Document:

EX-10.7

Exhibit 10.7

MOTOROLA OMNIBUS INCENTIVE PLAN OF 2002

(as amended through May 4, 2009)

     1. Purpose. The purposes of the Motorola Omnibus Incentive Plan of 2002 (the “Plan”)
are (i) to encourage outstanding individuals to accept or continue employment with Motorola, Inc.
(“Motorola” or the “Company”) and its subsidiaries or to serve as directors of Motorola, and (ii)
to furnish maximum incentive to those persons to improve operations and increase profits and to
strengthen the mutuality of interest between those persons and Motorola’s stockholders by providing
them stock options and other stock and cash incentives.

     2. Administration. The Plan will be administered by a Committee (the “Committee”) of
the Motorola Board of Directors consisting of two or more directors as the Board may designate from
time to time, each of whom shall qualify as a “Non-Employee Director” within the meaning set forth
in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) or any successor legislation. The Committee shall have the authority to construe and
interpret the Plan and any benefits granted thereunder, to establish and amend rules for Plan
administration, to change the terms and conditions of options and other benefits at or after grant,
and to make all other determinations which it deems necessary or advisable for the administration
of the Plan. The determinations of the Committee shall be made in accordance with their judgment
as to the best interests of Motorola and its stockholders and in accordance with the purposes of
the Plan. A majority of the members of the Committee shall constitute a quorum, and all
determinations of the Committee shall be made by a majority of its members. Any determination of
the Committee under the Plan may be made without notice or meeting of the Committee, in writing
signed by all the Committee members. The Committee may delegate the administration of the Plan, in
whole or in part, on such terms and conditions as it may impose, to such other person or persons as
it may determine in its discretion, except with respect to benefits to officers subject to Section
16 of the Exchange Act or officers who are or may be “covered employees” within the meaning of
Section 162(m) of the Internal Revenue Code (“Covered Employees”).

     3. Participants. Participants may consist of all employees of Motorola and its
subsidiaries and all Non-Employee Directors of Motorola. Any corporation or other entity in which
a 50% or greater interest is at the time directly or indirectly owned by Motorola shall be a
subsidiary for purposes of the Plan. Designation of a participant in any year shall not require
the Committee to designate that person to receive a benefit in any other year or to receive the
same type or amount of benefit as granted to the participant in any other year or as granted to any
other participant in any year. The Committee shall consider all factors that it deems relevant in
selecting participants and in determining the type and amount of their respective benefits.

     4. Shares Available under the Plan. There is hereby reserved for issuance under the
Plan an aggregate of 45 million shares of Motorola common stock. If there is (i) a lapse,
expiration, termination or cancellation of any stock option or other benefit prior to the issuance
of shares thereunder or (ii) a forfeiture of any shares of restricted stock or shares subject to
stock awards prior to vesting, the shares subject to these options or other benefits shall be added
to the shares available for benefits under the Plan. Shares covered by a Benefit granted under the
Plan

 

 

shall not be counted as used unless and until they are actually issued and delivered to a
Participant. In addition, any shares retained by Motorola pursuant to a participant’s tax
withholding election (other than shares used to satisfy any tax obligation upon the vesting of
restricted stock or other stock awards), and any shares covered by a benefit which is settled in
cash, shall be added to the shares available for benefits under the Plan. All shares issued under
the Plan may be either authorized and unissued shares or issued shares reacquired by Motorola.
Under the plan, no participant may receive in any calendar year (i) Stock Options relating to more
than 3,000,000 shares, (ii) Restricted Stock or Restricted Stock Units that are subject to the
attainment of Performance Goals of Section 13 hereof relating to more than 300,000 shares, (iii)
Stock Appreciation Rights relating to more than 3,000,000 shares, or (iv) Performance Shares
relating to more than 300,000 shares. The shares reserved for issuance and the limitations set
forth above shall be subject to adjustment in accordance with Section 15 hereof. All of the
available shares may, but need not, be issued pursuant to the exercise of incentive stock options.
Notwithstanding anything else contained in this Section 4 the number of shares that may be issued
under the Plan for benefits other than stock options shall not exceed a total of 5,000,000 shares
(subject to adjustment in accordance with Section 15 hereof.

     5. Types of Benefits. Benefits under the Plan shall consist of Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Stock, Performance
Units, Annual Management Incentive Awards and Other Stock or Cash Awards, all as described below.

