Exhibit No. 10.31
2006 Motorola Incentive Plan
Overview
The 2006 Motorola Incentive Plan has been established to retain Employees
through competitive rewards, attract premier talent, align individual efforts
with business goals, and reward Employees for strong business performance. The
Plan is based on successive calendar-year performance periods commencing 1
January 2006. The Plan is being implemented pursuant to the terms and conditions
of the Omnibus Plan. Capitalized terms are defined in the “Definitions” section
below.
Eligibility
To be eligible to participate in this Plan, an individual must be:

  •   A full-time or part-time Employee of Motorola assigned to a Participating
Organization;     •   Not a participant in any other annual group incentive or
bonus plan (e.g., sales commission plans, etc.); and     •   The Employee must
meet one of the following conditions:

  §   The Employee is active on a Company payroll as of the end of the Plan
Year;     §   The Employee is on a Leave of Absence as of the end of the Plan
Year;

 

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  §   The Employee Retired from the Company during the Plan Year while actively
employed or from a Leave of Absence; or     §   The Employee died during the
Plan Year while actively employed by the Company or while on a Leave of Absence.

The MIP Committee may modify the foregoing eligibility provisions to exclude
groups of employees on a country-wide or business unit/organizational basis as
the MIP Committee deems necessary or appropriate.
Award Calculation
Awards will be calculated and paid after the close of each Plan Year on which
the awards are based. The award amount will be based on Eligible Earnings, the
Target Award Percentage, and the Business and Individual Performance Factors, as
follows:
Individual Award  =  Eligible Earnings  x  Target Award Percentage  x  Business
Performance Factor  x  Individual Performance Factor
Target Award Percentages, Business Performance Factors and Individual
Performance Factors for each Plan Year shall be determined by the Compensation
Committee. Business Performance Factors shall be based on Operating Earnings,
Operating Cash Flow, Revenue Growth, Quality and such other factors as may be
determined by the Compensation Committee in its complete discretion.
Payout Process

  •   All earned awards will be paid in cash. Payment will be made as soon as
administratively practical following the close of a Plan Year.     •   A
Participant shall have no right to any award until that award is paid.

 

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Administration

  •   The Compensation Committee has the overall responsibility for
administering and amending this Plan; subject to the following:

  •   The Compensation Committee, in its discretion, can include or exclude
individual items from the calculation of the Business Performance Factors for
good reason.     •   The Compensation Committee has delegated to the MIP
Committee the authority to manage the day-to-day administration of the Plan
including without limitation the discretionary authority to (i) administer and
interpret the terms of the Plan, and (ii) amend the Plan only as necessary to
reflect any ministerial, administrative or managerial functions; provided that
any such amendment does not alter the Business Performance Factor once
established for any Participating Organization or the Motorola-Wide Business
Performance Factor for any Plan Year and provided that any such amendment does
not increase the total payout under the Plan unless such increase is minor and
due to increased Target Award Percentages, additional Participants, or other
administrative changes.     •   The Compensation Committee has delegated certain
responsibilities to the Chief Executive Officer of the Company, the exercise of
which cannot result in an increased aggregate cost of the Plan in any Plan Year.
    •   The Compensation Committee specifically reserves to itself the authority
to set the initial Target Award and to determine any final award payment for any
Participant who is (i) subject to Section 162(m), (ii) subject to Section 16, or
(iii)

 

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      designated as a member of the Motorola Senior Leadership Team.

  •   Any claims for payments under the Plan or any other matter relating to the
Plan must be presented in writing to the MIP Committee within 60 days after the
event that is the subject of the claim. The MIP Committee will then provide a
response within 60 days, which shall be final and binding.

General Provisions

  •   Awards are subject to all applicable withholding taxes and other required
deductions.     •   The Plan will not be available to Employees who are subject
to the laws of any jurisdiction which prohibits any provisions of this Plan or
in which tax or other business considerations make participation impracticable
in the judgment of the MIP Committee.     •   This Plan does not constitute a
guarantee of employment nor does it restrict the Company’s rights to terminate
employment at any time or for any reason.     •   The Plan and any individual
award is offered as a gratuitous award at the sole discretion of the Company.
The Plan does not create vested rights of any nature nor does it constitute a
contract of employment or a contract of any other kind. The Plan does not create
any customary concession or privilege to which there is any entitlement from
year-to-year, except to the extent required under applicable law. Nothing in the
Plan entitles an Employee to any remuneration or benefits not set forth in the
Plan nor does it restrict the Company’s rights to increase or decrease the
compensation of any Employee, except as otherwise required under applicable law.
    •   Except as explicitly provided by law, the awards shall not become a part
of any employment condition, regular salary, remuneration package, contract or
agreement, but shall remain gratuitous in all respects. Awards are not to be

 

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      taken into account for determining overtime pay, severance pay,
termination pay, pay in lieu of notice, or any other form of pay or
compensation.     •   Except as explicitly provided by law, this Plan is
provided at the Company’s sole discretion and the Compensation Committee may
modify or terminate it at any time, prospectively or retroactively, without
notice or obligation for any reason. In addition, there is no obligation to
extend the Plan or establish a replacement plan in subsequent years.     •   The
Plan shall not be funded in any way. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of awards. To the extent any person acquires a
right to receive payment under the Plan, such right will be no greater than the
right of an unsecured general creditor of the Company.     •   Award
opportunities may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution.     •   The Compensation Committee establishes the following
administrative provisions reflecting changes in Employee status during the Plan
Year:

