shall determine. However, the Committee may not, in any event, increase the
amount earned under Performance Cash Awards upon satisfaction of any performance
goal by any participant who is a Covered Employee (as defined in section 2
above) and the maximum amount earned by a Covered Employee in any calendar year
may not exceed $10,000,000. 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 Cash Award.

 

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     12. Annual Management Incentive Awards. The Committee may designate
Motorola executive officers who are eligible to receive a monetary payment in
any calendar year based on a percentage of an incentive pool equal to 5% of
Motorola’s “consolidated earnings before income taxes” (as defined below) for
the calendar year. The Committee shall allocate an incentive pool percentage to
each designated executive officer for each calendar year. In no event may the
incentive pool percentage for any one executive officer exceed 30% of the total
pool.
          For the purposes hereof, “consolidated earnings before income taxes”
shall mean the consolidated earnings before income taxes of the Company,
computed in accordance with generally accepted accounting principles, but shall
exclude the effects of: the following items, if and only if, such items are
separately identified in the Company’s quarterly earnings press releases: (i)
extraordinary, unusual and/or non-recurring items of gain or loss, (ii) gains or
losses on the disposition of a business or investment, (iii) changes in tax or
accounting regulations or laws, or (iv) the effect of a merger or acquisition.
          As soon as possible after the determination of the incentive pool for
a Plan year, the Committee shall calculate the executive officer’s allocated
portion of the incentive pool based upon the percentage established at the
beginning of the calendar year. The executive officer’s incentive award then
shall be determined by the Committee based on the executive officer’s allocated
portion of the incentive pool subject to adjustment in the sole discretion of
the Committee. In no event may the portion of the incentive pool allocated to an
executive officer who is a Covered Employee (as defined in section 2 above) be
increased in any way, including as a result of the reduction of any other
executive officer’s allocated portion.
     13. Other Stock or Cash Awards. In addition to the incentives described in
sections 6 through 12 above, the Committee may grant other incentives payable in
cash or 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; provided an outright grant of stock will not be made unless it is
offered in exchange for cash compensation that has otherwise already been earned
by the recipient.
     14. Performance Goals. Awards of Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Cash Awards and other incentives under the Plan
to a Covered Employee (as defined in section 2) may be made subject to the
attainment of performance goals

 

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relating to one or more business criteria within the meaning of Section 162(m)
of the Code, including, but not limited to, cash flow; cost; ratio of debt to
debt plus equity; profit before tax; economic profit; 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; sales
growth; price of Motorola common stock; return on net assets, equity or
stockholders’ equity; market share; or total return to stockholders
(“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 and
may be measured relative to a peer group or index. Performance Criteria shall be
calculated in accordance with the Company’s financial statements (including
without limitation the Company’s “consolidated earnings before income taxes” as
defined in section 12), generally accepted accounting principles, or under an
objective methodology established by the Committee prior to the issuance of an
award which is consistently applied. However, the Committee may not in any event
increase the amount of compensation payable to a Covered Employee upon the
attainment of a performance goal.
     15. 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, (i) all
outstanding Stock Options and SARs shall become vested and exercisable; (ii) all
restrictions on Restricted Stock and Restricted Stock Units shall lapse;
(iii) all performance goals shall be deemed achieved at target levels and all
other terms and conditions met; (iv) all Performance Shares shall be delivered,
all Performance Cash Awards, Deferred Stock Units and Restricted Stock Units
shall be paid out as promptly as practicable; (v) all Annual Management
Incentive Awards shall be paid out at target levels (or earned levels, if
greater) and all other terms and conditions deemed met; and (vi) all Other Stock
or Cash Awards shall be delivered or paid; provided, however, that the treatment
of outstanding awards set forth above (referred to herein as “accelerated
treatment”) shall not apply if and to the extent that such awards are assumed by
the successor corporation (or parent thereof) or are replaced with an award that
preserves the existing value of the award at the time of the Change in Control
and provides for subsequent payout in accordance with the same vesting schedule
applicable to the original award; provided, however, that with respect to any
awards that are assumed or replaced, such assumed or replaced awards shall

 

