Document:

exv10w29

 

Exhibit 10.29

MOTOROLA ELECTED OFFICERS SUPPLEMENTARY RETIREMENT PLAN

AS AMENDED EFFECTIVE AS OF JUNE 30, 2005

(Reflecting Amendments through May 8, 2007)

     Motorola, Inc. (the “Company”) heretofore established the Elected Officers Supplementary
Retirement Plan (the “Plan”). Effective November 9, 1988, the Board of Directors of the Company
approved extensive amendments to the Plan. This document sets forth the Plan as amended on
November 9, 1988 and includes all additional amendments effective through June 30, 2005, along with
such technical conforming changes as are deemed necessary in order to designate this document as an
amendment and complete restatement of the Plan effective as of said date. The Plan and the Trust
created to fund the Company’s obligations under the Plan are not intended to be qualified under
Sections 401(a) and 501(a) of the Internal Revenue Code. Amounts accrued or vested under the Plan
on and after January 1, 2005 are subject to the provisions of Section 409A of the Internal Revenue
Code; accordingly, as applied to those amounts, the Plan shall at all times be interpreted and
administered so that it is consistent with such Internal Revenue Code Section notwithstanding any
provision of the Plan to the contrary.

     Section 1. Definitions. Where the following words and phrases appear in this Plan,
they shall have the respective meanings set forth below, unless the context clearly indicates to
the contrary:

     1.1 Actuarial (or Actuarially) Equivalent: Equality in value of the aggregate amounts
expected to be received under different forms of payment, and except as provided below, based on
the actuarial assumptions, tables and interest rates which are adopted by the Committee from time
to time for this purpose and are set forth in Appendix A hereto.

     1.2 Affiliated Employer: Any corporation which is a member of a controlled group of
corporations (as defined in Section 414 (b) of the Internal Revenue Code) which includes the
Company.

     1.3 Annuity Starting Date: As defined in Section 8.1 hereof.

     1.4 Average MIP Award: As defined in Section 6 hereof.

     1.5 Board of Directors: The Board of Directors of the Company, and shall also mean any
committee of the Board of Directors which has been delegated authority to exercise the powers and
authority of the Board of Directors with respect to the Plan.

     1.6 Change in Control: The occurrence of any of the following events: a change in control
of the Company 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 Securities Exchange Act of 1934, as amended
(“Exchange Act”), or any successor provision thereto, whether or not the Company 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
the Company representing 20% or more of the combined voting power of the Company’s then outstanding
securities (other than the Company or any employee benefit plan of the Company; 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 the Company’s securities by either of the foregoing), (B) there
shall be consummated (i) any consolidation or merger of the Company in which the Company is not the
surviving or continuing corporation or pursuant to which shares of the Company’s common stock would
be converted into or exchanged for cash, securities or other property, other than a merger of the
Company in which the holders of the Company’s 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 the Company, other than any such transaction with entities in which the holders of
the Company’s common stock, directly or indirectly, have at least a 65% ownership interest, (C) the
shareholders of the Company approve any plan or proposal for the liquidation or dissolution of the
Company, 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.

     1.7 Committee: The persons appointed pursuant to Section 12 to assist the Company in the
administration of the Plan in accordance with said Section.

     1.8 Company: Motorola, Inc., a corporation organized and existing under the laws of the State
of Delaware or its successor or successors.

     1.9
Disability, Disabled: The Committee shall determine, in its reasonable discretion,
whether any Participant has a Disability or is Disabled.

     1.10
Early Retirement Date: The first day of the calendar month coincident with or
immediately following the Participant’s 60th birthday.

     1.11 Early Retirement Age: The Participant’s 60th birthday.

     1.12 Effective Date: November 9, 1988, the date on which the provisions of this Plan as
amended on November 9, 1988 become effective.

     1.13 ERISA: The Employee Retirement Income Security Act of 1974, as amended from time to
time.

     1.14 ERISA Excess Formula: As defined in Section 6 hereof.

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     1.15 Hour of Service:

(a) each hour for which an employee is paid, or entitled to payment, for the
performance of duties for the Company. These hours will be credited to the employee
for the computation period in which the duties are performed;

(b) each hour for which an employee is paid, or entitled to payment, by the Company
on account of a period of time during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including Disability), layoff, jury duty, military duty or
leave of absence. No more than 501 Hours of Service will be credited under this
paragraph for a single computation period (whether or not the period of time during
which no duties are performed occurs in a single computation period). Hours under
this paragraph will be calculated and credited pursuant to section 2530.200b-2 of
the Department of Labor Regulations which are incorporated herein by this reference;
and

(c) each hour for which back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Company. The same Hours of Service will not be credited
both under paragraph (a) or paragraph (b), as the case may be, and under this
paragraph (c). These hours will be credited to the employee for the computation
period or periods to which the award or agreement pertains rather than the
computation period in which the award, agreement, or payment is made. Solely for
purposes of determining whether a One Year Break in Service for vesting purposes has
occurred in a computation period, an employee who is absent from work for maternity
or paternity reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such employee but for such absence, or in any case
in which such hours cannot be determined, 8 hours of service per day of such
absence. For purposes of this paragraph, an absence from work for maternity or
paternity reasons means an absence (1) by reason of the pregnancy of the employee,
(2) by reason of a birth of a child of the employee, (3) by reason of the placement
of a child with the employee in connection with the adoption of such child by such
employee, or (4) for purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of Service credited under
this paragraph shall be credited (1) in the computation period in which the absence
begins if the crediting is necessary to prevent a One Year Break in Service in that
period, or (2) in all other cases, in the following computation period. The total
Hours of Service Required to be credited for maternity or paternity reasons shall
not exceed 501 hours. As used in this definition, the term Company includes all
Affiliated Employers.

     1.16 Normal Formula: As defined in Section 6 hereof.

     1.17 Normal Retirement Age: The Participant’s 65th birthday.

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     1.18 Normal Retirement Date: A Participant’s Normal Retirement date is the first day of the
calendar month coincident with or immediately following the Participant’s 65th birthday.

     1.19 Officer: An officer of the Company elected by the Board of Directors, or designated by
the Chief Executive Officer of the Company and deemed having been so elected in accordance with
powers delegated by the Board of Directors.