  §   Because employee retention is an important objective of this Plan and
awards do not bear a precise relationship to time worked within the calendar
year or length of service with the Company, Participants who separate from
employment (payroll) prior to the end of the Plan Year (for reasons other than
death or Retirement) shall not receive any award attributable to that Plan Year.
    §   In the event a Participant (i) remains on payroll as an active Employee
or is on a Leave of Absence at the end of a Plan Year, but is not actually
working, (ii) Retires or dies prior to the end of the Plan Year while actively
employed or on a Leave of Absence, any award received by the Participant shall
be based solely on the Participant’s Eligible Earnings for the time the
Participant actually worked during the Plan Year. Any such award payable

 

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      on behalf of a deceased Participant shall be paid to the decedent’s
estate. A Participant on any type of leave of absence shall not be considered to
be actually working for purposes of this Plan.     §   Awards for transferred,
promoted or demoted Participants will be calculated using (i) the Individual
Performance Factor assigned at the end of the Plan Year and (ii) the Target
Award Percentages and Business Performance Factors prorated for the portions of
the Plan Year the Participant was assigned different target awards or was in
different Participating Organizations during the Plan Year; provided, however,
that the Target Award may not be increased without Compensation Committee
approval for any Participant who is (i) subject to Section 162(m), (ii) subject
to Section 16, or (iii) designated as a member of the Motorola Senior Leadership
Team.

The MIP Committee may modify the foregoing provisions as it deems necessary or
appropriate to apply to groups of employees on a country-wide or business
unit/organizational basis as the MIP Committee deems necessary or appropriate.

 

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Definitions
Company: Motorola, Inc. and its subsidiaries.
Compensation Committee: the Compensation and Leadership Committee of the Board
of Directors.
Divested: the sale, lease, outsourcing arrangement, spin-off or similar
transaction wherein a subsidiary is sold or whose shares are distributed to the
Motorola stockholders, or any other type of asset transfer or transfer of any
portion of a facility or any portion of a discrete organizational unit of
Company or a subsidiary.
Eligible Earnings: the MIP Committee will determine Eligible Earnings for each
country, consistent with their respective legal and practical requirements. The
MIP Committee may determine inclusions and exclusions from Eligible Earnings to
apply to groups of employees on a country-wide or business unit/organizational
basis as the MIP Committee deems necessary or appropriate.
Employee: a person in an employee-employer relationship with the Company whose
base wage or base salary is processed for payment by the payroll department(s)
of the Company or a subsidiary and not by any other department of the Company.
The term Employee shall exclude the following:

  •   Any independent contractor, consultant, or individual performing services
for the Company who has entered into an independent contractor or consultant
agreement;     •   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 services;     •   Any
person classified by the Company as a temporary or contract labor (such as black
badges, brown badges, contractors, contract employees, job shoppers) regardless
of the length of service; and

 

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  •   Any “leased employee” as defined in Section 414(n) of the U.S. Internal
Revenue Code of 1986, as amended.

Such individuals shall be precluded from retroactive participation in the Plan
even if a court or governmental or regulatory entity subsequently reclassifies
such individuals as common law employees of the Company on a retroactive basis.
Leave of Absence: an approved leave of absence.
MIP Committee: a committee to which the Compensation Committee may delegate
certain powers and duties as described above. Unless otherwise determined, the
MIP Committee will consist of the Senior Human Resources Officer, a senior
Compensation Officer, and a senior Finance Officer. The MIP Committee may
establish self-governance procedures such as by-laws, and shall keep minutes
regarding all actions taken by the MIP Committee.
Retired or Retirement: this Plan utilizes the definition of “retiree” and
retirement that appears in the primary retirement plan covering the Participant.
Omnibus Plan: the Motorola Omnibus Incentive Plan of 2003, or any successor
plan.
Operating Earnings: calculated according to GAAP, excluding one-time events
called out in earnings releases, such as restructuring activities and sales of
marketable securities. It also excludes stock compensation expense.
Operating Cash Flow: calculated according to GAAP, which excludes gains on sales
of investments and securities.
Participant: an Employee who meets the eligibility requirements set forth above.
Plan: the 2006 Motorola Incentive Plan.
Plan Year: calendar-year performance periods commencing each 1 January.
Revenue Growth: calculated as the year-over-year percentage increase in net
sales after discounts according to GAAP, adjusted for the impact of mergers,
acquisitions, and divestitures in excess of $50 million.

 

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Quality: combination of measures of customer satisfaction, reliability, and cost
of poor quality, as defined by the MIP Committee.
Section 16: Section 16 of the Securities Exchange Act of 1934, as amended.
Section 162(m): Section 162(m) of the Internal Revenue Code, as amended.
If a term is used but not defined in the Plan, it has the meaning given such
term in the most recent Omnibus Plan.
Applicable Law
To the extent not preempted by federal law, or otherwise provided by local law,
the Plan will be construed in accordance with, and governed by, the laws of the
state of Illinois without regard to any state’s conflicts of laws principles.
Any legal action related to this Plan shall be brought only in a federal or
state court located in Illinois.