Case: 1:03-cv-05044 Document #: 333-3 Filed: 02/15/08 Page 1 of 52 PageID #:3346
MOTOROLA PROFIT SHARNG AND INVESTMENT PLAN

AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 1,1999

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MOT-ERISA 3936

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MOTOROLA PROFIT SHARNG AND INVESTMENT PLAN

Table of Contents

Page

ARTICLE 1 - DEFIITI ONS ....................................................................................................... ..................... 3

1.1 "Affdiated Employer" ................ .......... ..... ......... ..... ....... ........... ...... ......... ......... ... .......... ................. ..... 3

1.i "Beneficiary" .... ...... .............. ....... ........ ........... ..m...... ......... ......... ..... ..................... ........ ........ ........... 3

1.3 "Board of Directors" ...................................... ..................................................... ........... .......... ............... 3

1.4 "Break in Servce" .. .... ........ ... ..... ....... ...... ................ ........ .... .... ...... ................ ......... ...... .......... ....... ......... 3

1.5 "Code" ...... .... ............ .... ...... ........................... ....... ........... ..... ..... ...................... ........... ............. ............ 3

1.6 "Company" ....... ....... ..... .................................... ...... ............. ............ .............. ................. .................... .... 3

1.7 "Compa ny Contribution ....... ....... ........ .................. ............ .............. ...... ........ ....... ............. ....... ............... 3

1.8 "Company Contribution Account" ....................................................................................................... 3

1.9 "Company Securi ties" .. ..... ........................ ............ .............. ................. ........ ............ .......... ............ ....... 4

1.1 0 "Compensation" ................................ ................. ........................ ......... ............... ....... ........... ....... ... ....... 4

1.1 1 "Corporation" .... ...... .......... ........... ........... ..... .............. ................. ................ .................. ....................... 4

1.12 "Early Retirement Da te" ......... ..... ...... .............. .................................................................... .................. 4

1.13 "Elective Deferrals" or "Elective Contributions" .................................................................................. 4

1.14 "Employee".................... .,........................m....... ..... ............................... ............. ......... ......... ....... ...... ..... 4

1.15 "Foreign Subsidiary" ..... ..................., ..... .................. .... ................... ..................... .............,..................... 5

1.16 "Forfeiture" ................ .......... ...... .......................... ..................... .....................,..................... ..................... 6 .

1.17 UFu nd".......... ............................. .......... ... .................. ..........~...... .......................... ................. ......... ...... ....... 6

1.18 "Highly Compensated Employee" ......................................................................m................................... 6

1.19 "Hour of Service"............... .... ............... ..............., ........ ... ... ....................... .............................. ...............;. 6

1 .20 "Income" .......... '" ...... .......................... .......... ...................... ...... h...h............... ....... ......................... ..... 7

1.2 1 "Investment Funds".............. ................... ....... .... .................... ............................. ............ ............. ............ 7

1.22 "Matching Contribution" ..m.. .... ................... ..h.............. ........ "h.. .... ...... ...... ........... ...........................,.. 7

1.23 "Motorola Stock Fund" ............................................. ....... ..................................................... .... ................ 7

1.24 "N on-Ilighly Compensated Employee" .......h... ... ...h......h...........h............. .... ........... ........... .................. 7

1.25 "Normal Retirement Date" ... ........................ ............ .....h........................... ............................. .........,. 7

1.26 "One Year Break in Service" ...........m....................h...................................h...............hh.................. 7

1.27 "P articipan t" ...................................... ............ h.......,......,...,............................... .................................. ....... 8

1.28 "Participant Contribution" .... ............. .............. .................. .... ................ .... ........... .................................. 8

1.29 "Participant Contribution Account" .....................h..................................h..........................................8

1.30 "Period of Service" .... ................. ................. ..... ............................ ..... ....... ........h................... ..... ............ 8

1.3 1 "Period of Severance" .. ................. ...h.............................. ......h .h.............. ........ h ................................. 8

1.3 2 "Plan" ....................h................... h................. h.... h............................................ h........................... ..... ...... 9

1.33 "Plan Year" ....... ........ .......... .... ...... .........................., ..... ....... ........... ... ................ ............,........... .h.h.......... 9

1.34 "Profit Sharing Committee" ... ..................... ... ........ ........ .......h.....................h. .......................... ....hh........ 9

1.35 "Profit Sharing Contribution" ..... ...... .........h................ .......... ......................... ................. ..................... 9

1.36 "Q ualified An nui ty"........ ....... h..........................................,............................................. .... .............. ....... 9

1.37 "Severance from Service Date" ...............................................................h..................h...h.............. i i

1.38 "Subsidiary" ........... .................. ............................ ................ .............. ..... .... .......... ...................... .......... 1 i

1.39 "Total and Permanent Disability" ...........................h...............h............h.................................. 11

1.40 "Trust" .......................... ......... .... ......h.............. ..... ........... .......... ....... ..... ..... ................................ .............. 11

1.41 "Trust Fund" or "Fund" ..............................................h........................................................................ 12

1 .42 "Valuation Date"............. ..... ..... ....,. ...... .........h ...h................ ...... .................... ..................................... 12

1 .43 "Year of Servce" "'.m' ............ ............... ......... ................ .............. ..h.............. ....h.h......... ...... m......... 12

ARTICLE 2 - ELIGIBILITY AND PARTICIPATION .......h.................................................................... 13

2.1 Employees Covered by the Plan ...............h...................................................................h................ 13

2.2 Re- Empl oymen t ...,.........................................................,... ................................... ....... .............. ............ i 3

2.3 Years of Service of Employees of Foreign Subsidiaries.................................................................. 13

MOT-ERISA 3937

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ARTICLE 3 - CONTRIBUTIONS TO TH FU ........................................................................................ 15

3.1 Participa nt Contributions ............................................ ....... ................................................................... 15

3.2 Company Contributions... .................... ............. ..... ............... ............ .................. ....... ............. ..... ....... 1 8

3.3 Special Rules Applicable to Sections 3.1 aml-3.2 ..............................................................................22

3.4 Actual Deferral Percentage Tests .........................................................................................................25

3.5 Average Contribution Percentage Tests ............................................................................................. 28

3.6 Additional Testing Rules ....... ................... .................... ....... ........... ...... ........ ............ ............. ........... 3 I

ARTICLE 4 - ALLOCATIONS TO PARTICIPANS' ACCOUNS ............................................................34

4.1 Participant Accounts ....................... .......... ................................ .............. ................... ...... ..... ........ ..... 34

4.2 Accoun t Adjustments........ .......... ............ ................. ..................... ....................... .......... .............. .......... 34

4.3 Maximum Allocations and Top Heavy Provisions ........................................................................... 36

4.4 Val ua tion of Fund ... ............. ................. .............. ............ ..... .......... ........ ............. ................... .......... 40

4.5 Investment of Funds .... ............... ....... .... ...... .... ........... ........ ... ..... ..... ................. ..... ..... ........... ,... ............. 40

4.6 Transferred Benefits ......... ............. ............ ............ ........ ........ ............ .................................. ....... 40

ARTICLE 5 - VESTIG AN DISTRBUTION OF BENEFITS ..............................................................42

5.1 Vesting 0 f Benefi ts ......... ..... ........... ............. ................. ..... .................................. .............. .............. ...... 42

5.2 Designation of Beneficia ries. .... .... ........... ........... ...... ........... ........ ...... ...... ....... ...... ............... ............ ...... 43

5.3 Commencemen t of Distributions.. .......... ....... ............ ............. ......... .............. ............. ..... ....... ...... ...... 45

5.4 Method of Payment of Distribution ............................................ ........................................... ............. 47

5.5 Loans ................................................... .............. .............................. ....... ...... .......... ........ ........... ...... ..... 49

5.6 F acili ty 0 f Pa ymcn t ..... .....,.... .......... ...... .......... ......... ...................... ...... ......... ....... .............. .... '~m ..... ...... 51

5. 7 Notice of Address .................................................................... ............................................................ 51

5.8 Hardship Withd rawals ........................ ............ .... ..... ................. ............ ................................... ..... ......... 52

5.9 Withdrawal at Age 59Y:...................................... ...................... ................................. ................... ......... 53

ARTICLE 6 - QUALIFID MILITARY SERVICE ..................................................................................... 54

6.1 Special Definitions for Article 6 ............................................................................................................. 54

6.2 Mili tary Leave of Absence. .......... ................................ ............... ........... ............ ......... ........... ....... ........ 54

6.3 Distribution of Benefits During Military Leave of Absence ............................................................55

6.4 Continuance of Participant's Interest in Fund During Miltary Leave of Absence............................ 55

6.5 Effect of Termination of Military Leave of Absence ..................................................................... 55

6.6 Employees Entitled to the Benefits of USERR ................................................................................ 56

6.7 Applica ble Laws............... .............. .... ................................................... ..... ............. ..... ................. ......... 57

ARTICLE 7 - PLAN ADMINISTRTION ...................................................................................................... 58

7.1 Membership of the Profi Sharing Committee .................................................................................58

7.2 Powers of the Profit Sharing Committee ......................................................................................... 58

7.3 Procedures of the Profi Sharing Committee ...................................................................................... 60

7.4 Adoption of Rules by Profit Sharing Committee ........................................................................... 60

7.5 Directions to Trustee............ ...................... ........ ........... ................................................................ ......... 60

7.6 Records to be Kept by the Profit Sharing Committee ................:....................................................... 60

7.7 Inspection of Records of the Profit Sharing Committee................................................................... 61

7.8 Ind emnifica tion ................................................... ............. ...... .... ....... .............. ...................................... 61

7.9 Claims Proced ure ....... ..................................... ....................................................... ............................. 6 I

7.10 Participants Subject to Section 16(b) of Securites Exchange Act.................................................... 61

7.11 Assignment of Duties under ERISA Section 404(c) .....................................m......................m........ 61

ARTI CLE 8 - TRUSTEE . ........... ...... ..... ......... ............ .......... ..... ..................... .................... .............. ............... ...... 63

8.1 Trust Agreement .. ........ ................................... .... ............... ...... ................ ..... ..... ........ ..................... ....... 63

8.2 Appointment of Successor Trustee .......................................................................................................63

ARTICLE 9 -INSTMENT OF THE ASSETS OF THE TRUST FUD ................................................. 64

9.1 Direction of Investments.............. ................ ..... ................ ............ .................. ........................... ........... 64

9.2 Investment Guidelines ......... ............ .............. ........ ..... .... ..... ........ ....... ............ ..... ................. ................... 64

9.3 Investment in Company Securities.................................................................................................,...... 64

ARTICLE 10 - CHAGES IN THE ORGANZATION OF THE COMPANy............................................... 65

10.1 Merger or Consolidation ............ ........................................................................................ ................. 65

10.2 Transfer of a Participant to a Subsidiary ........................................................................................ 65

MOT-ERISA 3938

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103 Transfer of a Participant from a Subsidiary to the Company............................................................ 65

10.4 Sale, Disposition or Transfer of a Subsidiary or Business Subdivision .............................................. 66

10.5 Employees Transferred in Acquisition.................................................................................................68

ARTICLE 11 - AMNDMENT AND TERMATIOH OF THE PLAN .........................................................69

11.1 Amendments to Comply with Law ................................................................. ....................................... 69

11.2 Amendment of the Plan ......................................................... ......... .............. ....... ................ ....... ......... 69

113 Termination by Corporation ........ ................. ........ ....... ............ .............. ............. ................ ..... ....... 69

1 1.4 Effect of Termination .......... ..... ............ ........... ....... ........... ....oo. .................... ...................... ............... 69

ARTICLE 12 - RESTRICTION ON ALNATION OF BENEFITS .............................................................. 71

ARTICLE 13 - l\SCELLANEO US ...... ........... ............... ..................... ...... ......... ........... ......... ..... .................. ..... 73

13.1 Participa tion of S ubsidianes .......... .... ............. ....... ...... ............. ..................... ...... .......... ............... ..... 73

13.2 Sole Benefit of Partcipants... .... ......... ........... ........... ..... ....... .... ..... ..... ............... ..................... ....... ...... 73

13.3 N onguarantee of Employment.. ...... .................... ..... ............ ........ ........... ..... ......... .......................... .... 73

13.4 Resolutions of the Board of Directors .............................................................................................. 73

13.5 Written Notice by Trustee ...................................................m............................................................. 73

13.6 Gender and Numbers. ......... ........ ........................ ............... .............. ........ ..... ...... ...... ............ .......... 73

13.7 H eadi ngs . ..... ..... ......... ........................... ................ ......................... ........ ........ .... .............. ............. ... ..... 74

13.8 Litigation .......... ................... ...... ..................... ........ ....... ..................... ...... ........................ ............ 74

MOT-ERISA 3939

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MOTOROLA PROFIT SHARNG AND INVSTMENT PLAN

On November 18, 1947., Motorola, Inc., a DeJaware corporation (hereinafter referred to as the

Corporation), established the Motorola Employees' Savings and Profit Sharng Plan for the

benefit of its employees to provide fuds for employees in the event of death, disability,

unemployment and retirement, and to encourage employees' interests in the successful operation

of the business and provide a share in the resulting profits for the benefit of employees. The

name of the Motorola Employees' Savings and Profit Sharng Plan was changed to the Motorola

Profit Sharng and Investment Plan (herein referred to as the "Plan") effective Januar 1, 1996.