     1.20 One Year Break in Service: An employee shall incur a One Year Break in Service if in any
computation period, as described in the definition of a Year of Service, he does not complete more
than five hundred (500) Hours of Service. In the case of an employee who is absent from work for
maternity or paternity reasons, as described in Section 1.15, Hours of Service shall be credited to
such employee in accordance with Section 1.15.

     1.21 PBGC: Pension Benefit Guaranty Corporation, a body corporate within the Department of
Labor established under the provisions of Title IV of ERISA.

     1.22 Participant: An officer participating in the Plan in accordance with the provisions of
Section 3.

     1.23 Pension Plan: The Motorola, Inc. Pension Plan.

     1.24 Plan: Motorola Elected Officers Supplementary Retirement Plan, the plan set forth
herein, as amended from time to time.

     1.25 Plan Year: The 12-month period commencing on January 1 and ending on December 31.

     1.26 Qualified Joint and Survivor Annuity: As defined in Section 8.1 hereof.

     1.27 Qualified Pre-Retirement Annuity: As defined in Section 8.2 hereof.

     1.28 Retirement Benefit: As defined in Section 6 hereof.

     1.29 Salary: The amount paid to an Officer by the Company as annual basic compensation,
excluding awards under the Motorola Incentive Plan (MIP) (as well as any prior awards under the
Motorola Executive Incentive Plan (MEIP) and the Performance Excellence=Rewards (PE=R) program),
Mid Range Incentive Plan and Long Range Incentive Program, moving expense reimbursements, the
imputed fair market value of a Company provided automobile or excess group-term life insurance
coverage and similar imputed income items, and including the officer’s elective contributions to
the Motorola Management Deferred Compensation Plan of amounts that would otherwise meet the above
definition of Salary but for their contribution to the Motorola Management Deferred Compensation
Plan.

     1.30 SCRP: The Motorola Supplementary Contributory Retirement Plan.

     1.31 Service Credit: As defined in Section 6 hereof.

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     1.32 Subsidiary: Any corporation more than fifty percent (50%) of the outstanding voting
stock of which (other than directors’ qualifying shares) is at the time directly or indirectly
owned by the Company or by one or more Subsidiaries or by the Company and one or more Subsidiaries.

     1.33 Survivor Annuity Starting Date: As defined in Section 8.2 hereof.

     1.34 Trust: Any trust established for receiving, holding, investing and disposing of the
Trust Fund and for implementing and carrying out the provisions of the Plan.

     1.35 Trustee: The person or entity named as trustee herein or in any separate Trust forming
part of this Plan, and any successors.

     1.36 Trust Agreement: As defined in Section 14.1 hereof.

     1.37 Trust Fund: The Plan assets held by the Trustee under the Trust.

     1.38 Year of Service: A twelve (12) consecutive month period (computation period) during
which period the employee has completed at least one thousand (1,000) Hours of Service. The
computation period of an employee shall begin with the date he commences employment with the
Company and additional computation periods shall begin on each succeeding anniversary of the date
the employee commences employment with the Company. In the event an employee’s employment with the
Company is terminated and such employee has a One Year Break in Service following the termination
of his employment, and if such employee is later reemployed by the Company, the computation period
shall begin with the date such employee is reemployed by the Company, and additional computation
periods shall begin on each succeeding anniversary of the date the employee was reemployed by the
Company. All Years of Service (both pre-break and post-break) will be counted for vesting purposes
and for calculating the Retirement Benefit under the Normal Formula. Years of Service with any
Affiliated Employer shall be counted as Years of Service with the Company.

     Section 2. Construction. The masculine gender, where appearing in the Plan, shall be
deemed to include the feminine gender, and the singular may include the plural, unless the context
clearly indicates to the contrary. The words “hereof,” “herein,” “hereunder,” and other similar
compounds of the word “here” shall mean and refer to the entire Plan, not to any particular
provision or Section. Section headings are included for convenience of reference and are not
intended to add to, or subtract from, the terms of the Plan.

     Section 3. Participation. Each officer who is age 55 or older on the Effective Date
shall become a Participant in the Plan, as amended, on the Effective Date. After the Effective
Date, an Officer shall become a Participant in the Plan upon the earlier of (i) his designation as
a Participant by the Committee at any age under age 55, (ii) attaining age 55, (iii) his election
as an officer if age 55 or older at that time, (iv) a Change in Control or (v) his Disability;
provided, however, that there shall be no new Participants in the Plan after December 31, 1999. A
Participant whose right to a Retirement Benefit was not vested on

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December 31, 1999, shall no longer participate in the Plan upon the Participant’s acceptance
of the offer to exchange his or her’s interest in the Plan for other consideration from Motorola.

     Section 4. Vesting. A Participant’s right to a Retirement Benefit shall be vested
and nonforfeitable as follows:

(a) For a Participant who has not attained age 60, when he has completed at least
five Years of Service;

(b) For a Participant who is age 60 or older but who has not attained age 65, when
he has completed at least two Years of Service;

(c) Upon attainment of age 65 (Normal Retirement Age) regardless of his Years of
Service;

(d) Upon a Change in Control of the Company regardless of the Participant’s age or
number of Years of Service;

(e) At the time he becomes Disabled regardless of the Participant’s age or number of
Years of Service.

     Section 5. Eligibility for Retirement Benefits. To be eligible for a Retirement
Benefit under the Plan, a Participant must also be a participant in the Pension Plan if eligible
for participation, or the pension plan of a Subsidiary if the Subsidiary has a pension plan and the
Participant is eligible to participate in it, and he must meet the other eligibility requirements
stated herein. A Participant who is vested and who retires on or after age 60 shall be eligible to
receive an unreduced Retirement Benefit upon retirement. A Participant who retires at any age
because of Disability shall be eligible to receive an unreduced Retirement Benefit upon retirement.
A Participant whose employment with the Company terminates at any age because of a Change in
Control shall be eligible to receive an unreduced Retirement Benefit upon retirement at or after
age 55. A Participant who is vested and ceases to be an Officer or ceases to be employed by the
Company for any reason (other than Disability or a Change in Control) before he has attained age 57
shall be eligible to receive a deferred unreduced Retirement Benefit upon retirement at or after
age 60 or, subject to the condition stated hereinbelow, a deferred actuarially reduced Retirement
Benefit determined as provided in this Section 5 upon retirement at or after age 57. A Participant
who is vested and who retires at or after age 57 but prior to age 60 shall, subject to the
condition stated hereinbelow, be eligible to receive an actuarially reduced Retirement Benefit upon
retirement determined as follows:

     (a) With respect to the lump sum payment option, the lump sum amount to be paid to the
Participant will be equal to the cost to purchase (from an insurance company selected by the
Company) a deferred annuity for the Participant at retirement which would provide the full
Retirement Benefit with payments commencing at age 60.

