exv10w26



 





Exhibit 10.26




2006 Motorola Incentive Plan




(As Amended Through July 5, 2007)




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;
	 
	 	•	 	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:





	 
	 	 	 	 	 	Eligible	 	 	 	 	 	Target Award	 	 	 	 	 	Business	 	 	 	 	 	Individual
	Award	 	=	 	 	Earnings	 	 	*	 	 	Percentage	 	 	*	 	 	Performance Factor	 	 	*	 	 	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.





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 Percentage 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) 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 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 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 Percentage 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.



 









 





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
	 
	 	•	 	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.



Gross Margin: net sales minus the cost of goods sold, calculated according to GAAP.



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.



Omnibus Plan: the Motorola Omnibus Incentive Plan of 2006, 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. It will be adjusted for the impact of mergers, acquisitions, and
divestitures material to the business segment.



Operating Cash Flow: calculated according to GAAP, which excludes gains on sales of investments
and securities, and the following acquisition-related costs: intangible amortization and in-process
research and development. It will be adjusted for the impact of mergers, acquisitions, and
divestitures material to the business segment.



Participant: an Employee who meets the eligibility requirements set forth above.



Plan: the 2006 Motorola Incentive Plan, as amended from time to time.



Plan Year: calendar-year performance periods commencing each 1 January.



Quality: combination of measures of customer advocacy, reliability, flawless launch, and/or cost
of poor quality, as defined by the MIP Committee. The MIP Committee may add or delete quality
measures to reflect changing business requirements.



Retired or Retirement: this Plan utilizes the definition of “retiree” and retirement that appears
in the primary retirement plan covering the Participant.




 









 







Revenue Growth: calculated as the year-over-year percentage increase in net sales after discounts
according to GAAP. It will be adjusted for the impact of mergers, acquisitions, and divestitures
material to the business segment.



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 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.