Document:

exv10w4

 

Exhibit 10.4

SEPARATION AND RELEASE AGREEMENT

This is a complete and final Agreement between MIKE ZAFIROVSKI (“you”), and Motorola,
Inc. (“Motorola”) that resolves all matters between you and Motorola. Except where
otherwise specified, this Agreement supersedes and nullifies all prior and concurrent
communications, acknowledgements and agreements between you and Motorola. This
Agreement has individually negotiated and has not been reached as part of a group
incentive or other termination program. In consideration for the payments and
benefits provided under this Agreement, you and Motorola agree to the following terms
of your separation from Motorola:

1. SEPARATION. Your duties and responsibilities as President and Chief
Operating Officer of Motorola ceased effective January 31, 2005 (the “Transition
Date”). You tender and Motorola accepts your resignation as an employee or director
of Motorola and its subsidiaries and affiliates effective as of July 29, 2005 (the
“Separation Date”). Between the Transition Date and the Separation Date, you shall
perform consulting services as requested by the Chairman of the Board and Chief
Executive Officer of Motorola (the “CEO”), to assist in effecting a smooth transition
of your responsibilities and knowledge to the CEO and/or any person(s) he designates.
At Motorola’s request, you shall execute any and all documents reasonably necessary to
confirm your resignation as an employee, director and/or officer of Motorola and its
subsidiaries and/or affiliates. You shall not stand for reelection to the Motorola
Board of Directors in 2005.

2. SEPARATION ALLOWANCE, REIMBURSEMENT OF EXPENSES, OFFICE SPACE. Motorola
will pay you at your regular base salary rate at regular payroll intervals, less
applicable state and federal payroll deductions, between your Transition Date and
Separation Date. The total gross amount of these payments is Four Hundred Sixty-Eight
Thousand Dollars and No Cents ($468,000.00) (“Transition Allowance”). Except as
otherwise provided herein, you will continue to participate in all employee plans, and
outstanding equity incentive awards, in which you currently participate and will be
credited with service for vesting (and receive dividends when declared and paid
generally) under all applicable Motorola employee plans through the Separation Date.
Motorola also will

	 	(a)  	pay you a lump sum Separation Allowance in the amount of
Sixteen Million Eight Hundred Thirty-Nine Thousand Two Hundred Ninety
Dollars and No Cents ($16,839,290.00), less applicable state and federal
payroll tax deductions, within thirty (30) days after you have signed,
returned and not revoked a supplemental release attached as Attachment A;
	 
	 	(b)  	reimburse you for financial planning services through the
filing of your income tax returns for the 2005 tax year, in accord with the
Motorola Financial Planning policy, upon submission of appropriate
invoices;
	 
	 	(c)  	pay your reasonable attorneys fees and expenses for
negotiation and preparation of this Agreement, upon submission of
appropriate invoices to Motorola, up to a maximum of Twenty-Five Thousand
Dollars and No Cents ($25,000);
	 
	 	(d)  	provide you with office space and administrative support
between January 31, 2005 and December 31, 2005, as determined by Motorola;
and
	 
	 	(e)  	provide you with access to e-mail and access to the
Motorola intranet to monitor your benefits and incentive awards between
January 31, 2005 and July 29, 2005.

 

 

Signature of Attachment A is a condition to your receiving the Separation Allowance
and other consideration under this Agreement. The above payments include and exceed
any vacation pay, bonuses, or any other amounts that are unpaid as of your separation.
You will receive a full 2004 bonus (with an individual performance factor of not less
than 1.0) under the MIP and a 2003-2004 MRIP bonus when other executives receive their
2004 bonuses, in accordance with the terms of the respective plans. On the Separation
Date, the unvested shares of your 2000 restricted stock grant will vest in accordance
with its terms. You will only be paid the amounts specifically identified in this
Agreement and will not receive any additional payments from Motorola. You shall not be
eligible for any 2005 bonus under the Motorola Incentive Plan (“MIP”), any bonus under
the Motorola Mid-Range Incentive Plan (“MRIP”) for the 2004-2005 performance cycle, or
any other bonus for 2004 or 2005 or later under any annual, mid-range or long-range
bonus plan.