     (b) With respect to the lifetime income payments option, such payments will be determined by
the amount of lifetime income which could be provided by purchasing an

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annuity with the lump sum amount determined in (a) above. The other optional forms of payment
under the Plan will also be available to the Participant on an actuarially reduced basis.

     Notwithstanding the foregoing, as a condition to the availability of a Retirement Benefit at or
after age 57 but prior to age 60, the Participant shall enter into an agreement not to compete with
the Company.

     Section 6. Determination of Amount of Retirement Benefit. A benefit for each
Participant shall be calculated under the Normal Formula. A benefit for each Participant who
participates in the Pension Plan shall also be calculated under the ERISA Excess Formula. The
formula which produces the greater benefit will be the applicable formula for Participants who
participate in the Pension Plan. The benefit so calculated for each Participant, whether
determined under the Normal Formula or the ERISA Excess Formula, shall be reduced by the amount
(computed on a life annuity basis) payable to such Participant under the Pension Plan (but not
including SCRP payments), the pension plan of any Subsidiary, the Company’s Long Term Disability
Plan, and the disability plan of any Subsidiary, whichever plan or plans is or are at the time
applicable to such Participant. The results obtained shall be the Participant’s “Retirement
Benefit,” provided, however, that the Retirement Benefit payable annually to any Participant shall
not exceed seventy percent (70%) of the lesser of (i) his Salary as of the date immediately prior
to retirement, or (ii) his Salary as of June 30, 2005 if he was an officer on said date.

     Normal Formula. The monthly benefit under the Normal Formula expressed as lifetime
income shall be calculated as follows: One-Twelfth (1/12) times the sum of (i) Salary as of the
date immediately prior to retirement (or as of such earlier date as may be mutually agreed upon by
the Company and the Officer affected) or in the case of a deferred vested Retirement Benefit, as of
the date of the Participant’s termination of employment; provided, that in no event shall a
Participant’s Salary for purposes of this clause (i) be greater than the Participant’s Salary as of
June 30, 2005 if he was an Officer on said date, plus (ii) the five year Average MIP Award paid to
the Officer under the Motorola Incentive Plan (MIP) (and taking into account for this purpose any
previous awards under the Motorola Executive Incentive Plan (MEIP) or Performance Excellence =
Rewards program (PE=R) as provided in the definition of “Average MIP Award” below) times forty
percent (40%) plus an additional percentage (“Service Credit”) equal to one-fourth (1/4) of one
percent (1%) for each Year of Service of the Officer in excess of ten (10) Years of Service,
subject to the following maximums:

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	Age At	 	 	 	Age At	 	 
	Retirement	 	Maximum	 	Retirement	 	Maximum
	55	 	42.50%	 	61	 	44.00%
	56	 	42.75%	 	62	 	44.25%
	57	 	43.00%	 	63	 	44.50%
	58	 	43.25%	 	64	 	44.75%
	59	 	43.50%	 	65 & over 	 	45.00%
	60	 	43.75%	 	 	 	 

If the Service Credit determined as above is less than the Early Service Credit calculated under
the Plan as it existed prior to the Effective Date for any Participant, the Early Service Credit
shall be used for such Participant in lieu of the Service Credit determined as above.

     “Average MIP Award” shall mean and shall be calculated as follows:

(i) For each of the eight full calendar years prior to retirement, each year’s MIP
award (which term shall include any prior MEIP and/or PE=R awards during the
applicable period), including any portion thereof which the officer elects to
contribute under the Motorola Management Deferred Compensation Plan) is calculated
as a percentage of that year’s actual earnings from Salary.

(ii) The five calendar years which produce the highest percentages are then
determined.

(iii) The average of the percentages for those five years is then determined.

(iv) The average of the percentages so determined is then applied to the Officer’s
Salary at retirement (or at such earlier date as may be mutually agreed upon by the
Company and the officer affected) to determine the Average MIP Award amount for
purposes of this Plan.

     Following is an example of the calculation:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Actual	 	 	 	 	 	MIP Award as %
	 	 	 	 	 	 	Earnings from	 	MIP	 	of Actual Earnings
	Year	 	 	 	Salary	 	Award	 	from Salary
	 	1	 	 	 
	 	$	190,000	 	 	$	57,000	 	 	 	30.0	%
	 	2	 	 	 
	 	$	180,000	 	 	 	36,000	 	 	 	20.0	%
	 	3	 	 	 
	 	$	170,000	 	 	 	30,600	 	 	 	18.0	%
	 	4	 	 	 
	 	$	160,000	 	 	 	20,800	 	 	 	13.0	%
	 	5	 	 	 
	 	$	150,000	 	 	 	48,000	 	 	 	32.0	%
	 	6	 	 	 
	 	$	140,000	 	 	 	-0-	 	 	 	0	 
	 	7	 	 	 
	 	$	130,000	 	 	 	28,600	 	 	 	22.0	%
	 	8	 	 	 
	 	$	110,000	 	 	 	17,600	 	 	 	16.0	%

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* Average MIP rate for five years which produces the highest percentage 24.4%

Final Salary = $200,000

Average MIP Award (24.4% of $200,000 final Salary) = $48,800

     Payments made under the Mid Range Incentive Plan and Long Range Incentive Plan shall not be
taken into account in determining the Average MIP Award.

     ERISA Excess Formula. The monthly benefit under the ERISA Excess Formula expressed as
lifetime income shall be calculated in the same manner as the Normal Retirement Benefit is
calculated under Section 6.1 of the Pension Plan. The benefit calculated under this formula shall
not be subject to the limitations of Sections 401(a)(17) and 415 of the Internal Revenue Code and
shall be calculated without giving effect to any reduction in earnings attributable to the
Participant’s elective contributions to the Motorola Management Deferred Compensation Plan.