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provide for the accelerated treatment with respect to any participant that is
involuntarily terminated (for a reason other than “Cause”) or quits for “Good
Reason” within 24 months of the Change in Control.
The term “Cause” shall mean, with respect to any participant, (i) the
participant’s conviction of any criminal violation involving dishonesty, fraud
or breach of trust or (ii) the participant’s willful engagement in gross
misconduct in the performance of the participant’s duties that materially
injures the Company or a Subsidiary.
The term Good Reason shall mean, with respect to any participant, without such
participant’s written consent, (i) the participant is assigned duties materially
inconsistent with his position, duties, responsibilities and status with the
Company or a Subsidiary during the 90-day period immediately preceding a Change
in Control, or the participant’s position, authority, duties or responsibilities
are materially diminished from those in effect during the 90-day period
immediately preceding a Change in Control (whether or not occurring solely as a
result of the Company ceasing to be a publicly traded entity), (ii) the Company
reduces the participant’s annual base salary or target incentive opportunity
under the Company’s annual incentive plan, such target incentive opportunity as
in effect during the 90-day period immediately prior to the Change in Control,
or as the same may be increased from time to time, unless such target incentive
opportunity is replaced by a substantially equivalent substitute opportunity,
(iii) the Company or a Subsidiary requires the participant regularly to perform
his duties of employment beyond a fifty (50) mile radius from the location of
the participant’s employment immediately prior to the Change in Control, or
(iv) the Company purports to terminate the Participant’s employment other than
pursuant to a notice of termination which indicates the Participant’s employment
has been terminated for “Cause” (as defined above) and sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Participant’s employment.

 

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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, or any successor provision thereto, 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 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.

 

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In the event that a payment or delivery of an award following a Change in
Control would not be a permissible distribution event, as defined in
Section 409A(a)(2) of the Code or any regulations or other guidance issued
thereunder, then the payment or delivery shall be made on the earlier of (i) the
date of payment or delivery originally provided for such benefit, or (ii) the
date of termination of the participant’s employment or service with the Company
or six months after such termination in the case of a “specified employee” as
defined in Section 409A(a)(2)(B)(i).
     16. Adjustment Provisions.
          (a) In the event of any change affecting the number, class, market
price or terms of the shares of common stock by reason of stock dividend, stock
split, recapitalization, reorganization, merger, consolidation, spin-off,
disaffiliation of a Subsidiary, combination of shares, exchange of shares, stock
rights offering, or other similar event, or any distribution to the holders of
shares of common stock other than a regular cash dividend, (any of which is
referred to herein as an “equity restructuring”), then the Committee shall make
an equitable substitution or adjustment in the number or class of shares which
may be issued under the Plan in the aggregate or to any one participant in any
calendar year and in the number, class, price or terms of shares subject to
outstanding awards granted under the Plan as it deems appropriate. Such
substitution or adjustment shall equalize an award’s intrinsic and fair value
before and after the equity restructuring.
          (b) In direct connection with the sale, lease, distribution to
stockholders, outsourcing arrangement or any other type of asset transfer or
transfer of any portion of a facility or any portion of a discrete
organizational unit of Motorola or a Subsidiary (a “Divestiture”), the Committee
may authorize the assumption or replacement of affected participants’ awards by
the spun-off facility or organization unit or by the entity that controls the
spun-off facility or organizational unit following disaffiliation.
          (c) In the event of any merger, consolidation or reorganization of
Motorola with or into another corporation which results in the outstanding
common stock of Motorola

 

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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.
          (d) Except in connection with a corporate transaction involving the
Company (including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, or exchange of shares), the
terms of outstanding awards may not be amended to reduce the exercise price of
outstanding Stock Options or SARs or cancel outstanding Stock Options or SARs in
exchange for cash, other awards or Stock Options or SARs with an exercise price
that is less than the exercise price of the original Stock Options or SARs
without stockholder approval.
     17. Substitution and Assumption of Benefits. The Board of Directors or the
Committee may authorize the issuance of benefits under this Plan in connection
with the assumption of, or substitution for, outstanding benefits previously
granted to individuals who become employees of Motorola or any Subsidiary as a
result of any merger, consolidation, acquisition of property or stock, or
reorganization, upon such terms and conditions as the Committee may deem
appropriate. Any substitute Awards granted under the Plan shall not count
against the share limitations set forth in section 4 hereof, to the extent
permitted by Section 303A.08 of the Corporate Governance Standards of the New
York Stock Exchange.
     18. Nontransferability. Each benefit granted under the Plan shall not be
transferable other 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 beneficiary, 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.
Subject to the approval of the Committee in its sole discretion, Stock Options
may be transferable to members of the immediate family of the participant and to
one or

 