3. BENEFIT AND COMPENSATION PLANS, OTHER PERQUISITES.

(a) The effect of your separation and this Agreement upon your participation in,
coverage under, and rights to distribution or other payment from any of Motorola’s
benefit or compensation plans, including but not limited to the Motorola Elected
Officers Supplemental Retirement Plan, the Motorola Elected Officers Life Insurance
Plan, the Motorola Mid-Range Incentive Plan for any given cycle, the Motorola
Incentive Plan, the Motorola Management Deferred Compensation Plan, the Motorola
Financial Planning Program, any applicable stock option plan, any stock option award
document, and any restricted stock agreements shall be governed by the terms of those
plans, documents and agreements. Motorola is making no guarantee, warranty or
representation in this Agreement regarding any position that may be taken by any
administrator or plan regarding the effect of this Agreement upon your rights,
benefits or coverage under those plans.

(b) Upon your separation, each of your outstanding stock option grants will be
accorded the most favorable treatment for which each grant qualifies per the terms of
the applicable stock option plans or award documents (exercisable for not less than
the lesser of 12 months or the unexpired stated option term).

(c) Benefits coverage in effect on your Separation Date under the Motorola Employee
Medical Benefits Plan (“Medical Plan”), as amended from time to time, will be
continued at the regular employee contribution rate through the end of December 31,
2005, provided that you comply with all terms and conditions of the Medical Plan,
including paying the necessary contributions and provided further, if you are
reemployed with another employer and become covered under that employer’s medical
plan, the medical benefits described herein (if
they are not terminated as provided in COBRA, defined below) shall be secondary to
those provided under such other plan. After the total period of medical benefit
continuation provided in this Agreement, you may elect to continue medical benefits
under the Medical Plan at your own expense, in accordance with COBRA. The period of
medical benefit continuation described immediately above counts toward and reduces the
maximum coverage under Section 4980B of the Internal Revenue Code (“COBRA”), as
described in Treasury Regulation Section 54.4980B-7, A-7(a). The COBRA period
commences on the first of the month following the Separation Date.

(d) Your use of Company aircraft, other than on Motorola business at the request of
the Chairman and Chief Executive Officer, and all other officer perquisites shall
cease no later than January 31, 2005.

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4. TRANSFER OF EQUIPMENT/OUTPLACEMENT. Effective on or within fourteen days
after your Separation Date, Motorola will transfer to you ownership of your cellular
phone, your home broadband modem, your “good” wireless e-mail device and your laptop
computer (the hard drive for which to be removed and replaced by Motorola). On that
date you will assume responsibility for all, maintenance, service and other fees
related thereto, and Motorola will have no responsibility for it thereafter. You are
responsible for any income taxes due as a result of this transfer. Motorola also will
provide senior executive outplacement and career continuation services by a firm to be
selected by Motorola for a period of up to one (1) year if you elect to participate in
such services.

5. PAYMENT IN THE EVENT OF DEATH. In the event of your death after the
effective date of this Agreement, your surviving spouse shall be paid any unpaid
payment amounts described in paragraphs 2 and 3 above, provided you had not breached
paragraphs 6, 8, 9, 10, 11, or 12 prior to your death and provided further that
eligibility for and payments made pursuant to paragraph 3 of this Agreement in the
event of your death shall be made according to the terms of the applicable plans,
award documents and agreements referenced therein.