     Notwithstanding the method prescribed above for calculating Average MIP Award, if, under
extraordinary circumstances which are in the interest of the Company, as determined by the Company
(acting through the Board of Directors or any committee thereof to whom authority has been
delegated) in its sole discretion, an officer extends his or her employment beyond his or her
planned retirement date at the request of the Company, the Company may, with the consent of the
Officer affected, calculate the Officer’s Average MIP Award by using the MIP awards for the
calendar years that would have been used if the officer had retired on the date originally planned.

     Section 7. Payment of Retirement Benefit. A Participant’s Retirement Benefit shall
be paid in monthly installments commencing as follows: (i) in the case of a vested Participant who
retires prior to or on or after his Early Retirement Age, on the first day of the month coinciding
with or immediately following the date of his retirement, (ii) in the case of a Participant who
retires before his Early Retirement Age because of Disability, on the first day of the month
coinciding with or immediately following the date of Disability, and (iii) in the case of a
Participant who has a deferred vested Retirement Benefit, on the first day of the month selected by
the Participant after he has attained his Early Retirement Age, or if a Change in Control has
occurred, after he has attained age 55 rather than his Early Retirement Age. Such payments shall
continue on the first day of each succeeding month until the benefit terminates as provided in the
Plan for the type of benefit being paid to the Participant. Unless the Participant elects
otherwise, in writing, payment of benefits under the Plan will begin not later than the 60th day
after the latest of the close of the Plan Year in which:

	(1)	 	the Participant attains Normal Retirement Age;

	(2)	 	occurs the 10th anniversary of the year in which the Participant commenced
participation in the Plan; or

	(3)	 	the Participant terminates his service with the Company.

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     Benefits under the Plan that accrued or vested on and after January 1, 2005 are subject to the
provisions of Section 409A of the Code and the provisions of Appendix C of the Plan; accordingly,
as applied to those amounts, the Plan shall at all times be interpreted and administered so that it
is consistent with such Internal Revenue Code Section notwithstanding any provision of the Plan to
the contrary.

     7.1 Facility of Payment: If, in the Committee’s judgment, any person to whom benefits are
payable hereunder is under a legal disability or unable to care for his affairs because of illness,
accident, or other incapacity, any payment due (unless prior claim therefor shall have been made by
a duly qualified guardian, committee, or other legal representative) may be paid to his spouse,
parent, brother or sister, or any other person as the Committee may determine. Any such payment
shall be a payment for the account of such person and shall, to the extent thereof, be a complete
discharge of any liability under the Plan to such person.

     Section 8. Qualified Joint and Survivor Annuity and Qualified Pre-Retirement Survivor
Annuity.

      8.1 Qualified Joint and Survivor Annuity.

(a) Unless otherwise elected as provided below, a Participant who is married on the
Annuity Starting Date and who does not die before the Annuity Starting Date shall
receive the value of his benefit in the form of a Qualified Joint and Survivor
Annuity. An unmarried Participant shall receive the value of his benefit in the
form of a life annuity. Such unmarried Participant, however, may elect in writing
to waive the life annuity. The election must comply with the provisions of this
Section as if it were an election to waive the joint and survivor annuity by a
married Participant, but without the spousal consent requirement. The joint and
survivor annuity and the life annuity form of distribution shall be the Actuarial
Equivalent of the benefits due the Participant.

(b) Any election to waive the Qualified Joint and Survivor Annuity must be made by
the Participant in writing during the election period, must be consented to in
writing by the Participant’s spouse and must indicate that the Participant alone is
to receive the benefit or designate a specific beneficiary or beneficiaries,
including any class of beneficiaries or a contingent beneficiary and a form of
benefit payment which may not be changed (except back to a Qualified Joint and
Survivor Annuity) without spousal consent, unless the consent of the spouse
expressly permits designations by the Participant without any requirement of further
consent by the spouse. Such spouse’s consent shall be irrevocable and must
acknowledge the effect of such election and be witnessed by a Plan representative or
a notary public. A consent that permits designations by the Participant without any
requirement of further consent by such spouse must acknowledge that the spouse has
the right to limit consent to a specific beneficiary and a specific form of benefit,
where applicable and that the spouse voluntarily elects to relinquish either or both
of such rights. Such

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consent shall not be required if it is established to the satisfaction of the
Committee that the required consent cannot be obtained because there is no spouse,
the spouse cannot be located, or other circumstances that may be prescribed by
Treasury regulations. The election made by the Participant and consented to by his
spouse may be revoked by the Participant in writing without the consent of the
spouse at any time during the election period. The number of revocations shall not
be limited. Any new election must comply with the requirements of this paragraph.
A former spouse’s waiver shall not be binding on a new spouse.

(c) The election period to waive the joint and survivor annuity and to revoke an
election shall be the one hundred and eighty (180) day period ending on the Annuity
Starting Date.

(d) “Annuity Starting Date” means the first day of the first period for which an
amount is paid as an annuity, or, in the case of a Retirement Benefit not payable in
the form of an annuity, the first day on which all events have occurred which
entitles the Participant to such Retirement Benefit.

(e) “Qualified Joint and Survivor Annuity” means a reduced annuity for the life of
the Participant with a survivor annuity for the life of the spouse which is either
50 percent (50%), 75 percent (75%) or 100 percent (100%) (as selected by the
Participant, and if no selection is made, it will be 50%) of the amount of the
annuity which is payable during the joint lives of the Participant and the spouse
and which is the Actuarial Equivalent of the normal form of benefit.

(f) With regard to the election, the Committee shall provide the Participant no less
than thirty (30) days and no more than one hundred and eighty (180) days prior to
the Annuity Starting Date (and consistent with Treasury regulations), a written
explanation of:

(i) the terms and conditions of the Qualified Joint and Survivor Annuity,

(ii) the Participant’s right to make and the effect of an election to waive the
Qualified Joint and Survivor Annuity,

(iii) the right of the Participant’s spouse to consent to any election to waive the
qualified Joint and Survivor Annuity,

(iv) the right of the Participant to revoke such election, and the effect of such
revocation, and

(v) the relative values of the various optional forms of benefit under the Plan.

