Document:

exv10w31

 

Exhibit 10.31

2005 Motorola Incentive Plan

as amended through May 2, 2005

Overview

The 2005 Motorola Incentive Plan (the “Plan”) has been established to retain employees through
competitive rewards, attract premier talent, align individual efforts with business goals, and
reward employees for strong business performance. The Plan is based on successive calendar-year
performance periods commencing 1 January 2005 (each a “Plan Year”). The Plan is being implemented
pursuant to the terms and conditions of the Omnibus Incentive Plan of 2003 (“Omnibus Plan”).

Eligibility

To be eligible to participate in this Plan, an employee must be:

	•  	A full-time or part-time Motorola employee;

	 
	•  	In a Participating Organization and on the payroll of a Participating Country;
	 
	•  	Not a participant in any other annual group incentive or bonus plan (e.g., sales commission plans, etc.); and
	 
	•  	One of the following must also apply:

	 	•  	Active on a Motorola payroll as of the end of the Plan Year (countries may establish
more restrictive eligibility requirements for terminating employees);
	 
	 	•  	On an approved leave of absence as of the end of the Plan Year, which leave carries
a right to return to work at the end of the leave (“Leave of Absence”);
	 
	 	•  	Retired from Motorola during the Plan Year while actively employed or from a Leave of Absence; or
	 
	 	•  	Deceased during the Plan Year while actively employed or on a Leave of Absence.

Award Calculation

Awards will be calculated and paid after the close of each Plan Year on which the awards are based.
The award amount will be based on Eligible Earnings, the Target Award %, and the Business and
Individual Performance Factors, as follows:

	 	 	 	 	 
	

	 	Business
	 	Individual
	Award = Eligible Earnings x Target Award % x  
	 	Performance x  
	 	Performance
	

	 	Factor
	 	Factor

Eligible Earnings is defined below. Target Award %’s, Business Performance Factors and Individual
Performance Factors for each Plan Year shall be determined by the Compensation and Leadership
Committee of the Board of Directors (the “Compensation Committee”). Business Performance Factors
shall be based on Operating Earnings, Operating Cash Flow, Revenue Growth, Quality and such other
factors as may be determined by the Compensation Committee. Business Performance Factors for
Motorola elected officers shall be based solely on the performance of Motorola, Inc.

Payout Process

	•  	All earned awards will be paid in cash. Payment will be made as soon as administratively practicable following the close of a Plan Year.
	 
	•  	A participant shall have no right to any award until that award is paid.
	 
	•  	If the Compensation Committee determines, in its sole discretion, that a participant has engaged in any activity at any time, prior to
the payment of an award, that the committee determined was, is or will be harmful to the Company, the participant will forfeit any unpaid
award.

Administration

	•  	The Compensation Committee has the responsibility for this Plan and may delegate to the MIP Plan Committee (the “MIP Committee”) the
authority to manage, administer and interpret the terms of the Plan and such other responsibilities specifically delegated to the MIP
Committee by the Compensation Committee . Unless otherwise determined, the MIP Committee will consist of the Senior Human Resources
Officer, a senior Compensation Officer, and a senior Finance Officer.
	 
	•  	Any claims for payments under the Plan or any other matter relating to the Plan must be presented in writing to the MIP Committee within
60 days after the event that is the subject of the claim. The MIP Committee will then provide a response within 60 days, which response
shall be final and binding.

2005 Motorola Incentive Plan

 

 

General Provisions

	•  	Awards are subject to all applicable withholding taxes and other required deductions.
	 
	•  	The Plan will not be available to employees subject to the laws of any jurisdiction which prohibits any provisions of this Plan or in
which tax or other business considerations make participation impracticable in the judgment of the MIP Committee.
	 
	•  	This Plan does not constitute a guarantee of employment nor does it restrict Motorola’s rights to terminate employment at any time or for
any reason.
	 