Effective Januar 1, 2000, the name of the Plan is again changed to the Motorola, Inc. 401(k)

Profit Sharng Plan.

Except as otherwise provided below, this document sets forth the Plan, as amended and restated

effective September 1, 1999. Certn provisions of the Plan are effective prior to or afer

September 1, 1999, as set forth-hereinbelow or as provided elsewhere herein:

. '~ -

· Changes to Section 1.10 are effective Januar 1,2000, provided, however, that

deletion ofthe "family aggregation" rule shall be effective Januar 1, 1997;

· Section 1.18 is amended effective Januar 1, 1997;

· Section 3.1 is amended effective July 1,2000;

· Section 3.2 is amended effective Januar 1,2000;

· Section 3.3 is amended effective Januar 1,2001;

· Sections 3.4, 3.5 and 3.6 are deleted effective Januaiy 1, 2001;

· Sections 4.5 and 4.6 are amended effective July 1, 2000;

· Section 5.1 is amended effective July 1,2000;

· Section 7.1 is amended effective September 1, 1999;

· Section 9.3 is deleted effective July 1,2000; and

· Aricle 11 is amended effective September 1, 1999.

The Motorola Profit Sharng and Investment Trust (hereinafer referred to as the "Trust"),

established pursuant to a separate trust agreement, is intended to form a par of the Plan.

Effective Januar 1, 2000, the Trust shall be known 25 the Motorola, Inc. 401(k) Profit Sharng

Trust.

The Plan and the Trust are intended to meet the requirements of Sections 401(a), 401(k) and

501(a) of the Internal Revenue Code, as now in effect or hereafter amended, and the Employee

MOT-ERISA 3940

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Retirement Income Securty Act of 1974 ("'ERISA"), as now in effect or hereafter amended,

" including, but not limited to, Section 404( c) and the regulations thereunder.

2 MOT-ERISA 3941

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ARTICLE 1- DEFINITIONS

a controlled group of corporations (as defined in Code Section 414(b)) wruch includes the

1.1 "Affiiated Employer" means the Corporation and any corporation which is a member of . .

Corporation; any trade or business (whether or not incorporated) wruch is under common control

(as defined in Code Section 414(c)) with the Corporation; any organization (whether or not

incorporated) which is a member of an affliated service group (as defined in Code Section

414(m)) which includes the Corporation; and any other entity required to be aggregated with the

Corporation pursuant to regulations under Code Section 41 4(0). Notwithstanding the foregoing,

for puroses of Section 4.3(a), the defintion of Affliated Employer is modified as set fort in

Section 415(h) of the Code.

1.2 "Beneficiary" means a person or persons (natural or otherwise) designated by a

Paricipant or former Participant in accordance with Section 5.2 hereof to receive benefits under

the Plan upon the death of such Paricipant or former Paricipant.

1.3 "Board of Directors" means the Board of Directors of the Corporation and shall also

mean any committee of the Board of Directors which has been delegated authority to exercise the

powers and authority of the Board of Directors with respect to the Plan, except that the latter

meanng shall not apply to Section 11.3 hereof.

.....

1.4 "Break in Service" means a Period of Severance of at least twelve (12) consecutive

months.

1.5 "Code" means the Internal Revenue Code of 1986 and amendments thereto.

1.6 "Company" means the Corporation and any domestic corporation that is or becomes a

Subsidiar of the Corporation and is authorized by the Board of Directors of such Subsidiary to

paricipate in the Plan, in accordance with Section 13.1 of the Plan.

1. 7 "Company Contribution" means the contribution of the Company to the Trust Fund in

accordance with the provisions of Section 3.2 of the Plan. The Company Contribution consists of

Matching Contribution and Profit Sharng Contribution.

1.8 "Company Contribution Account" means the account maintained for a Paricipant to

record his share of the Company Contribution and adjustments relating thereto.

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MOT-ERISA 3942

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1.9 "Company Securities" means the common or preferred stock, bonds, notes, debentures,

warts or rights to subscribe to or purchase any of 

or other obligations or indebtedness issued by the Corporation or any of its Subsidiares, or . .

the foregoing.

1.10 "Compensation" meas direct compensation received from the Company during the

Plan Year, including individual sales incentive payments, payments from the Field Sales and

Engineering Incentive PLan commissions, shift differentials, overtme and salar deferrs under

Sections 125, 129 and 401(k) of the Code; but excluding the amount of any benefits paid under

the Plan, any benefits paid under the Motorola, Inc. Pension Plan, all moving allowances, all

educational allowances, non-cash payments, all overseas allowances, awards, bonuses, cost-ofliving or geographical adjustments, severace and other termination payments, and, for Plan

Year prior to Januar 1, 2000, Motorola Executive Incentive Plan payments, RONA Incentive

Plan payments, Stakeholder Plan payments and other incentive payments. Effective for Plan

Year commencing on. or after Januar 1, 2000, Motorola Executive Incentive Plan payments,

similar incentive plan pay (but not awards or individual bonuses) and lump sum merit pay shall ,

be included in Compensation. The anual compensation of each Paricipant taken into account

under the Plan for any purpose shall not exceed $160,000, as such amount may be adjusted for

-- cost-of-living adjustments under Section 401(a)(17)(B) of the Code. Notwithstading the

foregoing, Sections 1.18, 3.3 and 4.3 provide alternate definitions of compensation for puroses

of such respective provisions.

1.11 "Corporation" me~s Motorola, Inc., a Delaware corporation.

1.12 "Early Retirement Date" means the later to occur of (a) the date a Paricipant attains

age fifty-five (55), or (b) the date a Paricipant completes five (5) Year of Service.

1.13 "Elective Deferrals" or "Elective Contributions" means contrbutions made to the Plan

durng the Plan Year by the Company at the election of the Paricipant in lieu of Compensation,

but shall not include the one percent (1 %) mandatory Paricipant Contrbution required of each

Paricipant prior to July 1, 2000, under Section 3.1 hereof

1.14 "Employee" means any individual in an employee-employer relationship with the

Company, but excluding (a) any independent contractor; (b) any consultant; (c) any individual

pedorming services for the Company who has entered into an independent contrctor or

consultant agreement with the Company; (d) any individual pedorming services for the

4

MOT-ERISA 3943

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Company under an independent contrctor or consultant agreement, a purchase order, a supplier

, or staffng agreement or any other agreement that the Company enters into for services; (e) any

"leaed employee" as defied in Section 414(n) of the Code; and (f) any individual whose terms

and conditions of emploÝment are governed by. a collective bargaining agreement resulting from

good faith collective bargaining where benefits of the tye being offered under the Plan were the

subject of such bargainng, unless such agreement specifies tht such individuas are eligible for

the Plan. In addition, a United States citizen employed by a Foreign Subsidiar, who

immediately prior to entering the employment of the Foreign Subsidiar was employed by the

Company, shall be deemed to be, for puioses of the Plan, an Employee of the Company,

providing the following conditions are met:

(i) The Company owns directly at least twenty percent (20%) of:

(1) the voting stock of such Foreign Subsidiar employing such

United States citizen; or

(2) the voting stock of a Foreign Subsidiar which, in tu, owns

directly at least 50% of the voting stock of the Foreign Subsidiar

which employs such United States citizen; ...~

(ii) The Company has entered into an agreement with the United States

Treasur Deparent to cover for Social Securty puroses all United

States citizens employed by such Foreign Subsidiar; and

(iii) The United States citizen employed by such Foreign Subsidiar is not a

paricipant in any other pension, profit sharng, stock bonus or other plan of

deferred compensation (except the Motorola Pension Plan or Motorola Executive

Incentive Plan), whether or not qualified for tax exemption under the Code, to

which contrbutions are made on his behalfby any person other than the Company

or the Employee with respect to the compensation he receives from such Foreign

Subsidiar.

1.15 "Foreign Subsidiary" nieans a Subsidiar that is organized under the laws of a countr

other than the United States, or a Subsidiar more than fifty percent (50%) of the sales of which

ar derived from countries other than the United States or more than fift percent (50%) of the

fixed assets of which are located in a country or countres other than the United States.

5

MOT-ERISA 3944

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.;

;

1.16 "Forfeiture" means the porton of the Company Contrbution Account which is not

payable to a Paricipant under the provisions of Section 5.4 of the Pian because of the

termination of employment of such Paricipant prior to July 1,2000 by resignation or discharge

prior to completing a Périod of Service of five (5) year.

1.17 "Fund" means the Trut Fund.

.-.

1.lS "Highly Compensated Employee" means an employee who performs service for an

Afliated Employer durng the determination year and (a) was, at any time durng the Plan Year

for which the determnation is being made or the preceding Plan Year (the "look-back year"), a

five percent (5%) owner of an Affliated Employer, determined as described in Section 416(i) of

the Code, or (b) had compensation (as defined in Section 41S(c)(3) of the Code and modified, for

the Plan Yea beginning Januar 1, 1997, as provided in Section 414(q)(4)(B) of the Code) from

an Afliated Employer in excess of$80,OOO, as adjusted pursuant to Section 415(d) of the Code.

Notwithstanding the foregoing, the Corporation may elect to limit the application of clause (b) of

the preceding sentence to employees in the top-paid group durng the look-back year. For ths .

purose, the term "top-paid group" means the top twenty percent (20%) of active employees as

raned on the basis of compensation received from the Affiliated Employers durng the year,

determined as described in Section 414(q) of the Code. The term Highly Compensated

Employee shall also include any former employee of an Affliated Employer who was a Highly

Compensated Employee at the time of his separtion from service or at any time after attaining

age fift-five (55).

1.19 "Honr of Service" for vesting purposes means each hour for which an Employee is

directly or indirectly paid, or entitled to payment by the Company for the performance of duties

for the Company, each hour for which an Employee is paid or is entitled to payment by the

Company for vacation, holiday, ilness, incapacity (including disability), layoff, jur duty or

leave of absence, not including a Milita Leave of Absence (as defined in Aricle 6 hereof), and

each hour for which back pay, irrespective of mitigation of damages, is awarded or agreed to by

the Company. The term "Hour of Service" for determining eligibility to paricipate in the Plan

shall have the definition given to such term in Deparment of Labor Regulation Section

2530.200b-2. As used in this Section 1.19, the term "Company" includes all Affliated

Employers. Notwithstanding the foregoing, (a) a Participant who is on the weekly payroll shall

be credited with fort-five (45) Hours of Service for each week in which he is required to be

credited with at least one (l) Hour of Service, (b) a Paricipant who is on the biweekly payroll

shall be credited with ninety (90) Hours of Service for each biweekly period in which he is

6

MOT-ERISA 3945

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required to be credited with at least one (1) Hour of Service, and (c) a Paricipant who is on the

- '\ semimonthly payroll shall be credited with ninety-five (95) Hour of Service for each

j

semimonthly period in which he is required to be credited with at least one (1) Hour of Service.

1.20 "Income" means, as of any Valuation Date, the net gain or loss of the Trust Fund from

investments as reflected by interest payments, dividends, realized and unalized gains and losses

on securties, other investments, trsactions and expenses paid from the Trust Fund. In

determning the Income of the Trust Fund for any period, assets shall be valued on the basis of

their fair market value.

1.21 "Investment Funds" means the investment fuds maintained by the Trustee for puroses

of investing Trust Fund assets.

1.22 "Matching Contribution" means the contrbution of the Company to the Trust Fund

made in accordance with the provisions of Section 3.2(a) of the Plan.

1.23 "Motorola Stock Fund" means an Investment Fund the purose of which is to invest in

Motorola, Inc. common stock.

-,

;

1.24 "Non-Highly Compensated Employee" means any employee of an Affiiated Employer

who is not a Highly Compensated Employee.

1.25 "Normal Retirement Date" means the date a Participant attains age sixty-five (65)

(Normal Retirement Age) regardless of his Years of Service.

1.26 "One Year Break in Service" means a Period of Severance of at least twelve (12)

consecutive months. In the cae of an Employee who is absent from work for maternity or

paternity reasons, the twelve (12) consecutive month period beginning on the first anversar of

the first date of such absence shall not constitute a Break in Service. For puroses ofthIs Section

1.26, an absence from work for maternity or paternity reasons means an absence ( a) by reason of

the pregnancy of the Employee, (b) by reason of a birth of a child of the Employee, (c) by reason

of the placement of a child with the Employee in connection with the adoption of such child by

such Employee, or (d) for puroses of carng for such child for a period beginning immediately

following such birth or placement.

7

MOT-ERISA 3946

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1.27 "Participant" mean an Employee who is paricipating in the Plan in accordance with

Aricle 2 hereof For puroses of determining the time of commencement or method of payment

of a distrbution under Section 5.3 or 5.4, respectively, the term "Paricipant" may include a

former Paricipant who has a vested interest in a benefit under the Plan, unless the context

. .

requires otherse.

1.28 "Participant Contribution" mea a contrbution that is made on behalf of a Parcipant

or Employee to the Fund puruant to a Compensation reduction agreement in accordance with

Section 3.1 of the Plan.