     6. Stock Options. Subject to the terms of the Plan, Stock Options may be granted to
participants, at any time as determined by the Committee. The Committee shall determine the number
of shares subject to each option and whether the option is an Incentive Stock Option. The option
price for each option shall be determined by the Committee but shall not be less than 100% of the
fair market value of Motorola’s common stock on the date the option is granted. Each option shall
expire at such time as the Committee shall determine at the time of grant. Options shall be
exercisable at such time and subject to such terms and conditions as the Committee shall determine;
provided, however, that no option shall be exercisable later than the tenth anniversary of its
grant. The option price, upon exercise of any option, shall be payable to Motorola in full by (a)
cash payment or its equivalent, (b) tendering previously acquired shares (held for at least six
months) having a fair market value at the time of exercise equal to the option price or
certification of ownership of such previously-acquired shares, (c) delivery of a properly executed
exercise notice, together with irrevocable instructions to a broker to promptly deliver to Motorola
the amount of sale proceeds from the option shares or loan proceeds to pay the exercise price and
any withholding taxes due to Motorola, and (d) such other methods of payment as the Committee, at
its discretion, deems appropriate. Notwithstanding any other provision of the Plan to the
contrary, upon approval of the Company’s stockholders, the Committee may provide for, and the
Company may implement, a one time only option exchange offer, pursuant to which certain outstanding
Stock Options could, at the election of the person holding such Stock Option, be tendered to the
Company for cancellation in exchange for the issuance of a lesser amount of Stock Options with a
lower exercise price or other equity benefit as approved by the Committee, provided that such one
time only option exchange offer is implemented within twelve months of the date of such stockholder
approval.

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     7. Stock Appreciation Rights. Stock Appreciation Rights (“SARs”) may be granted to
participants at any time as determined by the Committee. An SAR may be granted in tandem with a
Stock Option granted under this Plan or on a free-standing basis. The Committee also may, in its
discretion, substitute SARs which can be settled only in stock for outstanding Stock Options
granted after May 5, 2003, at any time when the Company is subject to fair value accounting. The
grant price of a tandem or substitute SAR shall be equal to the option price of the related option.
The grant price of a free-standing SAR shall be equal to the fair market value of Motorola’s
common stock on the date of its grant. An SAR may be exercised upon such terms and conditions and
for the term as the Committee in its sole discretion determines; provided, however, that the term
shall not exceed the option term in the case of a tandem or substitute SAR or ten years in the case
of a free-standing SAR and the terms and conditions applicable to a substitute SAR shall be
substantially the same as those applicable to the Stock Option which it replaces. Upon exercise of
an SAR, the participant shall be entitled to receive payment from Motorola in an amount determined
by multiplying the excess of the fair market value of a share of common stock on the date of
exercise over the grant price of the SAR by the number of shares with respect to which the SAR is
exercised. The payment may be made in cash or stock, at the discretion of the Committee, except in
the case of a substitute SAR which may be made only in stock.

     8. Restricted Stock and Restricted Stock Units. Subject to the terms of the Plan,
Restricted Stock and Restricted Stock Units may be awarded or sold to participants under such terms
and conditions as shall be established by the Committee. Restricted Stock and Restricted Stock
Units shall be subject to such restrictions as the Committee determines, including, without
limitation, any of the following:

(a) a prohibition against sale, assignment, transfer, pledge, hypothecation or other
encumbrance for a specified period; or

(b) a requirement that the holder forfeit (or in the case of shares or units sold to
the participant resell to Motorola at cost) such shares or units in the event of
termination of employment during the period of restriction.

All restrictions shall expire at such times as the Committee shall specify.

     9. Performance Stock. Subject to the terms of the Plan, the Committee shall designate
the participants to whom long-term performance stock (“Performance Stock”) is to be awarded and
determine the number of shares, the length of the performance period and the other terms and
conditions of each such award. Each award of Performance Stock shall entitle the participant to a
payment in the form of shares of common stock upon the attainment of performance goals and other
terms and conditions specified by the Committee.

          Notwithstanding satisfaction of any performance goals, the number of shares issued under a
Performance Stock award may be adjusted by the Committee on the basis of such further consideration
as the Committee in its sole discretion shall determine. However, the Committee may not, in any
event, increase the number of shares earned upon satisfaction of any performance goal by any
participant who is a Covered Employee. The Committee may, in its discretion, make a cash payment
equal to the fair market value of shares of common stock otherwise required to be issued to a
participant pursuant to a Performance Stock award.

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     10. Performance Units. Subject to the terms of the Plan, the Committee shall
designate the participants to whom long-term performance units (“Performance Units”) are to be
awarded and determine the number of units and the terms and conditions of each such award. Each
Performance Unit award shall entitle the participant to a payment in cash upon the attainment of
performance goals and other terms and conditions specified by the Committee.

          Notwithstanding the satisfaction of any performance goals, the amount to be paid under a
Performance Unit award may be adjusted by the Committee on the basis of such further consideration
as the Committee in its sole discretion shall determine. However, the Committee may not, in any
event, increase the amount earned under Performance Unit awards upon satisfaction of any
performance goal by any participant who is a Covered Employee and the maximum amount earned by a
Covered Employee in any calendar year may not exceed $5,000,000. The Committee may, in its
discretion, substitute actual shares of common stock for the cash payment otherwise required to be
made to a participant pursuant to a Performance Unit award.