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(g) The distribution of a benefit in the form of a Qualified Joint and Survivor
Annuity shall not require the consent of the Participant’s spouse if such
distribution commences prior to the later of his Normal Retirement Age or age 62.

     8.2 Qualified Pre-Retirement Survivor Annuity. In the case of a vested Participant who dies
before the Annuity Starting Date, whether or not separated from service with the Company at the
time of death, and who has a surviving spouse, a Qualified Pre-Retirement Survivor Annuity shall be
paid to the surviving spouse of such Participant. This form of benefit may not be waived nor may
another beneficiary be selected. Under this form of benefit, the Participant’s surviving spouse
will receive a lifetime annuity payable in monthly installments equal to fifty percent (50%) of the
Retirement Benefit calculated for the deceased Participant as of the date immediately prior to his
death. For purposes of this Section 8.2, a surviving spouse will begin to receive payments on the
first day of the month immediately following the date of the Participant’s death unless such
surviving spouse elects a later date. A surviving spouse’s benefit will be paid in a lump sum upon
such spouse’s written request made prior to the date benefit payments begin. The date on which a
surviving spouse begins to receive payments as an annuity or receive a lump sum payment under this
Section 8.2 shall be referred to as the “Survivor Annuity Starting Date.”

     8.3 Non-Qualified Pre-Retirement Survivor Annuity. In addition to the Qualified
Pre-Retirement Survivor Annuity provided for in Section 8.2 hereof, in the case of a vested
Participant who dies before his of her Annuity Starting Date, whether or not separated from service
with the Company at the time of death, and who has a surviving spouse, a Non-Qualified
Pre-Retirement Survivor Annuity shall be paid to the surviving spouse of such Participant. This
form of benefit may not be waived nor may another beneficiary be selected. Under this form of
benefit, the Participant’s surviving spouse will receive a lifetime annuity payable in monthly
installments equal to fifty percent (50%) of the Retirement Benefit calculated for the deceased
Participant as of the date immediately prior to his of her death. For purposes of this Section
8.3, a surviving spouse will begin to receive payments on the first day of the month immediately
following the date of the Participant’s death unless such surviving spouse elects a later date. A
surviving spouse`s benefit will be paid in a lump sum upon such spouse’s written request made prior
to the date benefit payments begin. The date on which a surviving spouse begins to receive
payments as an annuity or receive a lump sum payment under this Section 8.3 shall be referred to as
the “Survivor Annuity Starting Date.”

     Section 9.  Optional Methods of Payment. If a married Participant has duly waived the
Qualified Joint and Survivor Annuity form of benefit or if an unmarried Participant has duly waived
the life annuity form of benefit in accordance with the requirements of Section 8.1, upon the
written request of such a Participant filed with the Committee before the Annuity Starting Date in
accordance with the rules governing such requests, the Committee shall provide for him an optional
form of Retirement Benefit, in one of the forms set forth below, which shall be the Actuarial
Equivalent of the Retirement Benefit to which he would be otherwise entitled hereunder except that
no optional form shall be granted which would

-12-

 

reduce the value of the Participant’s Retirement Benefit payable to him personally by more
than fifty percent (50%):

     (i) a lump sum payment;

     (ii) in the case of a married Participant, in the form of a life annuity; or

     (iii) a life-ten years certain form as set forth in Section 6.7(b) of the Pension
Plan.

     Section 10. Limitations on Benefits. All rights and benefits, including elections,
provided to a Participant in the Plan shall be subject to the rights afforded to any alternate
payee under a qualified domestic relations order as those terms are defined in Section 206(d) of
ERISA.

     Section 11. Nonalienation of Benefits. No benefit which shall be payable out of the
Trust Fund to any person (including a Participant or his beneficiary), or any other amount or asset
set aside or purchased under Section 13 to fund a Participant’s Retirement Benefit, shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be void; and no such benefit shall in any manner be liable for, or subject
to, the debts, contracts, liabilities, engagements, or torts of any such person, nor shall it be
subject to attachment or legal process for or against such person, and the same shall not be
recognized by the Trustee, except to such extent as may be required by law. This provision shall
also apply to the creation, assignment or recognition of a right to a benefit payable with respect
to a Participant pursuant to a domestic relations order as defined in Section 206(d) of ERISA:
unless such order is determined to be a qualified domestic relations order as defined in Section
206(d) of ERISA; provide, however, a domestic relations order entered prior to January 1, 1985 may,
in the discretion of the Officers Plan Committee or its delegate, be treated as a Qualified
Domestic Relations Order, even though the order does not satisfy the requirement of Section 206(d)
of ERISA. The Committee shall establish a written procedure to determine the qualified status of
domestic relations orders and to administer distributions under such qualified orders.

     Section 12. Administration.

     12.1 Officers Plan Committee: The Board of Directors shall appoint a committee to be known as
the Officers Plan Committee to administer the Plan. The Committee shall be the Named Fiduciary for
purposes of Section 402 (a) of ERISA. The Committee shall consist of one or more persons appointed
by the Board of Directors, and each member shall serve until his resignation or removal or until
his successor is appointed. Each member may, but need not, be a director, officer or employee of
the Company. A member of the Committee may resign by delivering his written resignation to the
Board of Directors. Any member of the Committee may be removed, with or without cause, by the Board
of Directors.

-13-

 

     12.2 Powers and Duties of the Committee: The Committee shall carry out the duties assigned to
it under the Plan and shall administer the Plan in accordance with its terms. The Committee shall
have all powers as may be necessary to carry out its duties under the Plan, including, but not by
way of limitation, the following: to construe and interpret the provisions of the Plan; to decide
any disputes which may arise under the Plan; to decide all questions that shall arise under the
Plan, including questions as to the eligibility to become Participants, and the amount, manner and
time of payment of any benefits under the Plan; to decide questions submitted by the Trustee on all
matters necessary for it to properly discharge its duties, powers and obligations; to employ or
appoint legal counsel, accountants, actuaries, consultants or any person to assist in the
administration of the Plan and any other agents it deems advisable. The Committee shall also have
the power to allocate and delegate fiduciary responsibilities. The Committee shall have the power
and authority to direct the investment of the Trust Fund, and in connection with such power, may
delegate in writing authority to manage assets of the Trust Fund to one or more investment
managers. The Committee may adopt from time to time written investment policies and guidelines
which shall govern the manner in which the assets of the Trust Fund are to be invested, which
policies and guidelines shall be followed by the investment managers. With respect to Retirement
Benefits funded under Section 13.1(b) or (c) hereof, the Committee shall have the discretion to
appoint such agents as are necessary to act on its behalf and shall have the authority to direct
the investment of amount held to fund such Retirement Benefits.