	•  	The Plan and any individual award is offered as a gratuitous award at the sole discretion of Motorola. The Plan does not create vested
rights of any nature nor does it constitute a contract of employment or a contract of any other kind. The Plan does not create any
customary concession or privilege to which there is any entitlement from year-to-year, except to the extent required under applicable
law. Nothing in the Plan entitles an employee to any remuneration or benefits not set forth in the Plan nor does it restrict Motorola’s
rights to increase or decrease the compensation of any employee, except as otherwise required under applicable law.
	 
	•  	Except as explicitly provided by law, the awards shall not become a part of any employment condition, regular salary, remuneration
package, contract or agreement, but shall remain gratuitous in all respects. Awards are not to be taken into account for determining
overtime pay, severance pay, termination pay, pay in lieu of notice, or any other form of pay or compensation.
	 
	•  	Except as explicitly provided by law, this Plan is provided at Motorola’s sole discretion and Motorola may modify or terminate it at any
time, prospectively or retroactively, without notice or obligation. In addition, there is no obligation to extend the Plan or establish
a replacement plan in subsequent years.
	 
	•  	The Plan shall not be funded in any way. Motorola shall not be required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of awards. To the extent any person acquires a right to receive payment under the Plan, such
right will be no greater than the right of an unsecured general creditor of the Company.
	 
	•  	Since employee retention is an important objective of this Plan and awards do not bear a precise arithmetic relationship to time worked
within the calendar year or length of service with Motorola, employees who separate from employment (payroll) prior to the end of the
Plan Year other than death or retirement shall not receive a pro rata award.
	 
	•  	In the event an employee remains on payroll as an active employee at the end of a plan year, but is not actually working, whether or not
on a Leave of Absence, the employee will be entitled to a pro rata award based on the number of completed months within the plan year in
which the participant was actually working, provided that the employee is otherwise eligible for an award. In the event an employee
retires from Motorola during the plan year, but is not actually working for a period preceding the retirement date, whether or not on a
Leave of Absence, the employee will be entitled to a pro rata award based on the number of completed months within the plan year in which
the participant was actually working, provided that the employee is otherwise eligible for an award.
	 
	•  	The award for an employee who has died prior to the end of the Plan Year while actively employed or on a Leave of Absence will be paid to
the decedent’s estate. The award for an employee who died during the plan year will be pro-rated based on the number of completed months
of active employment during the plan year.
	 
	•  	Awards for transferred, promoted or demoted employees will be calculated using the:

	 	•  	Target Award % applicable to the employee’s country and grade at the end of the Plan Year
	 
	 	•  	Business Performance Factor prorated for the portion of the year the participant was
in different Participating Organizations during the Plan Year.
	 

	•  	Award opportunities may not be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent and distribution.

Definitions

Eligible Earnings: The MIP Committee will determine Eligible Earnings for each country, consistent
with their respective legal and practical requirements. The MIP Committee may determine inclusions
and exclusions from Eligible Earnings as it deems appropriate and may vary its determinations by
country.

Employee: a person in an employee-employer relationship with the Company whose base wage or base
salary is processed for payment by the Company’s Payroll Department(s) and not by any other
department of the Company (or by any other company). Does not include:

	•  	Any independent contractor, consultant, or individual performing services for the Company who has entered into an
independent contractor or consultant agreement;
	 
	•  	Any individual performing services under an independent contractor or consultant agreement, a purchase order, a
supplier agreement or any other agreement that the Company enters into for services;

2005 Motorola Incentive Plan

 

 

	•  	Any person classified by the Company as a temporary or contract labor (such as black badges, brown badges, contractors,
contract employees, job shoppers) regardless of the length of service; and
	 
	•  	Any “leased employee” as defined in Section 414(n) of the U.S. Internal Revenue Code of 1986, as amended.

Retired: This Plan utilizes the definition of “retiree” that appears in the primary retirement
plan covering the employee.

Operating Earnings: calculated according to GAAP, excluding one-time events called out in earnings
releases, such as restructuring activities and sales of marketable securities.

Operating Cash Flow: calculated according to GAAP, excluding gains on sales of investments and
securities.

Revenue Growth: calculated as the year-over-year percentage increase in net sales after discounts
according to GAAP, adjusted for the impact of mergers, acquisitions, and divestitures in excess of
$50 million.

