EX-10.5






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


 









 






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



 









 







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.



 









 





          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



 









 







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.



 









 





     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



 









 







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.




 









 








     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



 









 







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



 









 







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.



 









 






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.




 









 





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




 









 




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



 









 







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.



 









 





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