     11. Annual Management Incentive Awards. The Committee may designate Motorola
executive officers who are eligible to receive a monetary payment in any calendar year based on a
percentage of an incentive pool equal to 5% of Motorola’s consolidated operating earnings for the
calendar year. The Committee shall allocate an incentive pool percentage to each designated
participant for each calendar year. In no event may the incentive pool percentage for any one
participant exceed 30% of the total pool. Consolidated operating earnings shall mean the
consolidated earnings before income taxes of the Company, computed in accordance with generally
accepted accounting principles, but shall exclude the effects of Extraordinary Items.
Extraordinary Items shall mean (i) extraordinary, unusual and/or non-recurring items of gain or
loss (ii) gains or losses on the disposition of a business, (iii) changes in tax or accounting
regulations or laws, or (iv) the effect of a merger or acquisition, all of which must be identified
in the audited financial statements, including footnotes, or the Management Discussion and Analysis
section of the Company’s annual report.

          As soon as possible after the determination of the incentive pool for a Plan year, the
Committee shall calculate the participant’s allocated portion of the incentive pool based upon the
percentage established at the beginning of the calendar year. The participant’s incentive award
then shall be determined by the Committee based on the participant’s allocated portion of the
incentive pool subject to adjustment in the sole discretion of the Committee. In no event may the
portion of the incentive pool allocated to a participant who is a Covered Employee be increased in
any way, including as a result of the reduction of any other participant’s allocated portion.

     12. Other Stock or Cash Awards. In addition to the incentives described in sections 6
through 11 above, and subject to the terms of the Plan, the Committee may grant other incentives
payable in cash or in common stock under the Plan as it determines to be in the best interests of
Motorola and subject to such other terms and conditions as it deems appropriate.

     13. Performance Goals. Awards of Restricted Stock, Restricted Stock Units,
Performance Stock, Performance Units and other incentives under the Plan may be made subject to the
attainment of performance goals relating to one or more business criteria within the meaning of
Section 162(m) of the Internal Revenue Code, including, but not limited to, cash

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flow; cost; ratio of debt to debt plus equity; profit before tax; earnings before interest and
taxes; earnings before interest, taxes, depreciation and amortization; earnings per share;
operating earnings; economic value added; ratio of operating earnings to capital spending; free
cash flow; net profit; net sales; price of Motorola common stock; return on net assets, equity or
stockholders’ equity; market share; or total return to shareholders (“Performance Criteria”). Any
Performance Criteria may be used to measure the performance of the Company as a whole or any
business unit of the Company. Any Performance Criteria may include or exclude Extraordinary Items.
Performance Criteria shall be calculated in accordance with the Company’s financial statements,
generally accepted accounting principles, or under a methodology established by the Committee prior
to the issuance of an award which is consistently applied and identified in the audited financial
statements, including footnotes, or the Management Discussion and Analysis section of the Company’s
annual report. However, the Committee may not in any event increase the amount of compensation
payable to a Covered Employee upon the attainment of a performance goal.

     14. Change in Control. Except as otherwise determined by the Committee at the time of
grant of an award, upon a Change in Control of Motorola, all outstanding Stock Options and SARs
shall become vested and exercisable; all restrictions on Restricted Stock and Restricted Stock
Units shall lapse; all performance goals shall be deemed achieved at target levels and all other
terms and conditions met; all Performance Stock shall be delivered; all Performance Units and
Restricted Stock Units shall be paid out as promptly as practicable; all Annual Management
Incentive Awards shall be paid out based on the consolidated operating earnings of the immediately
preceding year or such other method of payment as may be determined by the Committee at the time of
award or thereafter but prior to the Change in Control; and all Other Stock or Cash Awards shall be
delivered or paid. A “Change in Control” shall mean:

     A Change in Control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act, or any successor provision thereto, whether or not Motorola is then
subject to such reporting requirement; provided that, without limitation, such a
Change in Control shall be deemed to have occurred if (a) any “person” or “group”
(as such terms are used in Section 13(d) and 14(d) of the Exchange Act) is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Motorola representing 20% or more of the
combined voting power of Motorola’s then outstanding securities (other than Motorola
or any employee benefit plan of Motorola; and, for purposes of the Plan, no Change
in Control shall be deemed to have occurred as a result of the “beneficial
ownership,” or changes therein, of Motorola’s securities by either of the
foregoing), (b) there shall be consummated (i) any consolidation or merger of
Motorola in which Motorola is not the surviving or continuing corporation or
pursuant to which shares of common stock would be converted into or exchanged for
cash, securities or other property, other than a merger of Motorola in which the
holders of common stock immediately prior to the merger have, directly or
indirectly, at least a 65% ownership interest in the outstanding common stock of the
surviving corporation immediately after the merger, or (ii) any sale, lease,
exchange or other transfer (in one transaction or a series of related transactions)
of all, or substantially all, of the assets of Motorola other than any such
transaction