Quality: combination of measures of customer satisfaction, reliability, and cost of poor quality,
as defined by Motorola senior leaders.

If a term is used in the Plan, but not defined, it has the meaning given such term in the Omnibus
Plan.

Applicable Law

To the extent not preempted by federal law, or otherwise provided by local law, the Plan will be
construed in accordance with, and governed by, the laws of the state of Illinois without giving
effect to the principles of conflicts of laws.

2005 Motorola Incentive Planexv10w46

 

Exhibit 10.46

MOTOROLA, INC.

AWARD DOCUMENT

For the

Motorola Omnibus Incentive Plan of 2003

Terms and Conditions Related to Employee Nonqualified Stock Options

	 	 	 	 	 	 	 
	Recipient:

	 	 	 	Date of Expiration:	 	 
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Commerce ID#:

	 	 	 	Number of Options:	 	 
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date of Grant:

	 	 	 	Exercise Price:	 	 
	

	 	 
	 	 	 	 

Motorola, Inc. (“Motorola”) is pleased to grant you options to purchase shares of Motorola’s common
stock under the Motorola Omnibus Incentive Plan of 2003 (the “Plan”). The number of options
(“Options”) awarded to you and the Exercise Price per Option, which is the Fair Market Value on the
Date of Grant, are stated above. Each Option entitles you to purchase one share of Motorola’s
common stock on the terms described below and in the Plan.

Vesting and Exercisability

You cannot exercise the Options until they have vested.

Regular Vesting - The Options will vest in accordance with the following schedule (subject to the
other terms hereof):

	 	 	 
	Percent	 	Date
	25%

	 	___  ___, 200___
	25%

	 	___  ___, 200___
	25%

	 	___  ___, 200___
	25%

	 	___  ___, 200___

Special Vesting - You may be subject to the Special Vesting Dates described below if your
employment or service with Motorola or a Subsidiary (as defined below) terminates.

Exercisability - You may exercise Options at any time after they vest and before they expire as
described below.

Expiration

All Options expire on the earlier of (1) the Date of Expiration as stated above or (2) any of the
Special Expiration Dates described below. Once an Option expires, you no longer have the right to
exercise it.

Special Vesting Dates and Special Expiration Dates

There are events that cause your Options to vest sooner than the schedule discussed above or to
expire sooner than the Date of Expiration as stated above. Those events are as follows:

Retirement - If your employment or service with Motorola or a Subsidiary is ended because of your
Retirement, all of your unvested Options will automatically expire upon your Retirement. All your
vested Options will then expire on the earlier of (i) the date ninety (90) days after your
Retirement or (ii) the Date of Expiration stated above. Retirement means (only for purposes of
this Option) your retirement from Motorola or a Subsidiary as follows:

	 	(i)  	Retiring at or after age 55 with 20 years of service;
	 
	 	(ii)  	Retiring at or after age 60 with 10 years of service;
	 
	 	(iii)  	Retiring at or after age 65, without regard to years of service.

Disability - If your employment or service with Motorola or a Subsidiary is terminated because of
your Total and Permanent Disability (as defined below), Options that are not vested will
automatically become fully vested upon your termination of employment or service. All your Options
will then

 

 

expire on the earlier of the first anniversary of your termination of employment or service because
of your Total and Permanent Disability or the Date of Expiration stated above. Until that time,
the Options will be exercisable by you or your guardian or legal representative.

Death - If your employment or service with Motorola or a Subsidiary is terminated because of your
death, Options that are not vested will automatically become fully vested upon your death. All
your Options will then expire on the earlier of the first anniversary of your death or the Date of
Expiration stated above. Until that time, with written proof of death and inheritance, the Options
will be exercisable by your legal representative, legatees or distributees.

Change In Control - If there is a Change In Control of Motorola (as defined in the Plan), all the
unvested Options will automatically become fully vested as described in the Plan. If Motorola or a
Subsidiary terminates your employment or service other than for Serious Misconduct within two years
of consummation of a Change In Control, all of your vested Options will be exercisable until the
Date of Expiration stated above.