1.29 "Participant Contribution Account" means the account maintained for a Paricipant to

record his Paricipant Contrbutions and any adjustments relating thereto.

1.30 "Period of Service" means a period of time that begins on the Employee's employment

commencement date or. reemployment commencement date, whichever is applicable, and ends on

the Severance from Service Date. Employment commencement date means the date on which .

the Employee first performs an Hour of Service. Reemployment commencement date means the

first date following a Period of Severace on which the Employee performs an Hour of Service.

For puroses of vesting under the Plan, an Employee shall receive credit for the aggregate of all

Periods of Service with an Afliated Employer. In determining a Paricipant's Period of Servce

for vesting puroses, the Plan shall tae into account the following Periods of Severance:

(a) If an Employee severs from service by reason of quitting, discharge or retirement

and the Employee then performs an Hour of Service within twelve (12) months of

the Severance from Service Date, the Plan shall take into account the Period of

Severace; and

(b) If an Employee severs from service by reason of quitting, discharge or retirement

during an absence from service of twelve (12) months or less for any reason other

than quitting, discharge, retirement or death, and then performs an Hour of

Service within twelve (12) months of the date on which the Employee was first

absent from service, the Plan shall take into account the Period of Severace.

1.31 "Period of Severance" means the period of time commencing on the Severance from

Servce Date and ending on the date on which the Employee is reemployed by the Company or

an Afliated Employer and again performs an Hour of Service.

8

MOT-ERISA 3947

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1.32 "Plan" means the profit sharng and investent plan as set fort in this document and

known as the "Motorola Profit Sharng and Investment Plan" (or, on or after Januar 1,2000, the

"Motorola, Inc. 401(k) Profit Sharng Plan") as the same may, from time to time, be amended.

. .

1.33 "Plan Year" means the calendar year.

1.34 "Profit Sharing Committee" means the persons appointed under the provisions of

Aricle 7 hereof to administer the Plan.

1.35 "Profit Sharing Contribution" means the contrbution of the Company to the Trut

Fund made in accordance with the provisions of Section 3.2(b) ofthe Plan.

~\

i

1.36 "Qualifed Annuity" means a single premium, nontrsferable anuity contrct issued

by an annuity company. unrelated to the Company. The premium for such anuity contract shall

equal the balance in the Paricipant's accounts at the time such contract is purchased. The,

normal form of distrbution to a Paricipant who has elected to receive a Qualified Anuity under

Section 5.4 and who is mared on the Anuity Staring Date (as defined below) shall bea

Qualified Joint and Surivor Anuity (as defined below). The normal form of distribution to such

a Paricipant who is not mared on the Anuity Staing Date shall be a single life anuity for the

life of the Paricipant. If the Anuity Staring Date is after the Paricipant's death, the normal

form of distrbution shall be a single-life anuity for the life ofthe Beneficiar.

A "Qualified Joint and Survivor Anuity" means a reduced anuity for the life of the Paricipant

with a survivor anuity for the life of the surviving spouse which is 50%, 75% or 100%, as

selected by the Paricipant, of the amount of the annuity payable during the joint lives of the

Parcipant and his spouse. If the Paricipant does not specify a larger percentage, the applicable

percentage wil be 50%. The Qualified Joint and Survivor Anuity shall be the actuaral

equivalent of the single life anuity benefit provided under the anuity contract. The tenn

"spouse" or "surviving spouse," as used herein, has the meaning set forth in Section 5.2. The

term "Anuity Staring Date" means the first day of the first period for which an amount is paid

as an anuity or any other form.

In lieu of the normal form of benefit described above, a Paricipant who has elected to receive a

Qualified Anuity may elect within the time provided in the last paragraph of this Section 1.36

any of the following annuity forms in a wrting acceptable to the Profit Sharng Committee (or,

9

MOT-ERISA 3948

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;"~l

\

J

after purchase ofthe Qualified Anuity, the anuity provider): (a) single life anuity for the life

of the Paricipant, (b) Qualified Joint and Surivor Anuity, (c) joint and 50%, 75% or 100%

Parcipant is mared on the Anuity Staring Date, an election of an anuity form other than a

surivor anuity, or (d) life-ten year certn anuity. Notwithstanding the foregoing, if a . .

Qualified Joint and Survor Anuity hereunder shall not be valid uness (i) it is in wrting, (ii)

the Paricipant's spouse consents in wrting to such election, (iii) such election indicates that the

Paricipant alone is to receive the benefit or designates a specific joint anuitant or Beneficiar or

Beneficiares and the fonn of benefit payment, and (iv) the spouse's consent acknowledges the

effect of such election and is witnessed by a Plan representative or notar public. Consent, if

given, shall be irrevocable. Spousal consent shall not be required if the Paricipant establishes to

the satisfaction of the Profit Sharg Committee (or, after purchase of the Qualified Anuity, the

anuity provider) that such wrtten consent canot be obtained because there is no spuse or the

spouse canot be located. Any consent necessar under this provision wil be effective only with

respect to the spouse who sign the consent.

The Paricipant's designation of a specific joint anuitant or Beneficiar or Beneficiares under.

the preceding paragrph may not be changed without spousal consent, unless the change

reinstates the Qualified Joint and Surivor Anuity or the consent of the spouse expressly pennits

designations by the Paricipant without any requirement of furter consent by the spouse. Such

consent must acknowledge that the spouse has the nght to limit consent to a specific Beneficiar

and a specific form of benefit, where applicable, and that the spouse voluntaly elects to

relinquish either or both of such rights. The Paricipant may revoke a prior waiver of a Qualified

Joint and Survvor Anuity without the consent of the spouse at any time before the Anuity

Staring Date. The number of revocations shall not be limited.

The Profit Sharng Committee (or, after purchase of the Qualified Anuity, the anuity provider)

shall provide each Paricipant who has elected to receive a Qualified Anuity no less than thirt

(30) days and no more than ninety (90) days pnor to the Anuity Staring Date. a wrtten

explanation of: (1) the tenns and conditions of a Qualified Joint and Survivor Anuity; (2) the

Paricipant's right to make and the effect of an election to waive the Qualified Joint and Surivor

Anuity form of benefit; (3) the rights of a Paricipant's spouse; and (4) the nght to make, and

the effect of, a revocation of a previous election to waive the Qualified Joint and Surivor

Anuity.

The Paricipant's waiver of the Qualified Joint and Survivor Anuity, with spousal consent, if

applicable, must be submitted to the Profit Sharng Committee (or, after purchase of the

10

MOT -ERISA 3949

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:¡

.,

i

Qualified Anuity, the anuity provider) at least tl (30) days after the above notice is

provided pursuant to the Paricipant and withn the ninety (90) day period endig on the Anuity

Staring Date. The Paricipant may make such an election, with spousal consent, if applicable,

less than thirt (30) dayš after receivig such wÌtten explanation, if (A) the explanation provided

to the Paricipant makes it clear that the Parcipant has at least tl (30) days to consider such

election, (B) the Paricipant may revoke such election prior to the later of the Anuity Staring

Date or the expiration of the seven day period beginnng on the day afer such wrtten

explanation is provided, (C) the Anuity Stag Date is after the date such wrtten explanation

is provided to the Paricipant (but may precede the date the election is made), except as otherwise

provided above, and (D) distrbution does not commence before the expiration of the seven day

period beginning on the day after such wrtten explanation is provided.

1.37 "Severance from Service Date" means the earlier of (a) the date on which the Employee

quits, retires, is discharged or dies or (b) the first anversar of the fit date of a period in which

an Employee remains absent from service (with or without pay) for any reason other than quit,

retirement, discharge or death, such as vacation, holiday, siclmess, disability, leave of absence or _

layoff; provided, however, that "second aniversar" shall be substituted for "first aniversar"

if the absence is due to maternty or paternity reasons as defined in Section i .26 hereof, and in

such case, the period between the first anversar and the second anversar shall not be a

Period of Service or a Period of Severance.

1.38 "Subsidiary" means any corporation in one or more chains of corporations at least eighty

percent (80%) of the total outstanding voting stock of which (other than directors' quali(yng

shares) is at the time, directly or indirectly, owned by the Corporation or by one or more of the

other corporations or by the Corporation and one or more of the other corporations.

1.39 "Total and Permanent Disabilty" means entitlement to disability benefits under Title

II of the Social Security Act or to long term disability benefits under the Motorola Disability

Income Plan, as amended from time to time.

1.40 "Trust" means the trust established for the receiving, holding, investing and disposing of

the Trust Fund and for implementing and caring out the provisions of the Plan, which Trust is

lmown as the "Motorola Profit Sharng and Investment Trust." Effective Januar I, 2000, the

Trust shaH be known as the Motorola, Inc. 401(k) Profit Sharng Trust.

11

MOT-ERISA 3950

Case: 1:03-cv-05044 Document #: 333-3 Filed: 02/15/08 Page 16 of 52 PageID #:3361
1.41 "Trnst Fund" or "Fund" means the assets held by the trstee of the Trust pursuant to

\ the terms of the trst agreement, as from time to time amended, which constitutes a par of the

J

Plan.

1.42 "Valuation Date" means the date or dates established by the Profit Sharng Committee

for valuing the assets of the Trust Fund. Effective July 1, 2000, a Valuation Date shall mean

each business day that the New York Stock Exchange is open, or such less frequent dates as the

Profit Sharng Committee shall determine.

1.43 "Year of Service" for vesting puroses means a Period of Service of twelve (12)

months. The term "Year of Service" for the purose of determining eligibility to parcipate in

the Plan means a twelve (12) consecutive month period (computation period) durg which

period the Employee has completed at least one thousand (1,000) Hour of Service as defined in

Deparment of Labor Regulation Section 2530.200b-2. The initial computation period of an

Employee shall begin on the date he first pedorms an Hour of Service for the Company, and

additional computation periods, if required for the Employee to become eligible to paricipate in .

the Plan, shall begin on each succeeding aniversar of the date the Employee first pedorms an

Hour of Service. If an Employee incur a One Year Break in Service and is later reemployed by

the Company, the computation period shall begin with the date such Employee is reemployed by

the Company and again pedorms an Hour of Service, and additional computation periods, if

required for the Employee to become eligible to paricipate in the Plan, shall begin on each

succeeding aniversar of the date the Employee was reemployed by the Company and performs

an Hour of Service. As used in this Section 1.43, the term Company includes all Affliated

Employers.

12 MOT-ERISA 3951

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ARTICLE 2 - ELIGIBILITY AND PARTICIPATION

2.1 Employees Covered by the Plan. Subject to the terms and conditions of the Plan, each

Employee of the CompaIy shall be eligible to become a Paricipant in the Plan for all purposes

as of the fit day of the month coincident with or next following the date on which he ha

completed one (1) Year of Service ifhe meets both of the following requirements:

(a) the Employee is not classified by the Company as contract labor (such as black

badges, brown badges, contrctors, contract employees, job shoppers) regardless

of lengt of serice; and

(b) the Employee's base wage or base salar is processed for payment by the Payroll

Deparent(s) of the Company or the Payroll Deparent(s) of any Subsidiar

and not by any other deparent of the Company or any Subsidiar.

i-)

Further, each Employee of the Company who meets the requirements stated above in (a) and (b)

shall be eligible to make Elective Deferls; provided, however, that such Employee shall not

share in the allocation of Company Contrbutions under Section 4.2(a) or (c) prior to the

completion of one Year of Service as described above. The term "Paricipant" shall apply to an

Employee with less than a Yea of Service only to the extent of such paricipation. All Years of

Service with the Company and Affliated Employers shall be counted toward eligibility.

"Leased Employees," as defined in Section 414(n) of the Code, shall not be eligible to paricipate

in the Plan, but they shall be taen into account for purposes of Code Section 414(n)(3) unless

the safe harbor of Code Section 414(n)(5) is satisfied.

2.2 Re-Employment. A former Paricipant wil become a Paricipant for all purposes

immediately upon returing to the employ of the Company. An Employee who has not

completed a Year of Service and whose employment terminates shall be deemed to be a new

Employee as of the date of his re-employment if he has a One Year Break in Service prior to reemployment. Such Employee shall become a Paricipant as of the first day of the month

coincident with or next following completion of a Year of Service.

2.3 Years of Service of Employees of Foreign Subsidiaries. In the case of an employee of

a Foreign Subsidiar who is treated under the Plan as an Employee of the Company, employment

13 MOT-ERJSA 3952

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.--¡

with such Foreign Subsidiar shall be deemed to be, for the purposes of the Plan, employment

with the Company.

14 MOT-ERISA 3953

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l

'-.

ARTICLE 3 - CONTRIBUTIONS TO THE FUND

3.1 Participant Contributions.

(a) Each Paricipant, so long as he is in the employ ofthe Company in a classification

eligible for paricipation under Section 2.1, shall elect an amount to be contributed

by the Company to the Fund on his behalf during each Plan Year, which amount

(Paricipant Contrbution) shall be a whole percentage of from one percent (1%)

to and including seventeen percent (17%) of the Paricipant's Compensation

during such Plan Year, subject to the dollar limitation in Section 3.1(f) hereof.