6. NO DISPARAGEMENT. You agree that you will not, directly or indirectly,
individually or in concert with others, engage in any conduct or make any statement
calculated or likely to have the effect of undermining, disparaging or otherwise
reflecting poorly upon Motorola or its good will, products or business opportunities,
or in any manner detrimental to Motorola, though you may give truthful and
nonmalicious testimony if properly subpoenaed to testify under oath. Motorola agrees
that all members of the Senior Leadership Team (“SLT”), all members of the Motorola
Board of Directors and all vice presidents of Human Resources as of the date of
execution of this Agreement will not, directly or indirectly, individually or in
concert with others, engage in any conduct or make any statement calculated or likely
to have the effect of undermining, disparaging or otherwise reflecting poorly upon
you, or in any manner detrimental to you, though they may give truthful and
nonmalicious testimony if properly subpoenaed to testify under oath.

7. COOPERATION/INDEMNIFICATION. From your Transition Date, and for as long
thereafter as shall be reasonably necessary, you agree to cooperate fully with
Motorola in any investigation, negotiation, litigation or other action arising out of
transactions in which you were involved or of which you had knowledge during your
employment by Motorola. If you incur any business expenses in the course of
performing your obligations under this paragraph, you will be reimbursed for the full
amount of all reasonable expenses upon your submission of adequate receipts confirming
that such expenses actually were incurred. Both before and after termination of your
employment, Motorola will continue to indemnify you from claims, demands, judgments,
fines, penalties, settlement amounts, expenses (including reasonable attorneys fees
and expenses) and all other liability reasonably incurred in defending any actual or
threatened action, lawsuit, investigation or other similar judicial, arbitration or
administrative proceeding arising out of your employment with Motorola, provided that
if the matter is a civil action, you acted in good faith and in a manner you
reasonably believed to be in, or not opposed to, the best interests of Motorola and if
the matter is a criminal action, you had no reasonable cause to believe your conduct
was unlawful. Such indemnification shall
continue for so long as you may be subject to liability in connection with your
service as an officer or director of Motorola. You will continue to be insured under
policies of directors and officers liability insurance, to the fullest extent
permitted for former officers or directors under the applicable policy(ies); provided,
such insurance coverage may be terminated if Motorola terminates

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coverage generally
for all officers and directors.

8. PROTECTION OF CONFIDENTIAL INFORMATION AND TRADE SECRETS. You agree to
maintain the confidentiality of Motorola’s confidential or proprietary information and
trade secrets in accordance with agreements previously signed by you and with the law
applicable to you as an officer and director of Motorola, including but not limited to
state trade secret protection statutes and your common law fiduciary duty and duty of
loyalty. Such Motorola confidential and proprietary information and trade secrets
relating to Motorola’s past, present, or future business, products or technology
include, but are not limited to, information in the following categories: (a) strategy
and roadmap information including but not limited to business plans, strategic plans,
initiatives, potential merger, acquisition and divestiture plans, venture capital
investment plans, five-year and other financial and business plans, new and existing
business/product plans, and capital planning; (b) alliance, investment and strategic
relationship information including but not limited to non-public alliance and
investment identity, terms and conditions of contracts, terms of investment, and
status of existing/consideration of potential alliances and strategic relationships;
(c) management information including but not limited to activities of any
corporate-level, region-wide, Motorola-wide, business unit, regional or account
leadership team, or their direct reports; (d) technology information including but not
limited to present and future research and development, technology roadmaps,
technology licensing strategies, and communications and semiconductor core and process
strategies; (e) employee and employment information including but not limited to
members of leadership teams, job functions, organization and reporting relationships,
individual performance, salaries, grades, stock options, bonus plans, variable pay
plans, management and leadership planning, and high potential employee information,
benefits, recruiting, and human resources policy and procedure; (f) customer
information of Motorola including but not limited to non-public customer identity,
product purchases, purchase volume, purchase quantity, product mix, sales strategies
for particular customers, pricing, distribution plans and strategies, and customer
relationship information; (g) product pricing and cost information including but not
limited to product costs, margins, manufacturing, sales, development, and distribution
costs; (h) manufacturing information including capacity, vendors, materials costs,
foundry and outsourcing relationships, volume, pricing, and strategy, and internal
manufacturing capabilities and strategy; (i) core process redesign plans, strategies,
activities and implementation. Nothing in this Agreement is intended to prohibit you
from disclosing information about Motorola, its customers, successors or assigns, or
its affiliated entities, or about its or their products, services or business
opportunities that is not confidential or proprietary. You shall give Motorola
reasonable advance written notice of your intent to disclose any potentially
confidential information obtained by you as a result of your employment by Motorola.
For so long as the Company keeps this Agreement confidential, you agree to keep the
existence and terms of this Agreement confidential, unless required by law to disclose
this information, or except as may be disclosed to your
attorneys or as needed to be disclosed to anyone preparing your tax returns.