     12.3 Meetings of the Committee: The Committee shall act by a majority of its members at the
time in office, and such action may be taken either by a vote at a meeting or in writing without a
meeting. The Committee may authorize any person or persons, who may but need not be a member or
members of the Committee, to execute any document or documents on behalf of the Committee, in which
event the Committee shall notify the Trustee in writing of such action and the name or names of
such person or persons so designated. The Trustee thereafter may accept and rely upon any document
executed by such person or persons as representing action by the Committee until the Committee
shall file with the Trustee a written revocation of such designation.

     12.4 Adoption of Rules by the Committee: The Committee may adopt such rules as it deems
necessary, desirable or appropriate. All rules and decisions of the Committee shall be uniformly
and consistently applied to all Participants in similar circumstances. When making a determination
or calculation, the Committee shall be entitled to rely upon information furnished by a Participant
or beneficiary, the Company, the legal counsel of the Company, or the Trustee.

     12.5 Instructions to Trustee: The Committee shall advise the Trustee in writing with respect
to all benefits which become payable under the terms of the Plan and shall direct the Trustee to
pay such benefits from the Trust Fund.

     12.6 Reports and Records: The Committee shall keep a record of all its proceedings and acts
and shall keep all such books of account, records, and other data as may be necessary for the
proper administration of the Plan. The Committee shall file or cause to be filed all

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such annual reports, financial and other statements as may be required by any federal or state
statute, agency or authority within the time prescribed by the law or regulations for filing said
documents. The Committee shall furnish such reports, statements and other documents to
Participants and Beneficiaries of the Plan as may be required by any federal or state statute or
regulation within the time prescribed for furnishing such documents.

     12.7 Inspection of Records of the Committee: The Committee’s records and books of account
shall be open to inspection at all reasonable times by the Company or the Board of Directors, or
both, or any person designated from time to time by the Company or Board of Directors.

     12.8 Indemnification: The Company shall indemnify each member of the Committee, and the
directors, officers and employees of the Company involved in the operation and administration of
the Plan against any and all claims, losses, damages, expenses and liabilities arising from any
action or failure to act, except when the same is determined by the Board of Directors to be due to
gross negligence or willful misconduct of such member.

     12.9 Claims Procedure: The Committee shall make all determinations as to the right of any
person to a benefit. Any denial by the Committee of the claim for benefits under the Plan by a
Participant or beneficiary shall be stated in writing by the Committee and delivered or mailed to
the Participant or beneficiary. Such notice shall set forth the specific reasons for the denial,
written in a manner that may be understood without legal or actuarial counsel. In addition, the
Committee shall afford a reasonable opportunity to any Participant or beneficiary whose claim for
benefits has been denied for a review of the decision denying the claim.

     Section 13. Funding of Retirement Benefits.

     13.1 Discretion of Committee on Form of Funding: The Plan is intended to be a funded plan for
purposes of ERISA, and is intended to be a permanent as distinguished from a temporary program.
Provided that the minimum funding standards of ERISA are met, the Committee shall have the
discretion to fund the payment of each Participant’s vested Retirement Benefit through one or more
of the following:

(a) making contributions on such Participant’s behalf to the Trust;

(b) purchasing a commercial annuity contract or contracts and, to the extent the
Committee deems advisable, transferring the annuity contract or contracts to such
Participant; or

(c) implementing any other funding method which the Committee, in its sole
discretion, shall consider appropriate.

     The Committee’s decision to use one method for funding one Participant’s Retirement Benefit
shall not in any way limit the Committee’s discretion to use any other method for funding another
Participant’s Retirement Benefit. Similarly, the Committee’s decision to use one method for
funding a portion of a particular Participant’s Retirement Benefit shall not

-15-

 

limit the Committee’s discretion with respect to the funding of the remainder of such
Participant’s Retirement Benefit. Moreover, the Committee shall have the discretion to change, to
the extent practicable, the method for funding any Participant’s Retirement Benefit. If at any
time a Participant’s Retirement Benefit is funded through one or more methods which do not require
the use of the Trust, all references herein to the Trust, the Trust Fund and the Trustee shall,
with respect to such Participant, be disregarded.

     13.2 Early Distribution: Under Section 13.1, the Committee may select a method of funding
that provides for distributions to be made to a Participant or beneficiary before the Annuity
Starting Date or the Survivor Annuity Starting Date, as the case may be; provided, however, that to
the extent ERISA requires the consent of the Participant, his spouse, a beneficiary, or any
combination thereof, to any such distribution, no distribution shall be made unless such consent or
consents have been given.

     13.3 Employee Contributions: Under Section 13.1, the Committee may select a method of funding
that permits Participants to make contributions to fund Retirement Benefits.

     13.4 Payment’s for Taxes: To the extent that the Committee’s funding of a Participant’s
Retirement Benefit pursuant to Section 13.1 results in adverse foreign (non-United States),
federal, state or local tax consequences to such Participant which would not have resulted if such
Participant’s Retirement Benefit had not been funded, the Committee may, in its discretion,
authorize the payment to such Participant, either by the Company or out of the Trust Fund, of an
amount sufficient to indemnify such Participant against some or all of such adverse tax
consequences.