Termination of Employment or Service Because of Serious Misconduct - If Motorola or a Subsidiary
terminates your employment or service because of Serious Misconduct (as defined below) all of your
Options (vested and unvested) expire upon your termination.

Change in Employment in Connection with a Divestiture - If you accept employment with another
company in direct connection with the sale, lease, outsourcing arrangement or any other type of
asset transfer or transfer of any portion of a facility or any portion of a discrete organizational
unit of Motorola or a Subsidiary (a “Divestiture”), all of your unvested Options will automatically
expire upon termination in direct connection with a Divestiture and your vested Options will expire
90 days after such Divestiture or such shorter period remaining until expiration as set forth
above.

Termination of Employment or Service by Motorola or a Subsidiary Other than for Serious Misconduct
or a Divestiture- If Motorola or a Subsidiary on its initiative, terminates your employment or
service other than for Serious Misconduct or a Divestiture, all of your unvested Options will
automatically expire upon termination and your vested Options will expire 90 days after your
termination of employment or such shorter period remaining until expiration as set forth above.

Termination of Employment or Service for any Other Reason than Described Above - If your employment
or service with Motorola or a Subsidiary terminates for any reason other than that described above,
including voluntary resignation of your employment or service, all of your unvested Options will
automatically expire upon termination of your employment or service and all of your vested but not
yet exercised Options will expire on the earlier of (i) the date ninety (90) days after the date
of termination of your employment or service or (ii) the Date of Expiration stated above.

Leave of Absence/Temporary Layoff

If you take a Leave of Absence from Motorola or a Subsidiary that your employer has approved in
writing in accordance with your employer’s Leave of Absence Policy and which does not constitute a
termination of employment as determined by Motorola, or you are placed on Temporary Layoff (as
defined below) by Motorola or a Subsidiary the following will apply:

Vesting of Options - Options will continue to vest in accordance with the vesting schedule set
forth above.

Exercising Options - You may exercise Options that are vested or that vest during the leave of
absence or layoff.

Effect of Termination of Employment or Service - If your employment or service is terminated during
the Leave of Absence or Temporary Layoff, the treatment of your Options will be determined as
described under “Special Vesting Dates and Special Expiration Dates” above.

Other Terms

Method of Exercising — You must follow the procedures for exercising options established by
Motorola from time to time. At the time of exercise, you must pay the Exercise Price for all of
the Options being exercised and any taxes that are required to be withheld by Motorola or a
Subsidiary in connection with the exercise. Options may not be exercised for less than 50 shares
unless the number of shares represented by the Option is less than 50 shares, in which case the
Option must be exercised for the remaining amount.

 

 

Transferability — Unless the Committee provides, Options are not transferable other than by will or
the laws of descent and distribution.

Tax Withholding — Motorola or a Subsidiary is entitled to withhold an amount equal to the required
minimum statutory withholding taxes for the respective tax jurisdictions attributable to any share
of common stock deliverable in connection with the exercise of the Options. You may satisfy
any withholding obligation in whole or in part by electing to have Motorola retain Option
shares having a Fair Market Value on the date of exercise equal to the minimum amount required to
be withheld.

Definition of Terms

If a term is used but not defined, it has the meaning given such term in the Plan.

“Fair Market Value” is the closing price for a share of Motorola common stock on the last trading
day before the date of grant or date of exercise, whichever is applicable. The official source for
the closing price is the New York Stock Exchange Composite Transaction as reported in the Wall
Street Journal, Midwest edition.

“Serious Misconduct” means any misconduct identified as a ground for termination in the Motorola
Code of Business Conduct, or the human resources policies, or other written policies or procedures.

“Subsidiary” means an entity of which Motorola owns directly or indirectly at least 50% and that
Motorola consolidates for financial reporting purposes.

“Total and Permanent Disability” means for (x) U.S. employees, entitlement to long-term disability
benefits under the Motorola Disability Income Plan, as amended and any successor plan or a
determination of a permanent and total disability under a state workers compensation statute and
(y) non-U.S. employees, as established by applicable Motorola policy or as required by local
regulations.