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with entities in which the holders of Motorola Common Stock, directly or indirectly,
have at least a 65% ownership interest, (c) the stockholders of Motorola approve any
plan or proposal for the liquidation or dissolution of Motorola, or (d) as the
result of, or in connection with, any cash tender offer, exchange offer, merger or
other business combination, sale of assets, proxy or consent solicitation (other
than by the Board), contested election or substantial stock accumulation (a “Control
Transaction”), the members of the Board immediately prior to the first public
announcement relating to such Control Transaction shall thereafter cease to
constitute a majority of the Board

     15. Adjustment Provisions.

          (a) If Motorola shall at any time change the number of issued shares of common stock by stock
dividend, stock split, spin-off, split-off, spin-out, recapitalization, merger, consolidation,
reorganization, combination, or exchange of shares, the total number of shares reserved for
issuance under the Plan, the maximum number of shares which may be made subject to an award in any
calendar year, and the number of shares covered by each outstanding award and the price therefor,
if any, shall be equitably adjusted by the Committee, in its sole discretion.

          (b) Subject to the provisions of Section 14, the Board of Directors or the Committee may
authorize the issuance or assumption of benefits under this Plan in connection with any merger,
consolidation, acquisition of property or stock, or reorganization upon such terms and conditions
as it may deem appropriate.

          (c) In the event of any merger, consolidation or reorganization of Motorola with or into
another corporation, other than a merger, consolidation or reorganization in which Motorola is the
continuing corporation and which does not result in the outstanding common stock being converted
into or exchanged for different securities, cash or other property, or any combination thereof,
there shall be substituted, on an equitable basis as determined by the Committee in its discretion,
for each share of common stock then subject to a benefit granted under the Plan, the number and
kind of shares of stock, other securities, cash or other property to which holders of common stock
of Motorola will be entitled pursuant to the transaction.

     16. Nontransferability. Each benefit granted under the Plan shall not be transferable
otherwise than by will or the laws of descent and distribution and each Stock Option and SAR shall
be exercisable during the participant’s lifetime only by the participant or, in the event of
disability, by the participant’s personal representative. In the event of the death of a
participant, exercise of any benefit or payment with respect to any benefit shall be made only by
or to the executor or administrator of the estate of the deceased participant or the person or
persons to whom the deceased participant’s rights under the benefit shall pass by will or the laws
of descent and distribution. Notwithstanding the foregoing, at its discretion, the Committee may
permit the transfer of a Stock Option by the participant, subject to such terms and conditions as
may be established by the Committee.

     17. Taxes. Motorola shall be entitled to withhold the amount of any tax attributable
to any amounts payable or shares deliverable under the Plan, after giving the person entitled to
receive such payment or delivery notice and Motorola may defer making payment or delivery as

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to any award, if any such tax is payable until indemnified to its satisfaction. A participant
may pay all or a portion of any required withholding taxes arising in connection with the exercise
of a Stock Option or SAR or the receipt or vesting of shares hereunder by electing to have Motorola
withhold shares of common stock, having a fair market value equal to the amount required to be
withheld.

     18. Duration, Amendment and Termination. No Incentive Stock Option shall be granted
more than ten years after the date of adoption of this Plan by the Board of Directors; provided,
however, that the terms and conditions applicable to any benefit granted on or before such date may
thereafter be amended or modified by mutual agreement between Motorola and the participant, or such
other person as may then have an interest therein. The Board of Directors or the Committee may
amend the Plan from time to time or terminate the Plan at any time. However, no such action shall
reduce the amount of any existing award or change the terms and conditions thereof without the
participant’s consent. No amendment of the Plan shall be made without stockholder approval if
stockholder approval is required by law, regulation, or stock exchange rule.

     19. Fair Market Value. The fair market value of Motorola’s common stock at any time
shall be determined in such manner as the Committee may deem equitable, or as required by
applicable law or regulation.

     20. Other Provisions.

          (a) The award of any benefit under the Plan may also be subject to other provisions (whether
or not applicable to the benefit awarded to any other participant) as the Committee determines
appropriate, including provisions intended to comply with federal or state securities laws and
stock exchange requirements, understandings or conditions as to the participant’s employment,
requirements or inducements for continued ownership of common stock after exercise or vesting of
benefits, forfeiture of awards in the event of termination of employment shortly after exercise or
vesting, or breach of noncompetition or confidentiality agreements following termination of
employment, or provisions permitting the deferral of the receipt of a benefit for such period and
upon such terms as the Committee shall determine.

          (b) In the event any benefit under this Plan is granted to an employee who is employed or
providing services outside the United States and who is not compensated from a payroll maintained
in the United States, the Committee may, in its sole discretion, modify the provisions of the Plan
as they pertain to such individuals to comply with applicable law, regulation or accounting rules.

     21. Governing Law. The Plan and any actions taken in connection herewith shall be
governed by and construed in accordance with the laws of the state of Delaware (without regard to
applicable Delaware principles of conflict of laws).

     22. Stockholder Approval. The Plan was adopted by the Board of Directors on March
19, 2002, subject to stockholder approval. The Plan and any benefits granted thereunder shall be
null and void if stockholder approval is not obtained at the next annual meeting of stockholders.