     13.5 Overfunding of Benefits: The funding of Retirement Benefits under Section 13.1 is
intended solely to allow the Committee to establish a fund from which the Company’s liability to
pay Retirement Benefits to Participants may be satisfied, and not to increase in any way the
Retirement Benefit to which a Participant is entitled. Accordingly, to the extent the Committee
funds a Participant’s Retirement Benefit pursuant to Section 13.1 based on certain assumptions, but
the actual payments resulting from such funding would exceed such Participant’s Retirement Benefit
as determined under Section 6, the Committee may, in its discretion, reallocate the excess among
other Participants who are presently covered by the Plan or who may be so covered in the future.
The Company shall have no right, title or interest in or to amounts or assets used to fund
Retirement Benefits, and no part of any such amounts or assets shall revert to the Company except
that any amounts or assets remaining, because of overpayments, after satisfaction of all
liabilities of the Plan with regard to Participants may revert to the Company. Any amounts or
assets contributed to fund Retirement Benefits under a mistake of fact shall be returned to the
Company, to the extent practicable, upon request within one (1) year after such funding.

     13.6 Underfunded Benefits: The Committee’s funding of some or all of a Participant’s
Retirement Benefit under Section 13.1 shall not reduce the Company’s liability to provide to a
Participant the Retirement Benefit to which he is entitled under Section 6; provided, however, that
if as a result of the funding method adopted by the Committee any

-16-

 

Participant or his beneficiary (i) receives any distribution of cash from the Trust or any
other entity prior to the Annuity Starting Date or the Survivor Annuity Starting Date, as the case
may be, and (ii) fails to recontribute the after-tax amount of such distribution (as defined in the
following sentence) in order to fund a portion of such Participant’s Retirement Benefit, then the
Committee may reduce such Participant’s Retirement Benefit by the sum of such after-tax amounts not
recontributed and the investment income the Trust would have earned thereon. For purposes of this
Section 13.6, the after-tax amount of a distribution shall be the amount of such distribution
reduced by the amount of any federal, state and local taxes incurred by the Participant because of
such distribution; provided, however, that no such reduction will be made to the extent that the
Participant receives a payment from the Company indemnifying him for such taxes.

     Section 14. Trust Fund.

     14.1 Trust Agreement: As a part of the Plan, the Company may enter into a Trust Agreement
under which the Trustee would receive contributions of the Company to the Trust Fund. The
provisions of and benefits under the Plan are subject to the terms and provisions of such Trust
Agreement.

     14.2 Contributions to the Trust Fund: Subject to Section 13.4 hereof, no contribution shall
be required from any Participant. An individual account will be established in the Trust Fund for
each Participant whose Retirement Benefit is funded, in whole or in part, through the Trust.

     Section 15. Benefits of Retired Officers and Spouses of Deceased Officers.

     15.1 Funding of Benefits: The benefits payable to Officers who retired prior to the Effective
Date shall continue to be paid by the Company under the Plan provisions as they existed prior to
the Effective Date; provided, however, that on or before December 31, 1988, the Retirement Benefit
of each retired Officer shall be funded through the Trust; and, provided further, that effective
January 1, 1989, the Retirement Benefit of each retired officer will be recalculated under the
formulas set forth in Section 6 of the Plan. Each retired Officer will be given the right to
elect, within a time period to be set by the Committee, payment of the recalculated Retirement
Benefit in a lump sum or in the form of a Qualified Joint and Survivor Annuity or one of the
optional methods of payment specified in Section 9 of the Plan. If a retired Officer elects to
receive payment other than in a lump sum, the Committee will direct the Trustee to purchase an
annuity contract from the Trust Fund to fund the benefit. The benefit currently being paid to a
spouse of a deceased Officer shall remain the same except that (i) on or before December 31, 1988
the benefit payable to each such spouse shall be funded through the Trust and (ii) each such spouse
shall, within a reasonable time period to be set by the Committee, be allowed to elect to receive a
lump sum payment from the Trust or to continue to receive installment payments. If a surviving
spouse elects to continue to receive installment payments, the Committee will direct the Trustee to
purchase an annuity contract from the Trust Fund to fund the benefit.

-17-

 

     15.2 Underfunding of Benefits: The Committee’s funding of some or all of a retired officer’s
or surviving spouse’s benefit under Section 15.1 shall not reduce the Company’s liability to
provide such retired Officer or surviving spouse with the benefit to which he otherwise is
entitled.

     15.3 Payment for Taxes: To the extent the funding of a retired Officer’s or surviving
spouse’s benefit (either through the funding of the Trust or the purchase of an annuity) results in
adverse federal, state, or local tax consequences to such retired Officer or surviving spouse which
would not have resulted if such retired officer’s or surviving spouse’s benefit had not been
funded, the Committee may, in its discretion, authorize the payment to such retired officer or
surviving spouse, either by the Company or out of the Trust Fund, of an amount sufficient to
indemnify such retired officer or surviving spouse against some or all of such adverse tax
consequences.

     Section 16. Merger or Consolidation of Plan; Transfer of Assets. In the event of any
merger or consolidation of the Plan with another retirement or pension plan, or in the event of any
transfer of assets or liabilities from the Plan to another retirement or pension plan, provision
shall be made so that each Participant in the Plan on the date thereof (if the Plan then
terminated), would receive a benefit immediately after the merger, consolidation or transfer which
is equal to or greater than the benefit he would have been entitled to receive immediately prior to
the merger, consolidation or transfer (if the Plan had then terminated).

     Section 17. Amendments. The Board of Directors shall have the right at any time to
amend the Plan, the Trust Agreement and any other document entered into as a result of a funding
method adopted by the Committee under Section 13.1 hereof. However, no such amendment shall
authorize or permit any part of the Trust Fund or any other asset purchased or amount set aside to
fund Participants’ Retirement Benefits (other than such part as is required to pay administration
expenses) to be used for or diverted to purposes other than for the exclusive benefit of the
Participants, either current or future, or their beneficiaries or estates. No such amendment shall
cause any reduction in the vested accrued benefit of any Participant. The Company further reserves
the right to discontinue or suspend the payment of contributions to any fund held under the Trust
Agreement or under any other funding method adopted under Section 13.1 hereof.