Effective July 1,2000, a Paricipant may elect to have contrbuted to the Plan as a

Participant Contrbution a whole percentage of Compensation of from zero (0) to

and including twenty percent (20%), subject to the dollar limitation in Section

3.1(f) hereof.

(b) Each Employee shall, upon becoming a Paricipant, enter into a Compensation

reduction agreement with the Company in a form acceptable to the Profit Sharng

Committee, which shall provide that the Paricipant agrees to accept a reduction in

Compensation equal to the amount elected by the Paricipant as his Paricipant

Contribution. In consideration of such agreement, the Company wil make

contributions to the Fund on behalf of the Paricipant in an amount equal to the

amount by which his Compensation is reduced with respect to each pay period

during which such agreement is in effect. Each Employee who first becomes a

Participant prior to July 1, 2000, and who, upon becoming a Paricipant, fails to

make an election as to the amount of his Paricipant Contrbution as aforesaid,

shall be deemed to have elected to make Paricipant Contributions to the Plan in

the amount of three percent (3%) of Compensation, effective as of the first day of

the first payroll period in which he becomes a Paricipant. Such deemed election

shall be considered the Paricipant's Compensation reduction agreement for all

purposes of the Plan until superseded by a subsequent salai reduction agreement

or, after July 1,2000, revoked in accordance with Section 3.1(d).

(c) Each Employee in ï classification eligible for paricipation under Section 2.1 who

has not completed a Year of Service may enter into a Compensation reduction

agreement with the Company in a form acceptable to the Profit Sharg

Committee which shall provide that the Employee agrees to accept a reduction in

Compensation equal to the amount elected by the Employee as his Elective

15

MOT-ERISA 3954

Case: 1:03-cv-05044 Document #: 333-3 Filed: 02/15/08 Page 20 of 52 PageID #:3365
DeferrL. Such Elective Deferals shall not share in the allocation of Company

Contrbutions but shall share in the allocation of the Income of the Fund. In

consideration of such agreement, the Company will make contrbutions to the

Fund on behalf of the Employee in an amount equal to the amount by which his

. .

Compensation is reduced with respect to each pay period durng which such

agreement is in effect An Employee hired on or after July 1,2000 who fails to

make an election as to the amount of his Elective Deferls as aforesaid shall be

deemed to have elected to make Elective Deferrls to the Plan in the amount of

three percent (3%) of Compensation, effective as of the first day of the first

payroll period after completion of the enrollment confirmation process in which

the Employee is employed in a classification eligible for paricipation in the Plan

under Section 2.1. Such deemed election shall be considered the Employee's

":-....,'

Compensation reduction agreeriêf~d shall be treated as such for all puroses of

the Plan until superseded by a subsequent salar reduction agreement or revoked

in accordance with Secton 3.I(d).

(d) Each Paricipant shall have the right to change the amount of his Paricipant

Contrbution, and each Employee shall have the right to change the amount of his

Elective Deferrals, by filing with the Plan an election to that effect in such maner

and in such form as the Profit Sharng Committee shall determine.

Notwithstanding the foregoing, prior to July 1, 2000, a Paricipant shall not have

the right to reduce his Paricipant Contribution below one percent (I %).

-\

(e) Compensation reduction agreements shall be governed by the following:

(i) A Compensation reduction agreement shall apply to each payroll period.

(ii) Prior to July 1, 2000, if a Paricipant has a financial emergency, as

determined by the Profit Sharng Committee, such Paricipants

Compensation reduction agreement may be amended by the Paricipant to

decrease (but not below one percent (I %)) Paricipant Contributions

effective as of the beginning of the payroll period next following the date

the determination of financial emergency is made by the Profit Sharng

Commttee.

16 MOT-ERISA 3955

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i

(iii) The Company shall have the nght to amend its Compensation reduction

agreement with any Paricipant at any time if the Company determines that

Deferrs for any Plan Year wil not exceed the limitations of Section

such amendment is necessar to insure that a Parcipant's Elective . .

402(g) of the Code and Section 3.1(f) hereof, to insure that Anual

Additions for any Plan Year will not exceed the limitations of Section 415

of the Code and Section 4.3(a) hereof, to insure that the discrimination

tests of Sections 401(k) and 401(m) of the Code are met for any Plan Yea

as provided in Sections 3.4 and 3.5 hereof, and to insure that a

Parcipant's Paricipant Contnbutions for any Plan Year wil not exceed

the limits which may be imposed by the Profit Sharng Committee from

time to time in its sole and absolute discretion.

(iv) Except as provided above, a Compensation reduction agreement may not

be amended by a Paricipant or the Company.

(e) All amounts credited to a Paricipant's Paricipant Contnbution Account, and all

Qualified Nonelective Contnbutions and Qualified Matching Contnbutions (both

as defined in Section 3.3) which may be made by the Company shall be one

hundred percent (100%) vested and nonforfeitable at all times.

~,

\

!

(f) No Paricipant may make Elective Deferrls under this Plan and all other plans,

contracts or argements of any Affliated Employers for any taxable year of the

Parcipant which begins in the Plan Year exceeding the limitation imposed by

Section 402(g) of the Code (as adjusted as provided in Sections 415(d) and

402(g)(5) of the Code). If a Paricipant's Elective Deferrals under this Plan and/or

any other plan, contract or arangement of any Affliated Employers, or together

with elective deferrals (as defined in Treasury Regulation Section 1.402(g)-1(b))

under another plan, exceed the limitation imposed by Section 402(g) of the Code

for such Paricipant's taable year, the Paricipant may, not later than March 1

following the close of his taxable year, notify the Profit Sharng Committee in

wnting of such excess and request that his Elective Deferals under this Plan be

reduced by an amount specified by the Paricipant. To the extent a Paricipant has

excess deferrals for a taxable year under this Plan and/or any other plan, contract

or arangement of the Affliated Employers, the Paricipant shall be deemed to

have notified the Profit Sharng Committee of such excess deferrals and requested

17 MOT-ERISA 3956

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,

'.j

(g)

a distrbution thereof. In any such event, the Profit Sharng Committee may cause

such excess amount, plus any income and minus any loss allocable thereto, to be

distrbuted to the Parcipant not later than the first Apnl 15 following the close of

the Paricipant's taxable yea.

. .

Paricipant Contrbutions shall be paid to the Trust as soon as practicable afer

such amounts are witheld from Paricipant Compensation, but in no event later

than the fifteenth (15t1) business day of the month following the month in which

such amounts would otherwise have been paid to the Paricipant in cash.

3.2 Company Contributions. The Company shall make Company Contrbutions to the

Trust Fund as set forth below, subject to any condition precedent specified herein. The Company

Contrbution shall consist of two par, a Matching Contrbution and a Profit Shanng

Contribution.

(a) Matching Contnbution.

.....~

(i) For each Plan Year within the penod beginnng on Januar 1, 1996 and

ending on or before December 31, i 999, the Matching Contrbution shall

be determined as follows: If the net earngs of the Corporation and its

consolidated subsidiares for the fiscal (calendar) year of the Corporation

equal or exceed four percent (4%) of net sales of the Corporation and its

consolidated subsidiares for such fiscal year, all as determined for and

included in the financial statements which have been certified by the

Corporation's independent certified public accountants for release to the

Corporation's stockholders, the Matching Contnbution which shall be paid

to the Trust Fund for each pay penod of the Company durng the Plan

Year immediately following the fiscal year for which net earngs equaled

or exceeded four percent (4%), for each Paricipant who has met the

eligibility requirements to share in the allocation of Company

Contributions under Section 2.1, shall be one dollar ($1.00) for each one

dollar ($1.00) of such Paricipant's Parcipant Contrbution for such Plan

Year with respect to one percent (I %) of Compensation and fift cents

($.50) for each one dollar ($1.00) of such Paricipant's Paricipant

Contnbution for such Plan Year exceeding one percent (1 %) but not

exceeding three percent (3%) of Compensation. If, during any Plan Year,

18 MOT-ERISA 3957

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-"

a Parcipant makes Paricipant Contrbutions to the Plan in an amount

equal to or greater than thee percent (3%) of such Paricipant's

Compensation for such Plan Year, and if the total of the Matching

C~ntrbutions made on behalf of such Paricipant durng such Plan Year

does not equal the maximum amount of Matching Contrbutions required

by ths Section 3.2(a)(i) to be made with respect to thee percent (3%) of

such Paricipant's Compensation, the Company shall, with thirt (30)

days afer the end of such Plan Year, make a lump sum contrbution to the

account of such Parcipant in an amount equal to the difference between

the amount of the Matching Contrbutions that was required to be made

and the amount actually made. To receive such a lump sum contrbution,

such Paricipant must be employed by the Company or an Affiliated

Employer on December 3 i of such Plan Year, except that a Paricipant

who retired or who became a Transferred Parcipant, as defined in Section

10.4(a) hereof, durng such Plan Year shall receive his lump sum

contribution.

(ii) For each Plan Year beginning on or after Januar 1, 2000, the Company

shall make a Matching Contrbution to the Trust Fund with respect to each

Paricipant who has made a Paricipant Contrbution for such Plan Year

and, at the time of such Paricipant Contrbution, has met the eligibility

requirements to share in the allocation of Company Contrbutions under

Section 2.1. The amount of Matching Contribution with respect to such

Paricipant shall be one dollar ($1.00) for each one dollar ($1.00) of the

Paricipant's Paricipant Contrbution up to three percent (3%) of

Compensation for the Plan Year, and fift cents ($.50) for each one dollar

($1.00) of Paricipant Contrbutions exceeding three percent (3%) of

Compensation but not exceeding six percent (6%) of Compensation for the

Plan Year. If, durng any Plan Year, a Paricipant makes Paricipant

Contributions to the Plan in an amount equal to or greater than six percent

(6%) of such Paricipant's Compensation for such Plan Year, and if the

total of the Matching Contributions made on behalf of such Paricipant

durng such Plan Year does not equal the maximum amount of Matching

Contrbutions required by this Section 3.2(a)(ii) to be made with respect to

six percent (6%) of such Paricipant's Compensation, the Company shall,

within thrty (30) days after the end of such Plan Year, make a lump sum

19

MOT-ERISA 3958

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,

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contrbution to the account of such Paricipant in an amount equal to the

difference between the amount of the Matching Contrbutions that was

required to be made and the amount actually made. To receive such a

IÚmp sum contrbution, such Paricipant must be employed by the

Company or an Afliated Employer on December 31 of such Plan Year,

except that a Paricipant who retired or who became a Trasferrd

Parcipant, as defined in Section lO.4(a) hereof, dunng such Plan Year

shall receive his lump sum contrbution. The largest Matching

Contrbution that may be made with respect to a Paricipant for any Plan

Year beginnng on or after Januar i. 2000, shall be four and one-half

percent (4.5%) of such Paricipant's Compensation while eligible for a

Matching Contrbution dunng the Plan Year.

(b) Profit Sharng Contrbution. The Company's Profit Sharng Contrbution shall be

determined as follows:

(i) Seven and one-half percent (7-I/2%) of the worldwide earngs of the

Corporation and its consolidated subsidiares (including any equity in the

earings of unconsolidated subsidiares) before income taxes, including,

without limitation, non-United States income taxes and United States

federal, state and local income taxes, as adjusted pursuant to Section

3.2(b )(ii) hereof, multiplied by a fraction, the numerator of which is the

aggregate dollar amount of the Compensation paid by the Company for the

Plan Year and the denominator of which is the aggregate dollar amount of

the worldwide Compensation paid by the Corporation and its consolidated

Subsidiares for the Plan Year. From the result so obtained there shall be

subtracted the total amount of the Matching Contribution, if any, paid or

payable with respect to such Plan Year.

(ii) The worldwide earings described in Section 3.2(b )(i) hereof for any Plan

Year shall be adjusted so that there shall be no deductions for (1) amounts

paid or payable to the Fund as the Company Contribution under the Plan

(other than Matching Contrbutions. as described above), (2) the

Company's contribution to the Motorola Executive Incentive Plan and (3)

any extrordinar charge against worldwide earngs, as determined by the

Profit Sharng Committee or its designee. The Company, however, shall

20

MOT-ERISA 3959

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--,

j

deduct amounts paid by the Company under state and federal Social

Security and other laws having puroses similar to the purpose of the Plan.

'Je Company shall als~ make deductions of such amounts as are required

under generally accepted accounting principles for the purose of setting

up reserves for losses on accounts and notes receivable, depreciation and

maintenance or for any other purose provided such reserves are included

in the financial statements which have been certified by the Corporation's

independent certfied public accountats for release to the Corporation's

stockholders.

-.

, "i

i

(iii) In computing the net sales, net earings and worldwide earings described

above for any Plan Year, the Board of Directors of the Company, the

offcers of the Company, and the Profit Sharng Commttee shall be

entitled to rely conclusively upon the computation as prepared and

certified by a firm of independent certified public accountants selected by

the Board of Directors for that purpose, which accountants may be the firm _

of independent certified public accountants employed by the Corporation

for any other purose, and such determination when made by such

independent certified public accountants shall be binding upon the

Company, all Paricipants and the Profit Sharng Committee.