7EX-10.8

Exhibit 10.8

MOTOROLA OMNIBUS INCENTIVE PLAN OF 2000

(as amended through May 4, 2009)

     1. Purpose. The purposes of the Motorola Omnibus Incentive Plan of 2000 (the “Plan”)
are (i) to encourage outstanding individuals to accept or continue employment with Motorola, Inc.
(“Motorola”) and its subsidiaries or to serve as directors of Motorola, and (ii) to furnish maximum
incentive to those persons to improve operations and increase profits and to strengthen the
mutuality of interest between those persons and Motorola’s stockholders by providing them stock
options and other stock and cash incentives.

     2. Administration. The Plan will be administered by a Committee (the “Committee”) of
the Motorola Board of Directors consisting of two or more directors as the Board may designate from
time to time, each of whom shall qualify as a “Non-Employee Director” within the meaning set forth
in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) or any successor legislation. The Committee shall have the authority to construe and
interpret the Plan and any benefits granted thereunder, to establish and amend rules for Plan
administration, to change the terms and conditions of options and other benefits at or after grant,
and to make all other determinations which it deems necessary or advisable for the administration
of the Plan. The determinations of the Committee shall be made in accordance with their judgment
as to the best interests of Motorola and its stockholders and in accordance with the purposes of
the Plan. A majority of the members of the Committee shall constitute a quorum, and all
determinations of the Committee shall be made by a majority of its members. Any determination of
the Committee under the Plan may be made without notice or meeting of the Committee, in writing
signed by all the Committee members. The Committee may delegate the administration of the Plan, in
whole or in part, on such terms and conditions as it may impose, to such other person or persons as
it may determine in its discretion, except with respect to benefits to officers subject to Section
16 of the Exchange Act or officers who are or may be “covered employees” within the meaning of
Section 162(m) of the Internal Revenue Code (“Covered Employees”).

     3. Participants. Participants may consist of all employees of Motorola and its
subsidiaries and all Non-Employee Directors of Motorola. Any corporation or other entity in which
a 50% or greater interest is at the time directly or indirectly owned by Motorola shall be a
subsidiary for purposes of the Plan. Designation of a participant in any year shall not require
the Committee to designate that person to receive a benefit in any other year or to receive the
same type or amount of benefit as granted to the participant in any other year or as granted to any
other participant in any year. The Committee shall consider all factors that it deems relevant in
selecting participants and in determining the type and amount of their respective benefits.

     4. Shares Available under the Plan. There is hereby reserved for issuance under the
Plan an aggregate of 107,100,000 shares (reflecting adjustment for the 3-for-1 stock split
effective June 1, 2000) of Motorola common stock. If there is (i) a lapse, expiration, termination
or cancellation of any stock option or other benefit prior to the issuance of shares thereunder or

 

 

(ii) a forfeiture of any shares of restricted stock or shares subject to stock awards prior to
vesting, the shares subject to these options or other benefits shall be added to the shares
available for benefits under the Plan. In addition, any shares retained by Motorola pursuant to a
participant’s tax withholding election (other than shares used to satisfy any tax obligation upon
the vesting of restricted stock or other stock awards), and any shares covered by a benefit which
is settled in cash, shall be added to the shares available for benefits under the Plan. All shares
issued under the Plan may be either authorized and unissued shares or issued shares reacquired by
Motorola. Under the plan, no participant may receive in any calendar year (i) Stock Options
relating to more than 3,000,000 shares (reflecting adjustment for the 3-for-1 stock split effective
June 1, 2000), (ii) Restricted Stock that is subject to the attainment of Performance Goals of
Section 13 hereof relating to more than 300,000 shares (reflecting adjustment for the 3-for-1 stock
split effective June 1, 2000), (iii) Stock Appreciation Rights relating to more than 3,000,000
shares (reflecting adjustment for the 3-for-1 stock split effective June 1, 2000), or (iv)
Performance Shares relating to more than 300,000 shares (reflecting adjustment for the 3-for-1
stock split effective June 1, 2000). The shares reserved for issuance and the limitations set
forth above shall be subject to adjustment in accordance with Section 15 hereof. All of the
available shares may, but need not, be issued pursuant to the exercise of incentive stock options.
Notwithstanding anything else contained in this Section 4 the number of shares that may be issued
under the Plan for benefits other than stock options shall not exceed a total of 9,000,000 shares
(reflecting adjustment for the 3-for-1 stock split effective June 1, 2000, subject to adjustment in
accordance with Section 15 hereof).

     5. Types of Benefits. Benefits under the Plan shall consist of Stock Options, Stock
Appreciation Rights, Restricted Stock, Performance Stock, Performance Units, Annual Management
Incentive Awards and Other Stock or Cash Awards, all as described below.