9. PROTECTION AGAINST INEVITABLE DISCLOSURE. You acknowledge that the nature
of your duties and responsibilities for a future employer or for any entity or
business for which you perform services in a contract relationship, if similar to
those you performed at Motorola, might, by the very nature of the duties and
responsibilities, result in the disclosure of trade secrets or other information that
is confidential and/or proprietary to Motorola. Accordingly, you agree to inform any
future employer, or entity or business contracting with you for services, of the
possibility of such disclosure and the requirements

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of this Agreement and request that
safeguards be established to ensure against such disclosure. You agree that you will
not perform any duties or responsibilities for any third party that will involve the
disclosure of Motorola confidential and/or proprietary information or trade secrets or
that will present a reasonable possibility of such disclosure.

10. RETURN OF MOTOROLA PROPERTY. You further agree, pursuant to your
obligations to Motorola under the provisions of your Employment Agreement, the
Motorola Code of Business Conduct, and the Corporate SOP titled Protection of
Proprietary Information (POPI) to return to Motorola by your Transition Date all
Motorola property and confidential and/or proprietary information including the
originals and all copies and excerpts of documents, drawings, reports, specifications,
samples and the like that were/are in your possession at all Motorola and non-Motorola
locations, including but not limited to information stored electronically on computer
hard drives or disks.

11. NON-COMPETITION/NO SOLICITATION. You acknowledge that you have entered
into certain Stock Option Agreements with Motorola and that such agreements, including
the non-competition provisions therein, continue in full force and effect according to
their terms. For a period of two years following your separation from employment, 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 to terminate his/her employment with Motorola and/or to seek employment with
your new or prospective employer, or any other company.

12. NEW EMPLOYMENT. You agree that you will immediately inform Motorola of
(i) the identity of any new employment, start-up business or self-employment in which
you have engaged or will engage between the Transition Date and July 29,2007 (the
“Notice Period”), (ii) your title in any such engagement, and (iii) your duties and
responsibilities. You hereby authorize Motorola to provide a copy of this Agreement,
excluding the economic terms, to any new employer or other entity or business by which
you are engaged during the Notice Period. You further agree that during the Notice
Period, you will provide such information to Motorola as it may from time to time
reasonably request in order to determine your compliance with this Agreement.

13. BREACH OF AGREEMENT. You acknowledge that Motorola’s agreement to make
the payments set forth in Paragraph 2 above is conditioned upon your faithful
performance of your obligations under this Agreement, and you agree to repay to
Motorola the Transition Allowance and Eleven Million Dollars ($11,000,000.00) of
the Separation Allowance received from Motorola under Paragraph 2, plus all sums
received from Motorola under Paragraph 2(b) and (c), if you breach any of your
obligations under Paragraphs 6, 8, 9, 10, 11 or 12 of this Agreement, or the Stock
Option Agreements referenced in Paragraph 11. In addition, for all your vested
options that were exercised within the three-year period prior to your Transition Date
or at any time following your Transition Date, you will immediately pay to Motorola an
amount representing the difference between the option price and the price you paid at
the time of exercise. In the event of breach, all restricted stock and/or restricted
stock unit agreements between you and Motorola shall operate according to their terms.
In any dispute regarding this Agreement, each party will pay its own fees and costs.