(iv) Nothing in the Plan shall be constred to obligate the Company to make

contributions described in Section 3.2(a)(i) or 3.2(b) to the Fund unless the

net earings and worldwide earings described above shall suffice

therefor. Nothing in the Plan shall be constred to obligate the Company

to contribute to the Trust Fund any sum in excess of the amount allowable

as a deduction for income tax purposes under the applicable provisions of

the Code.

(v) If the net earings or worldwide earngs, or both, described in Section

3.2(a)(i) or Section 3.2(b) hereof with respect to a Plan Year shall not be

sufficient to permit any Company Contrbution under the terms of the

Plan, the failure of the Company to make a Company Contrbution for

such Plan Year shall not be deemed to effect the terination of the Plan or

the Trust.

MOT-ERISA 3960

21

Case: 1:03-cv-05044 Document #: 333-3 Filed: 02/15/08 Page 26 of 52 PageID #:3371
(c) Forfeitues. As of the last day of the month in which a Forfeiture occurs, the

Forfeiture shall be used to reduce the amount of the Company Contribution

such Plan Year, for the next Plan Yea in which there is a Company Contrbution.

otherwise payable for the Plan Year, or, if there is no Company Contrbution for . .

,

i

(d) Time ofPaymenL Company Contrbutions for any Plan Year shall be paid to the

Trust no later than the date prescnbed by law for filig the Company's Feder

income tax retu, including extensions, for such Plan Year.

(e) Retu of Contrbutions. If contnbutions or payments made by the Company to

the Plan shall result in fuds or payments in excess of the amounts required by the

Plan to be paid by the Company by reason of mistake of fact, the Company shall

be entitled to the return of such excess fuds or payments with one (1) year afer

the payment of the excess amount. Each contrbution to the Plan is conditioned

upon its. deductibility under Section 404 of the Code. To the extent that all or any

portion of a contribution is determined not to be deductible under Section 404 of .

the Code, such contrbution or portion thereof shall be retued to the Company

withi one yea after disallowance of the deduction.

3.3 Special Rules Applicable to Sections 3.1 and 3.2. Effective January i, 2001,

Paricipant Contrbutions under Section 3.1 are intended to comply with the alternative method

of meeting nondiscrimination rules set fort in Section 401(k)(12) of the Code, and Company

Contrbutions under Section 3.2(a) are intended to comply with the alternative method of

meeting nondiscrimination rules set fort in Section 401(m)(1l) of the Code, as described in

Internal Revenue Service Notice 98-52. Prior to Januar 1,2001, Paricipant Contrbutions and

Company Contrbutions shall be subject to the limitations in Section 3.4 and 3.5, respectively,

and the following definitions shall apply:

(a) "Average Contribution Percentage" means the average (expressed as a

percentage to the nearest one-hundredth of one percent) of the Contrbution

Percentages of the Eligible Paricipants in a group.

(b) "Actual Deferral Percentage" means the ratio (expressed as a percentage to the

nearest one-hundredth of one percent) of the sum of Elective Deferrals and

Qualified Employer Deferrl Contrbutions made on behalf of an Eligible

Paricipant for the Plan Year to the Eligible Paricipant's Compensation for the

22

MOT-ERISA 3961

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.. -\

j

Plan Year. The Actu Deferrl Percentage of an Eligible Paricipant who makes

no Elective Deferrs and is allocated no Qualified Employer Deferrl

Contrbutions shall be zero (0).

(c) "Average Actual Deferral Percentage" means the averae (expressed as a

percentage to the neaest one-hundredth of one percent) of the Actual Deferal

Percentages of the Eligible Paricipants in a group.

(d) "Compensation" meas any definition of compensation that satisfies Section

414(s) of the Code and the regulations thereunder which is used by the Company

from time to time.

,--

(e) "Contribution Percentage" meas the ratio (expressed as a percentage to the

nearest one-hundredth of one percent) of the sum of the Statutory Matchig

Contrblltions (other than Qualified Matching Contrbutions) and Qualified

Employer Contributions made on behalf of the Eligible Paricipant for the Plan _

Year to the Eligible Paricipant's Compensation for the Plan Year. The

. Contrbution Percentage of an Eligible Paricipant who neither makes nor receives

such contnbutions shall be zero (0).

(f) "Elective Deferrals" means contrbutions made by the Company to ths Plan and

any other qualified plans that are maintained by the Company which are

aggegated with ths Plan for the Plan Year at the election of the Eligible

Paricipant, in lieu of cash compensation (that either would have been received by

the Eligible Paricipant in the Plan Year or is attbutable to services performed-in

the Plan Year and would have been received by the Eligible Paricipant withn two

and one half (2-1/2) months after the close of the Plan Year, but for a deferr

election), and shall include contnbutions made pursuant to a Compensation

reduction agreement. Such "Elective Deferrals" shall be taken into account for a

Plan Year only if they are allocated to the Eligible Paricipant's account as of a

date withn the Plan Year, the allocation is not contigent on the Eligible

Paricipant's paricipation in the Plan or performance of services for the Company

after such date, and the Elective Deferrals are paid to the Trust no later than

twelve (12) months after the close of the Plan Year to which they relate.

23 MOT -ERISA 3962

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""'I

J

:~)

(g) "Eligible Partcipant" for puroses of Section 3.4 hereof meas any Employee

who is eligible under ths Plan to have Elective Deferrls or Qualified Employer

Deferral Contrbutions allocated to his account for the Plan Year. "Eligible

ParicipaDt" for puioses of S~ction 3.5 hereof means any Employee who is

eligible under ths Plan to have Statutory Matching Contrbutions or Qualified

Employer Contrbutions allocated to his account for the Plan year.

(h) "Qualified Employer Contributions" mean Qualified Nonelective

Contrbutions and Elective Deferrals which are taken into account under the Plan

in determining an Eligible Paricipant's Contrbution Percentage; provided,

however, that in order for Elective Deferrls to be taken into account, all Elective

Deferrls must satisfy the limitations of the Actual Deferrl Percentage test by

including and excluding such Elective Deferrls, and the Qulified Nonelective

Contrbutions and Elective Deferrls taen into account must satisfy the other

requirements of Treasur Regulation Section 1.401 (m)-l (b)(5). Qualified

Nonelective Contrbutions taken into acc~)Unt to determine the Paricipant's.

Contrbution Percentage canot be used in determining an Eligible Paricipant's

Actual Deferral Percentage.

(i) "Qualified Employer Deferral Contributions" means Qualified Nonelective

Contrbutions and Qualified Matching Contrbutions taen into account under ths

Plan and any other qualified plans that are maintained by the Company or an

Affiliated Employer which are aggregated with this Plan in determing an

Eligible Paricipant's Actual Deferral Percentage which satisfy the requirements

of Treasury Regulation Section 1.40 I (k)-l (b)(5). Qualified Nonelective

Contrbutions taken into account to determine the Parcipant's Actual Deferrl

Percentage canot be used in determining an Eligible Paricipant's Contrbution

Percentage.

u) "Qualifed Matching Contributions" means Statutory Matching Contrbutions

taken into account under the Plan in determining an Eligible Paricipant's Actual

Deferrl Percentage. In order for Statutory Matching Contrbutions to be

considered as Qualified Matching Contrbutions, the Statutory Matching

Contributions must be one hundred percent (100%) vested and nonforfeitable

when made and must be distrbutable under the Plan only in accordance with the

distrbution provisions applicable to Elective Deferrals.

24 MOT-ERISA 3963

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,

,

.J

~l-,

;

3.4

l

(I) "Qualified Nonelective Contributions" means contrbutions made by the

Company to this Plan and to any other qualified plans maintained by the Company

or an Affiliated Employer which are aggregated with this Plan (other than Elective

Deferrs and Statutory Matchig Contrbutions) which are allocated to the

Eligible Paricipant's account and which the Eligible Paricipant may not elect to

receive in cash until distrbuted from the plan. In order for such contrbutions to

be considered as Qualified Nonelective Contrbutions. they must be one hundred

percent (100%) vested and nonforfeitable when made and must be distrbutable

under the terms of the Plan only in accordance with the distrbution provisions

applicable to Elective Deferrls.

(I) "Statutory Matching Contributions" means contrbutions made by the

Company to the Plan for the Plan Year and allocated to an Eligible Paricipant's

account. by reason of his Elective Deferrls; provided, however, that such

Statutory Matching Contrbutions must be allocated to the Eligible Paricipant's.

account as of a date withn that Plan year and actually be paid to the Trust no later

than twelve (12) months after the close of the Plan Year to which they relate.

Actual Deferral Percentage Tests.

(a) Tests. For each Plan Year prior to Januar 1, 2001. one of the following tests

must be satisfied.

(i) The Average Actual Deferrl Percentage for Eligible Paricipants who are

Highly Compensated Employees for the Plan Year shall not exceed the

Average Actual Deferral Percentage for Eligible Paricipants who ar NonHighly Compensated Employees for such Plan Year multiplied by one and

one-fourth (1.25); or

(ii) The Average Actual Deferral Percentage for Eligible Paricipants who are

Highy Compensated Employees for the Plan Year shall not exceed the

Average Actual Deferral Percentage for Eligible Paricipants who are NonHighly Compensated Employees for the Plan Year multiplied by two (2),

provided that the Average Actual Deferrl Percentage for Eligible

Paricipants who are Highly Compensated Employees does not exceed the

25

MOT -ERISA 3964

Case: 1:03-cv-05044 Document #: 333-3 Filed: 02/15/08 Page 30 of 52 PageID #:3375
Average Actual Deferl Percentage for Eligible Paricipants who are NonHighly Compensated Employees by more than two (2) percentage points.

(b) Correcting Excess Contrbutioni

(i) If the limitation imposed by Section 3.4(a) is not satisfied for any Plan

Year, the Plan shall tae such remedial measures as are required under this

subparaph (b )(i) no later than the last day of the Plan Year following

the Plan Year for which Excess Contrbutions were allocated. The

Company, in its sole discretion, may satisfy the limitations set fort above

through any of the following ways, or through a combination thereof:

.-

(A) The Company may, in its sole discretion, make a Qualified

Nonelective Contrbution or Qualified Matching Contrbution, or

both, on behalf of each Eligible Parcipant who is a Non-Highy

Compensated Employee. Such additional contribution shall be .

allocated to the accounts of such Eligible Paricipants in the

proportion that each Eligible Paricipant's Compensation bear to

the Compensation of all such Non-Highly Compensated Employee

Eligible Paricipants.

(B) The Company may determine the Excess Contrbutions under

subparagrph (b )(ii) below and distrbute such Excess

Contrbutions, with income or loss attbutable thereto under

subparagraph (b )(iii) below.

(ii) Excess Contrbutions shall be determined as follows:

(A) The Company shall ran its Eligible Paricipants who are Highly

Compensated Employees by the dollar amount of Elective

Deferrls and Qualified Employer Deferral Contnbutions in

descending order. The Company shall then reduce the amount of

Elective Deferrals and Qualified Employer Deferral Contrbutions

made on behalf of the Highly Compensated Employee with the

highest amount of such contributions until the first of the following

occurs:

26

MOT-ERISA 3965

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.1j

(1) The Plan satisfies the limitations set fort in Section 3.4(a); -..

(2) The doll~ amount of Elective Deferrls and Qualified

Employer Deferrl Contrbutions for such Highy

Compensated Employee is reduced to equal the amount of

such contrbutions on behalf of the Highy Compensated

Employee with the next highest amount of Elective

Deferrls and Qualified Employer Deferrl Contrbutions.

The Company shall then repeat the application of ths subpargrph

(b)(ii)(A) until the Plan satisfies the limitations in Section 3.4(a).

(B) For each Eligible Paricipant who is a Highly Cornpensated

Employee, "Excess Contrbutions" means, with respect to a Plan

Year, the excess of:

(1) The sum of the Elective Deferrals and Qualified Employer

Deferrl Contrbutions allocated to the Highy

Compensated Employee for such Plan Year; over .:)

(2) The maximum amount of the contnbution permitted under

Section 401 (k)(3)(A)(ii).

Notwithstading the foregoing, II no event shall Excess

Contrbutions exceed the amount of Elective Deferrals and

Qualified Employer Deferral Contributions made on behalf of such

Highly Compensated Employee for such Plan Year.

, , :~ .

(iii) The income or loss attbutable to Excess Contributions shall include a pro

rata share of income or loss in the Plan Year in which the Excess

Contrbutions were made (the "Contribution Year Income"). Contrbution

Year Income may be determined by the method used for allocating Income

to Paricipants' accounts provided it is reaonable, it does not violate

Section 401(a)(4) of the Code, and it is used consistently for all

Paricipants and for all corrective distributions under the Plan for a Plan

27 MOT -ERISA 3966

Case: 1:03-cv-05044 Document #: 333-3 Filed: 02/15/08 Page 32 of 52 PageID #:3377
"

)

Year. Alteratvely, Contrbution Year Income may be determined by

multiplying the income or loss for the Plan Year allocable to Elective

Deferrs and Qualified Employer Deferrl Contrbutions by a fraction the

niimerator of which is the Excess Contrbutions of the Eligible Parcipant

for the Plan Year and the denominator of which is the total balance of the

Eligible Paricipant's account attbutable to Elective Deferrals and

Quaified Employer Deferrl Contrbutions, reduced by the income and

increased by the loss allocable to such amount for the Plan Year.