     6. Stock Options. Subject to the terms of the Plan, Stock Options may be granted to
participants, at any time as determined by the Committee. The Committee shall determine the number
of shares subject to each option and whether the option is an Incentive Stock Option. The option
price for each option shall be determined by the Committee but shall not be less than 100% of the
fair market value of Motorola’s common stock on the date the option is granted. Each option shall
expire at such time as the Committee shall determine at the time of grant. Options shall be
exercisable at such time and subject to such terms and conditions as the Committee shall determine;
provided, however, that no option shall be exercisable later than the tenth anniversary of its
grant. The option price, upon exercise of any option, shall be payable to Motorola in full by (a)
cash payment or its equivalent, (b) tendering previously acquired shares (held for at least six
months) having a fair market value at the time of exercise equal to the option price, (c)
certification of ownership of such previously-acquired shares, (d) delivery of a properly executed
exercise notice, together with irrevocable instructions to a broker to promptly deliver to Motorola
the amount of sale proceeds from the option shares or loan proceeds to pay the exercise price and
any withholding taxes due to Motorola, and (e) such other methods of payment as the Committee, at
its discretion, deems appropriate. Notwithstanding any other provision of the Plan to the
contrary, upon approval of the Company’s stockholders, the Committee may provide for, and the
Company may implement, a one time only option exchange offer, pursuant to which certain outstanding
Stock Options could, at the election of the person holding such Stock Option, be tendered to the
Company for cancellation in exchange for the issuance of a lesser amount of Stock Options with a
lower exercise price or other equity benefit

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as approved by the Committee, provided that such one time only option exchange offer is
implemented within twelve months of the date of such stockholder approval.

     7. Stock Appreciation Rights. Stock Appreciation Rights (“SARs”) may be granted to
participants at any time as determined by the Committee. An SAR may be granted in tandem with a
Stock Option granted under this Plan or on a free-standing basis. The Committee also may, in its
discretion, substitute SARs which can be settled only in stock for outstanding Stock Options
granted after May 5, 2003, at any time when the Company is subject to fair value accounting. The
grant price of a tandem or substitute SAR shall be equal to the option price of the related option.
The grant price of a free-standing SAR shall be equal to the fair market value of Motorola’s
common stock on the date of its grant. An SAR may be exercised upon such terms and conditions and
for the term as the Committee in its sole discretion determines; provided, however, that the term
shall not exceed the option term in the case of a tandem or substitute SAR or ten years in the case
of a free-standing SAR and the terms and conditions applicable to a substitute SAR shall be
substantially the same as those applicable to the Stock Option which it replaces. Upon exercise of
an SAR, the participant shall be entitled to receive payment from Motorola in an amount determined
by multiplying the excess of the fair market value of a share of common stock on the date of
exercise over the grant price of the SAR by the number of shares with respect to which the SAR is
exercised. The payment may be made in cash or stock, at the discretion of the Committee, except in
the case of a substitute SAR which may be made only in stock.

     8. Restricted Stock. Subject to the terms of the Plan, Restricted Stock may be
awarded or sold to participants under such terms and conditions as shall be established by the
Committee. Restricted Stock shall be subject to such restrictions as the Committee determines,
including, without limitation, any of the following:

(a) a prohibition against sale, assignment, transfer, pledge, hypothecation or other
encumbrance of the shares of Restricted Stock for a specified period; or

(b) a requirement that the holder of Restricted Stock forfeit (or in the case of
            shares sold to the participant resell to Motorola at cost) such shares in the event
of termination of employment during the period of restriction.

All restrictions shall expire at such times as the Committee shall specify.

     9. Performance Stock. Subject to the terms of the Plan, the Committee shall designate
the participants to whom long-term performance stock (“Performance Stock”) is to be awarded and
determine the number of shares, the length of the performance period and the other terms and
conditions of each such award. Each award of Performance Stock shall entitle the participant to a
payment in the form of shares of common stock upon the attainment of performance goals and other
terms and conditions specified by the Committee.

          Notwithstanding satisfaction of any performance goals, the number of shares issued under a
Performance Stock award may be adjusted by the Committee on the basis of such further consideration
as the Committee in its sole discretion shall determine. However, the Committee may not, in any
event, increase the number of shares earned upon satisfaction of any performance goal by any
participant who is a Covered Employee. The Committee may, in its

3

 

discretion, make a cash payment equal to the fair market value of shares of common stock
otherwise required to be issued to a participant pursuant to a Performance Stock award.

     10. Performance Units. Subject to the terms of the Plan, the Committee shall
designate the participants to whom long-term performance units (“Performance Units”) are to be
awarded and determine the number of units and the terms and conditions of each such award. Each
Performance Unit award shall entitle the participant to a payment in cash upon the attainment of
performance goals and other terms and conditions specified by the Committee.

          Notwithstanding the satisfaction of any performance goals, the amount to be paid under a
Performance Unit award may be adjusted by the Committee on the basis of such further consideration
as the Committee in its sole discretion shall determine. However, the Committee may not, in any
event, increase the amount earned under Performance Unit awards upon satisfaction of any
performance goal by any participant who is a Covered Employee and the maximum amount earned by a
Covered Employee in any calendar year may not exceed $5,000,000. The Committee may, in its
discretion, substitute actual shares of common stock for the cash payment otherwise required to be
made to a participant pursuant to a Performance Unit award.