14. NON-ADMISSION/GENERAL RELEASE. You and Motorola agree that, in exchange
for the payments and other terms described above, Motorola is not admitting to any
wrongdoing or unlawful action in its dealing with you and you fully and completely
release

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Motorola and hold it harmless from any and all legal claims of any type to
date arising out of your employment or the separation of your employment from
Motorola, whether known or unknown, presently asserted or otherwise. This includes,
but is not limited to, breach of any implied or express employment contracts or
covenants; entitlement to any pay or benefits, including insurance and any claims
under the Motorola Elected Officers Supplemental Retirement plan or any other
retirement plan; claims for wrongful termination, public policy violations,
defamation, emotional distress or other common law matters; or claims of
discrimination based on race, sex, age (Age Discrimination in Employment Act),
religion, national origin, disability, veteran’s status, sexual preference, marital
status or retaliation; or claims under the Family and Medical Leave Act. If you are
employed in California, you expressly waive the protection of Section 1542 of the
Civil Code of the State of California, which states that: “A general release does not
extend to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially affected
his settlement with the debtor.” You understand that by signing this General Release
you are not releasing any claims or rights that cannot be waived by law, including the
right to file an administrative charge of discrimination.

15. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of your executors, administrators, legal representatives, heirs and legatees
and on Motorola and its subsidiaries, affiliates, agents, employees, officers and
their respective successors and assigns.

16. CONDITIONS OF AGREEMENT. You agree that you are signing this Agreement
knowingly and voluntarily, that you have not been coerced or threatened into signing
this Agreement and that you have not been promised anything else in exchange for
signing this Agreement. You agree that if any part of this Agreement is found to be
illegal or invalid, the rest of the Agreement will still be enforceable. You further
agree that you have had sufficient time (at least 21 days) to consider this Agreement
and you were advised to consult with an attorney, if desired, before signing below.
You understand and agree that any change, whether material or otherwise, to the
initial terms of this Agreement shall not restart the running of this twenty-one (21)
day period. This Agreement will not become
effective or enforceable until seven days after you sign it, during which time you can
revoke it if you wish, by delivering a signed revocation letter within the seven-day
period to A. Peter Lawson, General Counsel, Motorola, Inc., 1303 East Algonquin Rd.,
Schaumburg, Illinois 60196. Any alterations to this Agreement must be in writing,
signed by both parties.

	 	 	 	 	 	 	 
	MIKE ZAFIROVSKI	 	MOTOROLA, INC.
	 
	 	 	 	 	 	 
	/s/
Mike Zafirovski	 	By: 	/s/ Ruth A.
Fattori
	 
	 	 	 	 	 	 
	Date: 
	February 15,
2005	 	Date: 
	February 15,
2005

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ATTACHMENT A

In consideration for the promises made by Motorola in the Separation and Release
Agreement to which this is Attachment A, you fully and completely release Motorola and
hold it harmless from any and all legal claims of any type to date arising out of your
employment or the separation of your employment from Motorola, whether known or
unknown, presently asserted or otherwise. This includes, but is not limited to,
breach of any implied or express employment contracts or covenants; entitlement to any
pay or benefits, including insurance and any claims under the Motorola Elected
Officers Supplemental Retirement Plan or any other retirement plan; claims for
wrongful termination, public policy violations, defamation, emotional distress or
other common law matters; or claims of discrimination based on race, sex, age (Age
Discrimination in Employment Act), religion, national origin, disability, veteran’s
status, sexual preference, marital status or retaliation; or claims under the Family
and Medical Leave Act. If you are employed in California, you expressly waive the
protection of Section 1542 of the Civil Code of the State of California, which states
that: “A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.” You understand by
signing this General Release you are not releasing any claims or rights arising under
the Separation and Release Agreement or claims or rights that cannot be waived by law,
including the right to file an administrative charge of discrimination. You further
agree that you have had sufficient time (at least 21 days) to consider the attached
Separation and Release Agreement and you were advised to consult with an attorney, if
desired, before signing below. This Attachment A will not become effective or
enforceable until seven days after you sign it, during which time you can revoke it if
you wish, by delivering a signed revocation letter within the seven-day period to A.
Peter Lawson, General Counsel, Motorola, Inc., 1303 East Algonquin Rd., Schaumburg,
Illinois 60196.

