Exhibit 10.1


 


MOTOROLA
OMNIBUS INCENTIVE PLAN OF 2006


 


(as
amended through November 10, 2009)


 


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 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 


 


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Omnibus Incentive Plan of
2002, the Motorola Omnibus Incentive Plan of 2000, and the 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 but excluding any Stock Options,
Restricted Stock Units, or Deferred Stock Units a non-employee director elects
to receive at Fair Market Value in lieu of all or a portion of such
non-employee director’s Compensation. 
Compensation for this purpose includes all cash remuneration payable to
a non-employee director, other than reimbursement for expenses, and shall
include retainer fees for service on the Motorola Board of Directors; fees for
serving as Chairman of the Board or for serving as Chairman or member of any
committee of the Board; compensation for work performed in connection with
service on a committee of the Board or at the request of the Board, any
committee of the Board or a Chief Executive Officer or any other kind or other category
of fees or payments which may be put into effect in the future.


 


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 


 


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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 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 offer is implemented within twelve months of the date of such
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 


 


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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.


 


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 


 


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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 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 


 


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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.


 


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 


 


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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 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 


 


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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 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


 


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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.


 


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, 


 


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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.


 


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.


 


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(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 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 


 


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Options may be transferable
to members of the immediate family of the participant and to one or 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 


 


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Plan amendment to the extent
necessary to comply with applicable laws, regulations, or stock exchange rules.


 


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 as a
result of the exercise or settlement of an award under the Plan credited to a
deferred 


 


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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.


 


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 


 


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thereunder shall be null and void if stockholder
approval is not obtained at the next annual meeting of stockholders.


 


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