     11. Annual Management Incentive Awards. The Committee may designate Motorola
executive officers who are eligible to receive a monetary payment in any calendar year based on a
percentage of an incentive pool equal to 5% of Motorola’s consolidated operating earnings for the
calendar year. The Committee shall allocate an incentive pool percentage to each designated
participant for each calendar year. In no event may the incentive pool percentage for any one
participant exceed 30% of the total pool. Consolidated operating earnings shall mean the
consolidated earnings before income taxes of the Company, computed in accordance with generally
accepted accounting principles, but shall exclude the effects of Extraordinary Items.
Extraordinary Items shall mean (i) extraordinary, unusual and/or non-recurring items of gain or
loss (ii) gains or losses on the disposition of a business, (iii) changes in tax or accounting
regulations or laws, or (iv) the effect of a merger or acquisition, all of which must be identified
in the audited financial statements, including footnotes, or the Management Discussion and Analysis
section of the Company’s annual report.

          As soon as possible after the determination of the incentive pool for a Plan year, the
Committee shall calculate the participant’s allocated portion of the incentive pool based upon the
percentage established at the beginning of the calendar year. The participant’s incentive award
then shall be determined by the Committee based on the participant’s allocated portion of the
incentive pool subject to adjustment in the sole discretion of the Committee. In no event may the
portion of the incentive pool allocated to a participant who is a Covered Employee be increased in
any way, including as a result of the reduction of any other participant’s allocated portion.

     12. Other Stock or Cash Awards. In addition to the incentives described in sections 6
through 11 above, and subject to the terms of the Plan, the Committee may grant other incentives
payable in cash or in common stock under the Plan as it determines to be in the best interests of
Motorola and subject to such other terms and conditions as it deems appropriate.

4

 

     13. Performance Goals. Awards of Restricted Stock, Performance Stock, Performance
Units and other incentives under the Plan may be made subject to the attainment of performance
goals relating to one or more business criteria within the meaning of Section 162(m) of the
Internal Revenue Code, including, but not limited to, cash flow; cost; ratio of debt to debt plus
equity; profit before tax; earnings before interest and taxes; earnings before interest, taxes,
depreciation and amortization; earnings per share; operating earnings; economic value added; ratio
of operating earnings to capital spending; free cash flow; net profit; net sales; price of Company
Stock; return on net assets, equity or stockholders’ equity; market share; or total return to
shareholders (“Performance Criteria”). Any Performance Criteria may be used to measure the
performance of the Company as a whole or any business unit of the Company. Any Performance
Criteria may include or exclude Extraordinary Items. Performance Criteria shall be calculated in
accordance with the Company’s financial statements, generally accepted accounting principles, or
under a methodology established by the Committee prior to the issuance of an award which is
consistently applied and identified in the audited financial statements, including footnotes, or
the Management Discussion and Analysis section of the Company’s annual report. However, the
Committee may not in any event increase the amount of compensation payable to a Covered Employee
upon the attainment of a performance goal.

     14. Change in Control. Except as otherwise determined by the Committee at the time of
grant of an award, upon a Change in Control of Motorola, all outstanding Stock Options and SARs
shall become vested and exercisable; all restrictions on Restricted Stock shall lapse; all
performance goals shall be deemed achieved at target levels and all other terms and conditions met;
all Performance Stock shall be delivered; all Performance Units shall be paid out as promptly as
practicable; all Annual Management Incentive Awards shall be paid out based on the consolidated
operating earnings of the immediately preceding year or such other method of payment as may be
determined by the Committee at the time of award or thereafter but prior to the Change in Control;
and all Other Stock or Cash Awards shall be delivered or paid. A “Change in Control” shall mean:

     A Change in Control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act whether or not Motorola is then subject to such reporting requirement;
provided that, without limitation, such a Change in Control shall be deemed to have
occurred if (a) any “person” or “group” (as such terms are used in Section 13(d) and
14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of Motorola
representing 20% or more of the combined voting power of Motorola’s then outstanding
securities (other than Motorola or any employee benefit plan of Motorola; and, for
purposes of the Plan, no Change in Control shall be deemed to have occurred as a
result of the “beneficial ownership,” or changes therein, of Motorola’s securities
by either of the foregoing), (b) there shall be consummated (i) any consolidation or
merger of Motorola in which Motorola is not the surviving or continuing corporation
or pursuant to which shares of common stock would be converted into or exchanged for
cash, securities or other property, other than a merger of Motorola in which the
holders of common stock immediately prior to the merger have, directly or
indirectly, at least a 65% ownership interest in the outstanding common stock of the
surviving

5

 

corporation immediately after the merger, or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of Motorola other than any such transaction with
entities in which the holders of Motorola Common Stock, directly or indirectly, have
at least a 65% ownership interest, (c) the stockholders of Motorola approve any plan
or proposal for the liquidation or dissolution of Motorola, or (d) as the result of,
or in connection with, any cash tender offer, exchange offer, merger or other
business combination, sale of assets, proxy or consent solicitation (other than by
the Board), contested election or substantial stock accumulation (a “Control
Transaction”), the members of the Board immediately prior to the first public
announcement relating to such Control Transaction shall thereafter cease to
constitute a majority of the Board

     15. Adjustment Provisions.

          (a) If Motorola shall at any time change the number of issued shares of common stock by stock
dividend or stock split, the total number of shares reserved for issuance under the Plan, the
maximum number of shares which may be made subject to an award in any calendar year, and the number
of shares covered by each outstanding award and the price therefor, if any, shall be equitably
adjusted by the Committee, in its sole discretion.