	 	 	 	 	 
	Agreed to and accepted by:	 	 
	 
	 	 	 	 
	 	 	 
	MIKE ZAFIROVSKI	 	 
	 
	 	 	 	 
	Date: 

	 	 	 
	(to be signed after July 29, 2005 and before August 29, 2005)

7OFFER OF EMPLOYMENT LETTER W/ TERENCE D.MCNALLY

 

	 	 	 	 	 

EXHIBIT 10.1

February 3, 2005

Mr. Terence D. McNally

2 Lake Road

Wellesley, MA 02482

Dear Mr. McNally:

As follow-up to your discussions with Thomas J. Crocker, I am pleased to confirm the following
offer of employment to you contingent upon the successful completion of your background
verifications:

Position: Senior Vice President & Chief Financial Officer. Your start date is on or about
Monday, February 14, 2005. Your place of employment will be in here in Boca Raton, Florida at the
corporate office of CRT Properties, Inc. You will report directly to Thomas J. Crocker, Chief
Executive Officer.

Base Salary: $225,000.00 annually.

Relocation Allowance/Reimbursement: You will be provided with relocation allowance and/or
reimbursement of up to $10,000.00 for your moving costs. You will be required to provide receipts

Bonus Program: As an Officer, you will be eligible for the CRT Properties, Inc. Senior
Management Compensation Plan. Your maximum bonus potential will be equal to 75% of base salary and
approximately 50% of the bonus will be based on achieving corporate objectives and the remaining
50% to be based on achieving individual objectives. You will be granted $200,000 of restricted
stock upon commencement of employment. In no event is a bonus award guaranteed in any period.

Insurance Benefits: These benefits take effect the first of the month following your start
date. Our medical insurance carrier is Cigna Health Care. You are offered a choice of the HMO,
POS or PPO options. Our Basic Life, AD&D, Short Term and Long Term Disability as well as Optional
Life carrier is Jefferson Pilot. Our Dental carrier is The Guardian Life Insurance Company of
America. You may purchase supplementary policies from AFLAC.

401(k): You are also eligible to participate in the 401(k) Plan on the first of the month
following your start date. You may contribute up to 75% of your annual/base compensation.
Effective April 1, 2004, the Plan Administrator is Fidelity Investments. CRT may match 50
cents on every dollar that you contribute up to the first six (6) percent monthly. UBS
Financial Services, Inc. is our Financial Advisors.

Stock Investment Plan: These benefits become effective the first of the month following
your start date.

Section 125 Flexible Benefits Program: (Flex) allows you to pay your contributions for
employer-sponsored health and dental coverage’s using pre-tax dollars. Medical Expense
Reimbursement (Health FSA) allows you to pay for health plan deductible co-payments and other out
of pocket expenses which may not be covered by benefits. Dependent Care Assistant Plan (DCAP) will
reimburse some of your dependent care expenses, including daycare and after-school programs.

Employment Terms: This offer is contingent upon the successful completion of a full
background investigation and reference process. This offer of employment is not a contract and
neither the employee nor CRT is bound to continue the employment if either chooses, at its will, to
end the relationship at any time, for any reason, with or without cause.

 

 

I hope that after you have had an opportunity to review this letter, you will accept the Company’s
offer.

Please acknowledge your receipt and acceptance of this offer by signing below and return to my
attention in the self-addressed envelope enclosed. I look forward to working with you.

Sincerely,

/s/ Karen Lynch

Karen Lynch

Assistant Vice President

Human Resources & Benefits

/kl

     I am in agreement that the terms of this Offer Letter are acceptable to me

	 	 	 
	ACCEPTED AND AGREED:
	 	 
	 	 	 
	/s/ Terence D. McNally

Terence D. McNally	 	
2/6/2005

Dated:

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