(iv) Excess Contrbutions shall be reduced, in accordance with regulations

prescribed by the Secretar of the Treasur, by the amount of excess

Elective Deferrs distrbuted to the Eligible Paricipant under Section

3.1(f) for his taable year ending with or within such Plan Year.

3.5 Average Cont.ribution Percentage Tests.

(a) Tests. For each Plan Year prior to Januar I, 2001, one of the following tests

must be satisfied:

!~)

(i) The Average Contrbution Percentage for Eligible Paricipants who are

Highly Compensated Employees for the Plan Year shall not exceed the

Average Contrbution Percentage for Eligible Paricipants who are NonHighly Compensated Employees for the Plan Year multiplied by one and

one-fourth (1.25); or

(ii) The Average Contrbution Percentage for Eligible Paricipants who are

Highly Compensated Employees for the' plan Year shall not exceed the

Average Contrbution Percentage for Eligible Paricipants who are NonHighly Compensated Employees for the Plan Year multiplied by two (2),

provided that the Average Contnbution Percentage for Eligible

Paricipants who are Highly Compensated Employees does not exceed the

Average Contnbution Percentage for Eligible Paricipants who are NonHighly Compensated Employees by more than two (2) percentage points.

(b) Correcting Excess Aggregate Contrbutions

28

MOT-ERISA 3967

Case: 1:03-cv-05044 Document #: 333-3 Filed: 02/15/08 Page 33 of 52 PageID #:3378
(i) If the limitation imposed by Section 3.5(a) is not satisfied for any Plan

Yea, the Plan shall tae such remedial measures as are required under this

subpargrph (b )(i) no later than the last day of the Plan Year following

the Plan Year for which- Excess Aggregate Contrbutions were allocated.

The Company, in its sole discretion, may satisfy the limitations set fort

above through any of the following ways, or though a combination

thereof:

."1

.I

(A) The Company may, in its sole discretion, make a Qualified

Nonelective Contrbution on behalf of each Eligible Paricipant

who is a Non-Highly Compensated Employee. Such additional

contnbution shall be allocated among the accounts of such Eligible

Paricipants in the proportion that each Eligible Paricipant's

Compensation bear to the Compensation of all such Non-Highly

Compensated Employees.

-1

(B) The Company may determine Excess Aggregate Contrbutions

under subpargrph (b)(ii) below and may forfeit Statutory

Matching Contrbutions, with income or loss attbutable thereto, if

forfeitable under the terms of the Plan. Such forfeitues shall be

allocated to the accounts of Non-Highly Compensated Employees

in the proportion that each such Eligible Parcipant's

Compensation bear to the Compensation of all such Eligible

Paricipants, in the year in which such forfeitue occurs.

(C) The Company may determine Excess Aggrgate Contrbutions

under subpargraph (b )(ii) below and distrbute such Excess

Aggregate Contrbutions with income or Joss attributable thereto

under subpargrph (b)(iii) below.

(ii) Excess Aggregate Contrbutions shall be determined as follows:

(A) The Company shall ra its Eligible Parcipants who are Highy

Compensated Employees by dollar amount of the aggregate of

Statutory Matching Contrbutions, employee contrbutions and

Qualified Employer Contrbutions, in descending order. The

29

MOT-ERISA 3968

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\

i

..: "

Company shall then reduce the amount of Statutory Matching

Contrbutions, employee contrbutions, if any, and Qualified

Employer Contrbutions made on behalf of the Highly

Compensated Employees with the highest amount of such

contrbutions until the first of the following occur:

(1) The Plan satisfies the limtations set fort in Section 3.5(a);

or

(2) The dollar amount of Statutory Matching Contrbutions,

employee contrbutions, and Qualified Employer

Contrbutions for such Highy Compensated Employee is

reduced to equal the amount of such contrbutions on behalf

of the Highly Compensated Employee with the next highest

amount of Statutory Matching Contrbutions, employee

contrbutions and Qualified Employer Contrbutions.

The Company shall then repeat the application of this

subpargrph (b )(ii)(A) until the Plan satisfies the limitations in

Section 3.5(a).

(B) For each Eligible Paricipant who is a Highly Compensated

Employee, "Excess Aggregate Contrbutions" means, with respect

to any Plan Year, the excess of:

(1) The sum of the Statutory Matching Contnbutions,

employee contributions and Qualified Employer

Contrbutions allocated to the Highly Compensated

Employee for such Plan Year; over

(2) The maximum amount of contrbutions permitted under

Section 401 (m)(2)(A) ofthe Code.

Notwithstanding the foregoing, in no event shall Excess Aggregate

Contrbutions exceed the amount of Statutory Matching

Contnbutions, employee contrbutions, and Qualified Employer

30 MOT -ERISA 3969

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.\

j

Contrbutions made on behalf of such Highly Compensated

Employee for such Plan Year.

.... -,

-:J

(iii) The income or loss attributable to Excess Aggregate Contrbutions shall

include a pro ra share of income or loss in the Plan Year in which the

Excess Aggregate Contrbutions were made (the "Contrbution Year

Income"). Contrbution Year Income may be determined by the method

used for allocating Income to Paricipants' accounts provided it is

reasonable, it does not violate Section 401(a)(4) of the Code, and it is used

consistently for all Parcipants and for all corrective distrbutions under

the Plan for a Plan Yea. Alternatively, Contrbution Year Income may be

determined by multiplying the income or loss for the Plan Year allocable

to employee contrbutions, Statutory Matching Contrbutions, and

Quaified Employer Contnbutions by a frction the numerator of which is

the Excess Aggregate Contnbutions of the Eligible Paricipant for the Plan

Year and the denominator of which is the total balance of the Eligible _

Paricipant's account attbutable to employee contrbutions, Statutory

Matching Contrbutions, and Qualified Employer Contrbutions, reduced

by the income and increased by the loss allocable to such amount for the

Plan Year.

3.6 Additional Testing Rules. For Plan Year prior to Januar 1,2001, the following roles

shall apply to the nondiscrimination tests set fort in Sections 3.4 and 3.5 ofthe Plan.

(a) The Actual Deferral Percentage or Contrbution Percentage of any Eligible

Paricipant who is a Highly Compensated Employee for the Plan Year and who is

eligible to have Elective Deferrals, Qualified Deferrl Contrbutions, employee

contrbutions, Statutory Matching Contrbutions or Qualified Employer

Contrbutions allocated to his account under two or more plans descnbed in

Section 401(a) of the Code that are maintained by Affliated Employers shall be

determined as if all such contrbutions were made under a single plan provided

that no such plan is an employee stock ownership plan as defined in Sections

4975(e) and 409 of the Code ("ESOP"). If any such plan is an employee stock

ownership plan, the Actual Deferral Percentage or Contrbution Percentage shall

be determned separately for all ESOPs and all non-ESOPs. If such an Eligible

Paricipant paricipates in two or more plans that have different plan year, all

31 MOT-ERISA 3970

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, '\

.J

(c)

such plans ending with or within the same calendar year shall be treated as a

single plan.

(b) Ths PlaD and any other qualifi~d plans which any Mfiliated Employer maintains

providing for a cash or defered argement, employee contnbutions or Statutory

Matching Contrbutions shall be treated as follows: If this Plan satisfies the

requiements of Section 401(a)(4) or 410(b) of the Code only if aggregated with

one or more other plans, or if one or more other plans satisfy the requirements of

Section 401(a)(4) or 41O(b) of the Code only if aggregated with this Plan, then

Sections 3.4 and 3.5 shall be applied by determining the Actual Deferral

Percentage or Contrbution Percentage of Eligible Parcipants as if all such plans

were a single plan. Ths Plan may be aggregated with any other qualified plan

maintained by the Company or an Mfiliated Employer to determine whether the

Actual Deferral Percentage or Contrbution Percentage of Paricipants satisfies the

requirements of. Sections 3.4 and 3.5, provided that (i) the aggregated plans are

treated as one plan for purposes of Sections 401(a)(4), 401(k), 401(m) and 41O(b) .

of the Code, (ii) the plans so aggregated have the same plan year, and (iii) no plan

so aggregated is an ESOP.

If the requirements of Sections 3.4 and 3.5 above are both satisfied by use of the

limitations established in Section 3.4(a)(ii) and 3.5(a)(ii), respectively, the

Average Deferrl Percentages and Average Contnbution Percentages for Eligible

Paricipants who are Highly Compensated Employees must also satisfy the

aggregate use limitation set fort in Treasury Regulation Section 1.401(m)-2.

(d) For puioses of Section 4.3(a), Excess Aggregate Contrbutions, including

amounts forfeited by Highly Compensated Employees under Section 3.5(b)(i)(B),

shall be treated as Anual Additions. Forfeited Statutory Matching Contrbutions

that are reallocated to the accounts of other Paricipants for the Plan Year in which

the forfeiture occurs are treated under Section 415 as Anual Additions for the

Paricipants to whose accounts they are reallocated and for the Paricipants from

whose accounts they are forfeited. Any reduction of Statutory Matchig

Contrbutions required under Section 3.5 shall be applied first to hofit Sharng

Contrbutions and then, to the extent necessar, to Matching Contrbutions.

32

MOT-ERISA 3971

Case: 1:03-cv-05044 Document #: 333-3 Filed: 02/15/08 Page 37 of 52 PageID #:3382
For any Plan Year beginnng on or after Januar 1, 1999, the Profit Sharng Committee may elect

to apply Sections 3.4 and 3.5 without regard to eligible Employees (other than Highly

Compensated Employees) who have not met the one Year of . - Serice requirement of Section 2.1,

to the extent permitted under Section 401 (k)(3)(F) of the Code.

(c) Any distrbution under Section 3.4 or 3.5 may be made without any notice or

consent otherwse required under the Plan or Sections 41 1 (a)(l I) and 417 ofthe

Code. In addition, any such distrbution wil not be considered a distrbution for

puioses of determning whether the Plan satisfies the minimum distrbution

requirements of Section 5.3(d) hereof.

(d) Sections 3.4 and 3.5 shall be applied so as to meet the requirements of Sections

401(k) and 401(m) of the Code, resectively, and the regulations promulgated

thereunder.

MOT-ERISA 3972

33

Case: 1:03-cv-05044 Document #: 333-3 Filed: 02/15/08 Page 38 of 52 PageID #:3383
ARTICLE 4 - ALLOCATIONS TO PARTICIPANTS' ACCOUNTS

4.1 Participant Accounts. The assets of the Trut Fund shall be invested in such Investment

Funds as may be selected by the Profit Sharng Committee from time to time. The Profit Sharng

Committee shall maitain or cause to be maintained records of each such Investment Fund that

shall accurately reflect from time to time the interest in the Trust Fund of each Parcipant. Such

records shall be in the form of individual accounts, and credits and charges shall be made to such

accounts in the maner described in the PLan

Each Paricipant shall have two accounts, a Company Contrbution Account and a Paricipant

Contrbution Account, in each Investment Fund in which account balances, if any, are maintaed

for the Paricipant. The Profit Sharng Committee may establish such additional Paricipant

accounts or sub-accounts as it deems appropriate from time to time to properly reflect

Paricipants' benefits under the Plan. The maintenance of individual accounts for each

Paricipant is for accounting purposes only, and a segregation of the assets of the Trust Fund to

such accounts shall not be required.

~.

Each Parcipant shall be entitled to direct the maner in which the shares (including fractional

shares) of Motorola, Inc. common stock in his account in the Motorola Stock Fund are to be

voted. The Trustee shall vote such shares in accordance with the directions of the Paricipants.

This requirement wil be met if the Trustee votes the combined frctional shares to the extent

possible to reflect the direction of the voting Paricipants. All shares credited to Paricipants'

accounts as to which the Trutee does not receive voting directions, aid all unallocated shares

held by the Trustee, shall be voted by the Trustee proportionately in the same maner as the

Trutee votes shares as to which the Trustee has received voting instrctions. The Corporation

wil distrbute proxy materials to all Paricipants who have an account balance in the Motorola

Stock Fund prior to each stockholders' meeting at the same time it distrbutes such materials to

all other stockholders.

4.2 Account Adjustments. The accounts ofthe Paricipants shall be adjusted in accordance

with the following:

(a) Allocation of Profit Sharing Contributions. As ofthe last day of the Plan Year,

each Paricipant's share of the Profit Sharng Contrbution as determined under

this Section 4.2(a) shall be credited to such Participant's Company Contribution

Accounts. Pnor to Januar I, 2000, a Paricipant's proportionate share of the

34

MOT -ERISA 3973

Case: 1:03-cv-05044 Document #: 333-3 Filed: 02/15/08 Page 39 of 52 PageID #:3384
Profit Shanng Contrbution for a Plan Year shall be a share equal to the ratio of

his Paricipant Contrbution for such Plan Year not exceeding thee percent (3%)

of his Compensation to the aggregate amount of all Paricipants' Contnbutions for

such Plån Year not exceeding thee percent (3%) of each Paricipant's

Compensation. Effective Januar 1,2000, a Paricipant's proportionate share of

the Profit Shanng Contrbution for a Plan Yea shall be a share equal to the ratio

of his Paricipant Contrbution for such Plan Year not exceeding six percent (6%)

of his Compensation to the aggregate amount of all Parcipants' Contrbutions for

such Plan Year not exceeding six percent (6%) of each Paricipant's

Compensation. To receive a share of the Profit Shanng Contribution for a Plan

Year, the Paricipant must be employed by the Company or an Afliated

Employer on December 3 I of such Plan Year, except that a Paricipant who

retired dunng such Plan Year or who is an Eligible Traferred Paricipant, as

defined in Section lO.4(e) hereof, shall receive his shae.