          (b) Subject to the provisions of Section 14, the Board of Directors or the Committee may
authorize the issuance or assumption of benefits under this Plan in connection with any merger,
consolidation, acquisition of property or stock, or reorganization upon such terms and conditions
as it may deem appropriate.

          (c) In the event of any merger, consolidation or reorganization of Motorola with or into
another corporation, other than a merger, consolidation or reorganization in which Motorola is the
continuing corporation and which does not result in the outstanding common stock being converted
into or exchanged for different securities, cash or other property, or any combination thereof,
there shall be substituted, on an equitable basis as determined by the Committee in its discretion,
for each share of common stock then subject to a benefit granted under the Plan, the number and
kind of shares of stock, other securities, cash or other property to which holders of common stock
of Motorola will be entitled pursuant to the transaction.

     16. Nontransferability. Each benefit granted under the Plan shall not be transferable
otherwise than by will or the laws of descent and distribution and each Stock Option and SAR shall
be exercisable during the participant’s lifetime only by the participant or, in the event of
disability, by the participant’s personal representative. In the event of the death of a
participant, exercise of any benefit or payment with respect to any benefit shall be made only by
or to the executor or administrator of the estate of the deceased participant or the person or
persons to whom the deceased participant’s rights under the benefit shall pass by will or the laws
of descent and distribution. Notwithstanding the foregoing, at its discretion, the Committee may
permit the transfer of a Stock Option by the participant, subject to such terms and conditions as
may be established by the Committee.

6

 

     17. Taxes. Motorola shall be entitled to withhold the amount of any tax attributable
to any amounts payable or shares deliverable under the Plan, after giving the person entitled to
receive such payment or delivery notice and Motorola may defer making payment or delivery as to any
award, if any such tax is payable until indemnified to its satisfaction. The Committee may, in its
discretion, subject to such rules as it may adopt, permit a participant to pay all or a portion of
any required withholding taxes arising in connection with the exercise of a Stock Option or SAR or
the receipt or vesting of shares hereunder by electing to have Motorola withhold shares of common
stock, having a fair market value equal to the amount to be withheld.

     18. Duration, Amendment and Termination. No Incentive Stock Option shall be granted
more than ten years after the date of adoption of this Plan by the Board of Directors; provided,
however, that the terms and conditions applicable to any benefit granted on or before such date may
thereafter be amended or modified by mutual agreement between Motorola and the participant, or such
other person as may then have an interest therein. The Board of Directors or the Committee may
amend the Plan from time to time or terminate the Plan at any time. However, no such action shall
reduce the amount of any existing award or change the terms and conditions thereof without the
participant’s consent. No amendment of the Plan shall be made without stockholder approval if
stockholder approval is required by law, regulation, or stock exchange rule.

     19. Fair Market Value. The fair market value of Motorola’s common stock at any time
shall be determined in such manner as the Committee may deem equitable, or as required by
applicable law or regulation.

     20. Other Provisions.

          (a) The award of any benefit under the Plan may also be subject to other provisions (whether
or not applicable to the benefit awarded to any other participant) as the Committee determines
appropriate, including provisions intended to comply with federal or state securities laws and
stock exchange requirements, understandings or conditions as to the participant’s employment,
requirements or inducements for continued ownership of common stock after exercise or vesting of
benefits, forfeiture of awards in the event of termination of employment shortly after exercise or
vesting, or breach of noncompetition or confidentiality agreements following termination of
employment, or provisions permitting the deferral of the receipt of a benefit for such period and
upon such terms as the Committee shall determine.

          (b) In the event any benefit under this Plan is granted to an employee who is employed or
providing services outside the United States and who is not compensated from a payroll maintained
in the United States, the Committee may, in its sole discretion, modify the provisions of the Plan
as they pertain to such individuals to comply with applicable law, regulation or accounting rules.

     21. Governing Law. The Plan and any actions taken in connection herewith shall be
governed by and construed in accordance with the laws of the state of Delaware (without regard to
applicable Delaware principles of conflict of laws).

     22. Stockholder Approval. The Plan was adopted by the Board of Directors on February
29, 2000, subject to stockholder approval. The Plan and any benefits granted thereunder shall be
null and void if stockholder approval is not obtained at the next annual meeting of stockholders.

7

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