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more trusts for the benefit of such family members, partnerships in which such
family members are the only partners, or corporations in which such family
members are the only stockholders. “Members of the immediate family” means the
participant’s spouse, children, stepchildren, grandchildren, parents,
grandparents, siblings (including half brothers and sisters), and individuals
who are family members by adoption.
     19. 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 notice to the person entitled to receive such payment or delivery, and
Motorola may defer making payment or delivery as to any award, if any such tax
is payable, until indemnified to its satisfaction. In connection with the
exercise of a Stock Option or the receipt or vesting of shares hereunder, a
participant may pay all or a portion of any withholding as follows: (a) with the
consent of the Committee, by electing to have Motorola withhold shares of common
stock having a fair market value equal to the amount required to be withheld up
to the minimum required statutory withholding amount; or (b) by delivering
irrevocable instructions to a broker to sell shares and to promptly deliver the
sales proceeds to Motorola for amounts up to and in excess of the minimum
required statutory withholding amount. For restricted stock and restricted stock
unit awards, no withholding in excess of the minimum statutory withholding
amount will be allowed.
     20. Duration of the Plan. No award shall be made under the Plan more than
ten years after the date of its adoption by the Board of Directors; provided,
however, that the terms and conditions applicable to any option 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.
     21. Amendment and Termination. The Board of Directors or the Committee may
amend the Plan from time to time or terminate the Plan at any time. However,
unless expressly provided in an award or pursuant to the terms of any incentive
plan implemented pursuant to this Plan, no such action shall reduce the amount
of any existing award or change the terms and conditions thereof without the
participant’s consent; provided, however, that the Committee may, in its
discretion, substitute SARs which can be settled only in stock for outstanding
Stock Options without a participant’s consent. The Company shall obtain
stockholder approval of any Plan amendment to the extent necessary to comply
with applicable laws, regulations, or stock exchange rules.

 

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     22. Fair Market Value. The fair market value of shares 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.
     23. 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, or 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 effective as of January 1, 2008 cancellation of awards or
benefits, reimbursement of compensation paid or reimbursement of gains realized,
upon certain restatement of financial results.
          (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 provisions of the Plan as they pertain to
such individuals to comply with applicable law, regulation or accounting rules
consistent with the purposes of the Plan and the Board of Directors or the
Committee may, in its discretion, establish one or more sub-plans to reflect
such modified provisions. All sub-plans adopted by the Committee shall be deemed
to be part of the Plan, but each sub-plan shall apply only to Participants
within the affected jurisdiction and the Company shall not be required to
provide copies of any sub-plans to Participants in any jurisdiction which is not
the subject of such sub-plan.
          (c) The Committee, in its sole discretion, may require a participant
to have amounts or shares of common stock that otherwise would be paid or
delivered to the participant

 

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as a result of the exercise or settlement of an award under the Plan credited to
a deferred compensation or stock unit account established for the participant by
the Committee on the Company’s books of account.
          (d) Neither the Plan nor any award shall confer upon a participant any
right with respect to continuing the participant’s employment with the Company;
nor shall they interfere in any way with the participant’s right or the
Company’s right to terminate such relationship at any time, with or without
cause, to the extent permitted by applicable laws and any enforceable agreement
between the employee and the Company.
          (e) No fractional Shares shall be issued or delivered pursuant to the
Plan or any award, and the Committee, in its discretion, shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Shares, or whether such fractional Shares or any rights
thereto shall be canceled, terminated, or otherwise eliminated.
          (f) Payments and other benefits received by a participant under an
award made pursuant to the Plan shall not be deemed a part of a participant’s
compensation for purposes of determining the participant’s benefits under any
other employee benefit plans or arrangements provided by the Company or a
Subsidiary, notwithstanding any provision of such plan to the contrary, unless
the Committee expressly provides otherwise in writing.
          (g) The Committee may permit participants to defer the receipt of
payments of awards pursuant to such rules, procedures or programs it may
establish for purposes of this Plan. Notwithstanding any provision of the Plan
to the contrary, to the extent that awards under the Plan are subject to the
provisions of Section 409A of the Code, then the Plan as applied to those
amounts shall be interpreted and administered so that it is consistent with such
Code section.
     24. 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
Illinois (without regard to any state’s conflict of laws principles). Any legal
action related to this Plan shall be brought only in a federal or state court
located in Illinois.

 

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     25. Stockholder Approval. The Plan was adopted by the Board of Directors on
February 23, 2006, subject to stockholder approval. The Plan and any benefits
granted thereunder shall be null and void if stockholder approval is not
obtained at the next annual meeting of stockholders.