(b) Allocation of Participant Contributions. Paricipant Contnbutions made on.

behalf of a Paricipant shall be allocated to his Paricipant Contrbution Account

as soon as practicable after such Paricipant Contrbutions are paid to the Trust

Fund. ~1

(c) Allocation of Matching Contributions. Matching Contrbutions made on behalf

of a Paricipant shall be allocated to such Parcipant's Company Contrbution

Account as soon as practicable after such Matching Contrbution is paid to the

Trust Fund.

(d) Allocation of Qualifed Nonelective Contributions and Qualifed Matching

Contributions. Qualified Nonelective Contrbutions and Qualified Matching

Contnbutions for a Plan Year shall be allocated as of the last day of such Plan

Year to the Paricipant Contrbution Accounts and Company Contrbution

Accounts, respectively, of Eligible Paricipants who are Non-Highly Compensated

Employees.

(e) Allocation of Income to Participants. Income shall be separately determined for

each Investment Fund as of each Valuation Date and shall be allocated among the

accounts within such Investment Fund as of each Valuation Date, in accordance

with the rules and regulations governing such Investment Funds. Amounts

35

MOT-ERISA 3974

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4.3

..

'. )

deemed allocated to accounts as of the last day of the Plan Year hereunder shall

not be taken into account under this Section 4.2(e) until such amounts are actually

paid to the Trut Fund and the actual allocation of fuds occurs.

Maximum Allocations and Top Heavy Provisions

(a) Limitation on Allocations to Partcipants. Notwthstanding any other provision

of the Pian Anual Additions (as defined below) which can be credited to the

accounts of a Paricipant in any Plan Year (a "limitation year) under this Plan

and any other defined contrbution plan maintained by an Affiliated Employer

shall not exceed the lesser of (i) $30,000, or, if greater, one-four of the defied

benefit dollar limitation set fort in Section 415(b)(l) of the Code as in effect for

the limitation year, or (ii) twenty-five percent (25%) of the Paricipant's

compensation (as defined below) for such limitation year. "Anual Additions"

means the sum. of (1) contrbutions of Afliated Employers (2) Parcipant

contrbutions and (3) forfeitues, allocated to the accounts of a Paricipant in this.

Plan and in any other tax-qualified defined contrbution plan maintained by an

Affiliated Employer with respect to a limitation year, as more fully described in

Code Section 4 i 5( c )(2) and regulations thereunder.

If Anual Additions for any Paricipant exceed the limitation in the first sentence

of this Section 4.3(a), the Elective Deferrls made by the Paricipant for the

limitation year which cause the excess, plus any Income allocable thereto, shall be

returned to the Paricipant. If, after returing such Elective Deferrals and Income

to the Paricipant an excess stil exists, and the Paricipant is covered by the Plan

at the end of the limitation year, the excess amount in the Paricipant's accounts

wil be used to reduce Company Contrbutions for such Paricipant in the next

limitation year, and each succeeding limitation year if necessar. However, if the

Paricipant is not covered by the Plan at the end of a limitation year, such excess

. amount will be held unallocated in a suspense account. The suspense account will

be applied to reduce future Company Contnbutions for all remaining Paricipants

in the next limitation year, and each succeeding limitation year if necessar, A

suspense account under ths Section 4.3( a) wili not paricipate in the allocation of

Income. If a suspense account is in existence at any time during a paricular

limitation year, all amounts in the suspense account must be allocated and

reallocated to Paricipants' accounts before any Company or any Paricipant

36

MOT-ERISA 3975

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Contrbutions may be made to the Plan for that limitation year. Excess amounts

II a suspense account may not be distrbuted to Paricipants or former

Paricipants.

As used in ths Section 4.3(a), the term "compensation" shall have the meanng

set forth in Treaur Reglation Section 1.415-2(d); provided, however, that the

Company shall have the nght to use such alternate definition of compensation as

permitted under Section 415 of the Code and the regulations thereunder.

~

Notwthstanding any other provision of the Plan to the contrar, for limitation

year beginnng pnor to Januar 1,2000, the total Anual Additions on behalf of

a Paricipant for any limitation year shall not cause the sum of that Paricipant's

defined contrbution plan frction and defined benefit plan frction (as those ters

are defined in Section 415 of the Code and regulations thereunder, and as

modified to the extent necessar to meet the requirements of Section 416(h) of the

Code) to exceed 1.0. If the sum of such fractions would exceed 1.0 for any .

limitation year, the excess amount will be eliminated first by making appropriate

adjustments under any defined benefit plan maintained by the Affliated Employer

and then under this Plan. The limitations in this Section 4.3(a) are intended to

comply with the provisions of Section 415 of the Code so that the maximum

benefits provided by plans of the Affliated Employers shall be equal to the

maximum amounts allowed under Section 415 of the Code and regulations

thereunder.

¡

MOT-ERISA 3976

37

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(b) Top Heavy Provisions.

..

..,

(i) Determination of Top Heavy. The Plan wil be considered to be "Top

Heavy" for a Plan Year -if, as of the last day of the preceding Plan Year

(the "Determination Date''), the aggregate value (determined as of the

most recent Valuation Date that falls withi or ends with the Plan Year

ending on the Determination Date) of the accounts of Paricipants who are

Key Employees, as defied in Section 4 i 6 (i) of the Code, exceeds sixty

percent (60%) of the aggregate value of the accounts of all Paricipants,

excluding former Key Employees and individuals who have not performed

services for the Company at any time during the five year penod ending

on the Determination Date. If the Plan is par of a Required Aggregation

Group, as defined in Section 41 6(g) of the Code, the Plan wil be

considered to be Top Heavy for a Plan Year if. as of the Determination

Date, the sum of (1) the aggregate value (determined as of the most recent

valuation withn the preceding Plan Year) of the accounts of Key .

Employees under all defined contrbution plans included in the Required

Aggregation Group and (2) the present value (determined as of the most

recent Valuation Date within the preceding Plan Year) of the cumulative

accrued benefits for Key Employees under all defined benefit plans

included in the Required Aggregation Group exceeds sixty percent (60%)

of a similar sum for all paricipants in all such plans, excluding former

Key Employees and individuals who have not performed services for the

Company at any time during the five year penod ending on the

Determination Date. For puioses of determining the value of the account

or present value of the cumulative accrued benefit for any Paricipant, such

values shall be increased by the aggregate distributions made with respect

to such Paricipant under a plan dunng the five (5) year period ending on

the Determination Date, including any terminated plan maintained withn

the last five (5) year ending on the Determination Date which, if it had

not been terminated, would have been included in the Required

Aggregation Group. The Top Heavy ratio wil be computed in accordance

with the provisions of Section 416 of the Code. Notwithtanding the

above, the Plan shall not be considered to be Top Heavy for any Plan Year

in which the Plan is included in a Required Aggregation Group or

Permissive Aggregation Group, within the meaning of Section 41 6(g) of

38

MOT-ERISA 3977

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,

.'

the Code, which is not Top Heavy. For puise hereof, the Required

Aggregation Group will include each defined contribution plan and each

defined benefit plan intended to comply with Section 401(a) of the Code

aid maintained by an Affliated Employer in which a Key Employee

paricipates in the Plan Year containing the Determination Date or any of

the four (4) preceding Plan Year, or any other such plan of an Affliated

Employer which enables any such plan in which a Key Employee

parcipates to meet the requirements of Section 401(a)(4) or 410 of the

Code. For puioses hereof, a Permissive Aggregation Group includes all

plans requied to be included in the Required Aggregation Group plus one

or more other plans that are not par of the Required Aggregation Group

but that satisfY the requirements of Sections 401 (a)( 4) and 410 of the Code

when considered together with the plans contaned in the Required

Aggregation Group. For puroses of this Section 4.3(b) "compensation"

shall have the meanng as set forth in Treasur Regulation Section 1.415-

2( d); provided, however, that the Company shall have the right to use such .

alternate definition of compensation as may be permitted under Section

416 of the Code and the regulations thereunder.

. ~ ..

(ii) Minimum Contributions. Notwthstanding the provisions of Sections

3.2 and 4.2 hereof, for each Plan Year in which the Plan is Top Heavy, the

Company Contrbutions plus Forfeitues, if any, allocated to the account

of each Paricipant (including Paricipants who fail to complete 1,000

Hour of Service dunng the Plan Year) who is not a Key Employee shall

equal at least three percent (3%) of his compensation for such Plan Yea,

or, if less, the largest percentage of compensation provided on behalf of

any Key Employee for that Plan Year. For purposes of the foregoing, (1)

the percentage of compensation for each Key Employee shall be

determined by dividing the sum of the share of the Company Contrbution

plus Forfeitues, if any, and Elective Deferrls allocated on behalf of such

Key Employees by so much of compensation as does not exceed the

limitation set forth in Section 1.10; (2) all defined contrbution plans

required to be included in the Required Aggregation Group shall be treated

as one plan; and (3) the minimum contnbution shall be three percent (3%)

if the Plan enables a defined benefit plan included with it in a Required

Aggregation Group to meet the requirements of Section 401(a)(4) or 410

39

MOT-ERISA 3978

Case: 1:03-cv-05044 Document #: 333-3 Filed: 02/15/08 Page 44 of 52 PageID #:3389
,.._ii\

of the Code. The minium allocation wil be determined without regard

to any Social Secunty contrbution. Notwthstanding the foregoing,

Parcipants who also paricipate in the Motorola, Inc. Pension Plan shall

not receive both the - defmed contrbution and the defined benefit

miniums provided for in Section 416(c) of the Code. In such case, the

minimum contrbution or benefit requirement for such other plan will be

met by increasing the thee percent (3%) requirement of ths pargrph (ii)

to five percent (5%).

4.4 Valuation of Fund. The Profit Sharng Committee shall, as of the las Valuation Date

of the Plan Yea and as of such other Valuation Dates as it shall deterine, prepare a statement

of the condition of the Trust Fund settng fort all contrbutions, invesents, receipts,

disbursements, income and other transactions effected with respect to the Trust Fund durng the

penod for which the statement is being prepared, including a list of all cash, securties, and other

propert held on such. Valuation Date at their cost and fair market values determined as of the

Valuation Date for which the statement of condition is being prepared.

4.5 Investment of Funds. Each Paricipant, former Paricipant, alternate payee or

Beneficiar who retains an account balance in the Plan ("Accountholder") shall be permtted to

direct the investment of his accounts among Investment Funds that the Trustee shall from time to

time cause to be made available at the direction of the Profit Sharng Committee, in accordance

with Section 404(c) of ERISA and regulations thereunder. Each Accountholder shall bear the

sole responsibility for the selection of the Investment Funds for his accounts, and neither the

Trustee, the 404( c) Fiduciar nor the Profit Sharng Committee shall have any responsibility or

liability for any losses that may occur in connection with such selection, as set fort in Section

404(c) of ERISA and regulations thereunder. Investment elections by an Accountholder shall be

made in such maner, in such increments, and at such time or times, as authoried under the

administrative rules and procedures established from time to time by the 404( c) Fiduciar

consistent with such reasonable guidelines and limitations as the Profit Sharng Committee shall

deem appropnate for the effcient administration of the Plan. All earngs and expenses,

including commissions and trsfer taxes, realized or incurred in connection with any

investments puruant to an Accountholder's directions shall be credited or charged to the account

for which the investment is made, except to the extent paid by the Company in its sole discretion.