“Temporary Layoff” means a layoff or redundancy that is communicated as being for a period of up to
twelve months and as including a right to recall under defined circumstances.

Consent to Transfer Personal Data

By accepting this award, you voluntarily acknowledge and consent to the collection, use, processing
and transfer of personal data as described in this paragraph. You are not obliged to consent to
such collection, use, processing and transfer of personal data. However, failure to provide the
consent may affect your ability to participate in the Plan. Motorola, its Subsidiaries and your
employer hold certain personal information about you, that may include your name, home address and
telephone number, date of birth, social security number or other employee identification number,
salary, salary grade, hire date, nationality, job title, any shares of stock held in Motorola, or
details of all options or any other entitlement to shares of stock awarded, canceled, purchased,
vested, or unvested, for the purpose of managing and administering the Plan (“Data”). Motorola
and/or its Subsidiaries will transfer Data amongst themselves as necessary for the purpose of
implementation, administration and management of your participation in the Plan, and Motorola
and/or any of its Subsidiaries may each further transfer Data to any third parties assisting
Motorola in the implementation, administration and management of the Plan. These recipients may be
located throughout the world, including the United States. You authorize them to receive, possess,
use, retain and transfer the Data, in electronic or other form, for the purposes of implementing,
administering and managing your participation in the Plan, including any requisite transfer of such
Data as may be required for the administration of the Plan and/or the subsequent holding of shares
of stock on your behalf to a broker or other third party with whom you may elect to deposit any
shares of stock acquired pursuant to the Plan. You may, at any time, review Data, require any
necessary amendments to it or withdraw the consents herein in writing by contacting Motorola;
however, withdrawing your consent may affect your ability to participate in the Plan.

Acknowledgement of Discretionary Nature of the Plan; No Vested Rights

You acknowledge and agree that the Plan is discretionary in nature and limited in duration, and may
be amended, cancelled, or terminated by Motorola or a Subsidiary, in its sole discretion, at any
time. The grant of awards under the Plan is a one-time benefit and does not create any contractual
or other right to receive an award in the future. Future grants, if any, will be at the sole
discretion of Motorola, including, but not limited to, the timing of any grant, the amount of the
award, vesting provisions, and the exercise price.

Agreement Following Termination of Employment

As a further condition of accepting the Options, you acknowledge and agree that for a period of two
years

 

 

following your termination of employment or service, you will not recruit, solicit or induce, or
cause, allow, permit or aid others to recruit, solicit or induce, or to communicate in support of
those activities, any employee of Motorola or a Subsidiary to terminate his/her employment with
Motorola or a Subsidiary and/or to seek employment with your new or prospective employer, or any
other company.

You agree that upon termination of employment with Motorola or a Subsidiary, you will immediately
inform Motorola of (i) the identity of your new employer (or the nature of any start-up business or
self-employment), (ii) your new title, and (iii) your job duties and responsibilities. You hereby
authorize Motorola or a Subsidiary to provide a copy of this Award Document to your new employer.
You further agree to provide information to Motorola or a Subsidiary as may from time to time be
requested in order to determine your compliance with the terms hereof.

Substitute Stock Appreciation Right

Motorola reserves the right to substitute a Stock Appreciation Right for your Option in the event
certain changes are made in the accounting treatment of stock options. Any substitute Stock
Appreciation Right shall be applicable to the same number of shares as your Option and shall have
the same Date of Expiration, Exercise Price, and other terms and conditions. Any substitute Stock
Appreciation Right may be settled only in Common Stock.

Acceptance of Terms and Conditions

By accepting the Options, you agree to be bound by these terms and conditions, the Plan and any and
all rules and regulations established by Motorola in connection with awards issued under the Plan.

Other Information about Your Options and the Plan

You can find other information about options and the Plan on the Motorola website
http://myhr.mot.com/finances/stock_options/index.jsp If you do not have access to the website,
please contact Motorola Global Rewards, 1303 E. Algonquin Road, Schaumburg, IL 60196 USA;
GBLRW01@Motorola.com; 847-576-7885; for an order form to request Plan documents.

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