4.6 Transferred Benefits. With the consent of the Profit Sharng Committee or its

designee, in its discretion, amounts may be transferred to this Plan by or on behalf of an

40

MOT -ERISA 3979

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~)

Employee from other pension, profit shanng, stock bonus or other retirement benefit plans

qualified under Section 401(a) of the Code (a "qualified plan"). In addition, a former Paricipant

who continues to have a vested account balance in the Plan may elect to trsfer to ths Plan any

eligible benefit amount' payable to or on behålf of the former Paricipant from the Motorola

Pension Plan. Such trsferred benefits shall become subject to the terms and conditions of ths

Plan. The transferred benefits shall be credited to the Employee's (or former Parcipant's)

Parcipant Contrbution Account as of the first day of the month following the date the transfer

is made. The Employee (or former Paricipant) shall have the nght to direct the investment of

the transferred benefits in the vanous Investment Funds as provided in Section 4.5 hereof, and in

the absence of such direction, the trsferred benefits will be invested in the Balanced Fund I

Investment Fund. The trsferred benefits shall be fully vested at all times and shall not be

subject to forfeiture. The amounts which may be trsferred to ths Plan include: (a) amounts

trferred to this Plan directly from another qualified plan; (b) lump-sum distrbutions received

by an Employee (or, in the case of the Motorola Pension Plan, by a former Paricipant) from

another qualified plan which are eligible for ta free rollover to a qualified plan and which are

trferrd by the Employee (or former Paricipant) to this Plan withn sixty (60) days following _

his receipt thereof; (c) amounts trsferred to this Plan from a conduit individual retirement

account provided that the conduit individual retirement account has no assets other than assets

which (i) were previously distrbuted to the Employee by another qualified plan as a lump-sum

distrbution, (ii) were eligible for tax-free rollover to a qualified plan, and (iii) were deposited in

such conduit individual retirement account within sixty (60) days after receipt thereof and other

than earings on said assets; and (d) amounts distrbuted to the Employee from a conduit

individual retirement account meeting the requirements of clause (c) above and trsferred by the

Employee to this Plan within sixty (60) days of his receipt thereof from such conduit individual

retirement account. Pnor to accepting any trsfers to which this Section 4.6 applies, the Profit

Shanng Committee or its designee may require the Employee to establish that the amounts to be

transferred to this Plan meet the requirements hereof

MOT-ERISA 3980

41

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..,,,

.j

. .: ~i

ARTICLE 5 - VESTING AND DISTRIBUTION OF BENEFITS

5.1 Vesting of Benefits.

(a) A Paricipant's interest in his Paricipant Contrbution Account shall be 100%

vested and nonforfeitable at all times. A Paricipant's interest in any Qualified

Employer Contnbutions, as defined in Section 3.3(h), shall be 100% vested and

nonfodeitable at all ties.

(b) If a Paricipant's employment with the Company is termnated due to retirement

on or after his Normal Retirement Date or Early Retirement Date, or due to his

death or Total and Permanent Disability, such Parcipant (or, in the case of death,

his Beneficiar) shall be entitled to receive the entire amount credited to his

Company Contrbution Account.

(c) Effective for any Paricipant who eas an Hour of Service on or after July i, ,

2000, such Paricipant's interest in his Company Contrbution Account shall be

100% vestçd and nonforfeitable, without regard to the Paricipant's Year of

Service. If a Paricipant's employment with the Affiliated Employers. terminates

prior to July 1,2000, for a reason other than as described in Section 5.1(b) above,

the vested percentage of the Company Contrbution Account to which the

Paricipant is entitled shall be determined in accordance with the following

schedule, based on the n~ber of the Paricipant's Years of Service:

Before 3 Year of Service 50%

After 3 Year of Service 60%

After 4 Yeas of Service 80%

After 5 Years of Service 100%

(d) The portion of a Paricipant's Company Contrbution Account which is not vested

upon his termination of employment with the Affliated Employers under Section

5. 1 (a), (b) or (c) wil become a Forfeiture upon the earlier of the date the

Paricipant (i) incurs five (5) consecutive One Year Breaks in Servce, or (ii)

receives a distribution of the entire amount ofthe then vested portion of his or her

accounts. If a Paricipant who has incured a Forfeitue is subsequently

reemployed by an Affliated Employer before he has five (5) consecutive One

42

MOT-ERISA 3981

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......

Year Breas in Servce, such Paricipant may reay the amount of any distrbution

which he received from his Company Contrbution Account within the five (5)

year penod following the date of his re-employment. Upon such repayment, (1)

the repaid amount plus the amòunt of the pnor Forfeitue (without Interest) shall

be credited to the Paricipant's new Company Contrbution Account, and (2) the

Year of Service, if any, the Paricipant completes following reemployment shall

be aggregated with any pre-Break in Servce Year of Servce for puroses of

deterinig his vested interest in his restored Company Contrbution Account.

Such restoration of Forfeitu shall be made out of Forfeitues occurng in the

Plan Year of such reemployment, or if such Forfeitues are not suffcient, the

Company shall make a special contrbution to the Paricipant's restored Company

Contrbution Account. Any amount so restored to a Paricipant shall not

constitute an Anual Addition under Section 4.3(a). If a Paricipant or fonner

Parcipant is reemployed after he has five (5) consecutive One Year Breaks in

Servce, or ifhe fails to repay th~ amount previously distrbuted to him within five

(5) year following the date of his reemployment, his Year of Serice subsequent_

to such Breaks in Service shall not be taken into account in determinig the vested

portion of his Company Contrbution Account pnor to such reemployment, and

the portion of such account which was forfeited shall not be restored.

(e) The amounts available for distrbution under ths Aricle 5 shall be adjusted to

reflect any outstading loan obligation, as provided in Section 5.5 or in any loan

note or procedure promulgated thereunder.

5.2 Designation of Beneficiaries.

(a) Each Paricipant (including, for purposes of this Section 5.2, any former

Paricipant) may, from time to time, designate any person or persons (who may be

designated contingently or successively and who may be an entity other than a

natural person) as his Beneficiar or Beneficiares to whom the Paricipant's

vested account balances under the Plan are to be paid if he dies before receipt of

all such benefits, in accordance with such rules as the Profit Sharng Committee

shall determne. Each Beneficiar designation must be made in a form acceptable

to the Profit Sharng Committee and will be effective only when filed with it

dunng the Parcipant's lifetime, and only if, in the case of a mared Paricipant,

spousal consent is provided as described in Section 5.2(e) below. Each

43

MOT-ERISA 3982

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.- -')

l

Beneficiar designation filed with the Profit Sharg Committee will cancel all

Beneficiar designations previously filed with it by that Paricipant. The

revocation of a Beneficiar designation, no . - matter how effected, shall not require

the consent of any designated Beneficiar.

(b) The Profit Sharng Commttee may require such proof of death and such evidence

of the right of any pern to receive payment under this Section 5.2 as the Profit

Sharng Commttee may deem advisable. The Profit Sharng Committee's

determination of death and of the right of any person to receive payment under

ths Section 5.2 shall be conclusive.

~)i

(c) If a Parcipant who has designated his spouse as Beneficiar subsequently is

divorced from such spuse, unless such Paricipant designates a different

Beneficiar(ies) or remares, the Paricipant shall be conclusively determined to

. have re-:esignated the divorced spouse as Beneficiar, and the divorced spouse

shall remain the Beneficiar notwithstading that such divorced spouse may have.

signed a waiver or release of propert rights with respect to the Parcipant in

connection with the divorce proceedings. Any Beneficiar designation made by

an unared Paricipant shall be automatically revoked upon such Paricipant's

marage. If a Paricipant has not designated a Beneficiar or Beneficiares in the

maner provided herein, or if none of the designated Beneficiares surive the

Paricipant, or if for any reason such designation shall be legally ineffective, then

payment of any distrbution under ths Section 5.2 shall be made in the followig

prionty:

(i) to the Paricipant's surviving spouse; or if there be none suriving,

(ii) to the Paricipant's suriving children, in equal shares, or if there be none

suriving,

(iii) to the Paricipant's father and mother, in equal shares if both are surving,

or if only one is surviving, to the one surviving; or if neither is suriving,

(iv) to the Paricipant's estate.

(d) The term spouse or surving spouse means the spouse of the Paricipant;

provided, however, that a former spouse will be treated as the spouse or suriving

spouse to the extent provided under a qualified domestic relations order as

descnbed in Section 414(P) of the Code. The benefit payable to a spouse wil be

44 MOT-ERISA 3983

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"

1

)

reduced to the extent necessar to comply with any qualified domestic relations

order.

(e) The consent of a spouse to the designation of a Beneficiar(ies) other than the

. -

spous by the Paricipant must (i) be in wnting, (ii) acknowledge the effect of the

designation of a Beneficiaries) other than the spouse, and (iii) be witnessed by a

notar public or a Plan reresentative. Consent, if given shall be irevocable.

The designation of a Beneficiar(ies) may not be changed without spousal

consent, uness the consent of the spouse expressly permits desigIations by the

Paricipant without any requirement of fuer consent by the spouse and

acknowledges that the spouse had the nght to limit consent only to a specific

Beneficiar and that the spouse voluntarly elected to relinquish such nght.

5.3 Commencement of Distributions.

ti )

(a) If a Paricipant's employment with the Company is terminated for any reaon and _

the nonforfeitable amount credited to such Paricipant's accounts as of the

Valuation Date coincident with or next following the date of such termination

does not exceed Five Thousand Dollars ($5,000), the Profit Sharg Commttee

shall distnbute to such Paricipant the nonforfeitable amount credited to such

Paricipant's accounts in a single lump sum payment (adjusted as necessar to

reflect the repayment of any outstanding loan balance(s)).

(b) If a Paricipant's employment with the Company is termnated for any reason and

the nonforfeitable ampunt credited to such Paricipant's accounts as of the

Valuation Date coincident with or next following the date of such termination

exceeds Five Thousad Dollar ($5,000), such nonforfeitable amounts (adjusted

as necessar to reflect the repayment of any outstading loan balance(s)) shall be

innediately distrbutable to the Paricipant (or in the case of the Paricipant's

death, to his Beneficiar); provided, however, that no distrbution from the

Paricipant's accounts may be made prior to the date the Parcipant attains age

seventy (70) (other than as a result of death) without obtaining the Paricipant's

consènt to such distrbution, at such time and in such maner as may be required

by the Profit Sharng Connittee in accordance with Section 41l(a)(1l) of the

Code and applicable regulations thereunder. If the Paricipant does not consent to

such distnbution, benefits shall remain in the Trust Fund (subject to reduction due

45

MOT-ERISA 3984

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to Forfeitue) and shall continue to be invested puruant to Section 4.5 and to

receive allocations of Income pursuant to Section 4.2(e). Subject to the following

provisions of ths Section 5.3, such Paricipant's benefits shall be distrbuted to

the Paricipant (or in the case ~f the Paricipant's death, his Beneficiar) as soon

as practicable following the Valuation Date coincident with or next following the

earlier of (i) the Paricipant's (or Beneficiar's) request for such distrbution, or

(ii) the date the Parcipant attains age seventy (70) (or if the Parcipant dies and

his suiving spouse is his Beneficiar, the date the Paricipant would have

attained age seventy (70)).

(c) Unless the Paricipant elects otherwise, distrbution of benefits will begin no later

than the 60th day after the latest of the close of the Plan Year in which:

(i) the Paricipant attins age 65,

(ii) occur the 10t anversar of the year in which the Paricipant

commenced paricipation in the Plan; or

(iii) the Parcipant terminates service with the Company.

) Failure of the Paricipant to submit a request for a distrbution as described in

pargrph (b) above shall be deemed to be an election by the Paricipant to defer

distnbution under this pargrph (c).

(d) Distnbutions shall be determined and paid in accordance with Section 401(a)(9)

of the Code and regulations thereunder, including Treasury Regulation Section

1.401(a)(9)-2 relating to minimum distribution incidental benefit requirements.

The entire interest of a Paricipant shall be distr.buted or begin to be distrbuted

no later than the first day of Apnl of the Plan Year following the Plan Year in

which the Paricipant attains age 70 Yi (the "Required Beginnng Date.") If a

Paricipant's interest is to be distributed in other than a lump sum, the following

rules shall apply on or after the Required Beginning Date:

(i) If the Parcipant continues in service with the Company on or afer the

Required Beginning Date, the Paricipant's benefit shall be distrbuted

over a period not exceeding the life expectancy of the Paricipant or the

joint and last surivor life expectancy of the Paricipant and the

Paricipant's designated Beneficiar. The life expectancies of the

46 MOT-ERISA 3985

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,

)

Parcipant and his spouse may be recalculated anually. Life expectacy

of a non-spouse Beneficiar may not be recalculated. The Profit Shanng

the calculation of installment distrbutions.

Committee may establish uniform and nondiscnminatory rules governing . -

(ii) If the Paricipant dies after distrbution of his interest has begu the

remaining portion of such interest will continue to be distrbuted at leat as

rapidly as under the method of distrbution being used pnor to the

Paricipant's death.

,.

(iii) If the Paricipant dies before distrbution of his or her interest begi,

distrbution of the Parcipant's entire interest shall be completed by

December 31 of the calendar year containing the fifth aniversar of the

Paricipant's death; provided, however, that if any portion of the

Paricipant's interest is payable to or for the benefit of a designated

Beneficiar, then distrbution may be made over a period cerai not.

exceeding the life expectacy of the designated Beneficiar, commencing,

in the case of a non-spouse Beneficiar, not later than December 31 of the

calendar year immediately following the calendar year in which the

Paricipant died, or, if such designated Beneficiar is the Paricipant's

suriving spouse, commencing not later than the later of December 31 of

the calendar year immediately following the calendar year in which the

Parcipant died or December 31 of the calendar year in which the

Paricipant would have attained age 70.

(iv) If the Paricipant's or Beneficiar's benefit is distrbuted in the form of a

Qualified Anuity, distnbutions thereunder shall be made in accordance

with the requirements of Section 401 (a)(9) of the Code and the regulations

thereunder

5.4 Method of Payment of Distribution.

(a) A Paricipant, former Paricipant, his spouse or his Beneficiar(ies), as the case

may be, entitled to receive a distrbution under this Aricle 5 may elect that such

distrbution be made by one or more of the following methods, in such form and

at such times as the Profit Shanng Committee shall determine; provided, however,

47

MOT -ERISA 3986

Case: 1:03-cv-05044 Document #: 333-3 Filed: 02/15/08 Page 52 of 52 PageID #:3397