     Section 18. Termination. The Board of Directors shall have the right to terminate
the Plan at any time. Upon termination the amount credited to the account of each Participant
shall become fully vested and shall not thereafter be subject to forfeiture. Upon termination of
the Plan, the Company, by written notice to the Trustee, may direct either:

(i) continuation of the Trust and the distribution of benefits at such time and in
such manner as though the Plan had not been terminated; or

(ii) complete distribution of the assets in the Trust Fund to the Participants in a
manner consistent with the Plan. In such case, the Trustee shall distribute to each
Participant in the Plan and to each retired Participant, the amount then

-18-

 

credited to his account in the Trust Fund, subject to provision for expenses of
administration or liquidation.

The balance, if any, of the assets due to erroneous actuarial computation held by the Trust Fund
after such distribution shall be returned to the Company, but only after satisfaction of all
liabilities with respect to Participants and Retirement Benefits under the Plan.

     Section 19. Miscellaneous.

     19.1 No Enlargement of Rights: The Plan is strictly a voluntary undertaking on the part of
the Company and shall not be deemed to constitute a contract between the Company and any Officer,
or to be consideration for, or an inducement to, or condition of, the employment of any Officer.
Nothing contained in the Plan shall be deemed to give any Officer the right to be retained in the
employment of the Company or to interfere with the right of the Company to discharge any Officer at
any time regardless of the effect which such discharge shall have upon him as a Participant of the
Plan. No officer, prior to his retirement under conditions of eligibility for retirement benefits
or prior to his acquiring vested rights, shall have any right or interest in or to any portion of
any funds arising from Company contributions under the Plan, and no person shall have any right to
Retirement Benefits, except to the extent provided in the Plan.

     19.2 Notice of Address: Each person entitled to benefits under the Plan must file with the
Committee, in writing, his post office address and each change of post office address. Any
communication, statement, or notice addressed to such a person at his latest post office address as
filed with the Committee will be binding upon such person for all purposes of the Plan, and neither
the Trustee nor the Company shall be obliged to search for or ascertain the whereabouts of any such
person.

     19.3 Data: All persons entitled to benefits under the Plan must furnish to the Committee or
Trustee such documents, evidence, or information as the Committee or Trustee considers necessary or
desirable for the purpose of administering the Plan, or to protect the Committee or Trustee, and it
shall be a condition of the Plan that each such person must furnish promptly true and complete
data, evidence, or information and sign such documents as the Committee or Trustee may require
before any benefits become payable under the Plan. In the event that any data so furnished is
found by the Company to be incorrect, any payments thereafter due shall be adjusted on an actuarial
basis to correct for any previous overpayments or underpayments, as the case may be. After such
adjustment is made, all future payments shall be based on the corrected data.

     19.4 Governing Law: The Plan shall be governed by and construed in accordance with ERISA and
the laws of the State of Illinois to the extent not preempted by ERISA.

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APPENDIX A

Actuarial Equivalence

     The purpose of this Appendix A is to specify the assumptions and tables to be used to
determine Actuarial Equivalence as provided in Section 1.1 thereof.

Section 1.1

     Except as specifically stated elsewhere in this Appendix A, Actuarial Equivalence shall be based on
the 1984 Unisex Pension Mortality Table as published, setback 2 years, and 6% interest.

Optional Payment Forms

     The normal form benefit (payable as a life annuity) is to be multiplied by the factor shown in the
table to obtain the reduced benefit payable under the applicable optional payment form.

1. Joint and Survivor Option Factors

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Joint Annuitant’s Age As	 	 	 	Percentage of Participant’s
	Related to Participant’s	 	 	 	Reduced Benefit Continued to
	Age	 	 	 	Joint Annuitant
	 	 	 	 	 
	 	 	50	%	 	 	75	%	 	 	100	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	5 or more years older	 	 
	 	 	.91	 	 	 	.87	 	 	 	.83	 
	Difference less than 5 years	 	 
	 	 	.87	 	 	 	.82	 	 	 	.77	 
	5, less than 10, younger	 	 
	 	 	.84	 	 	 	.78	 	 	 	.73	 
	10, less than 15, younger	 	 
	 	 	.82	 	 	 	.75	 	 	 	.69	 
	15, less than 20, younger	 	 
	 	 	.80	 	 	 	.72	 	 	 	.66	 
	20 or more years younger	 	 
	 	 	.76	 	 	 	.67	 	 	 	.60	 

Example: Participant is 65 years old with normal pension of $300 per month. He elects 50%
continuation for his wife, aged 62. Since the difference in age is less than five years, the
reduction factor is .87. The Participant receives $261.00 per month under the Option (.87 x $300),
and his wife will receive 50% of $261.00, or $130.00 per month, if she survives him. If the wife
were 57 years old (5 but less than 10 years younger than the Participant), the reduction factor
would be .84 instead of .87.

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2. Life — Ten Years Certain Option Factor

	 	 	 	 	 
	Retiree’s Age When	 	 
	Pension Payments Begin	 	Reduction Factor
	Age 66 & older
	 	 	.90	 
	Age 61 – 65
	 	 	.94	 
	Age 55 – 60
	 	 	.96	 

Example: Participant is 65 years with normal pension of $300 per month. The participant
receives $282.00 (.94 x $300) per month for his or her life. If the Participant becomes deceased
before 120 monthly payments are made, the beneficiary will receive $282.00 per month until the
total monthly payments to the Participant and the beneficiary equal 120. If the Participant would
have been age 60 rather than age 65, he or she would have received $288.00 monthly (.96 x $300).

3. Increase Factors for Postponed Retirement

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Age at	 	Increase	 	Age at	 	Increase
	Retirement	 	Factor	 	Retirement	 	Factor
	65
	 	 	1.00	 	 	 	70	 	 	 	1.55	 
	66
	 	 	1.09	 	 	 	71	 	 	 	1.69	 
	67
	 	 	1.19	 	 	 	72	 	 	 	1.84	 
	68
	 	 	1.30	 	 	 	73	 	 	 	2.00	 
	69
	 	 	1.42	 	 	 	74	 	 	 	2.17	 
	 
	 	 	 	 	 	 	75	 	 	 	2.35	 

Factors should be interpolated to completed months of age.

Lump Sum Cashout Amounts

For purposes of determining the present value of accrued benefits upon lump sum distribution,
Actuarial Equivalence shall be based on the 1984 Unisex Pension Mortality Table, as published ,
setback 2 years, and 6% interest.

-A2-

 

APPENDIX B

Early Retirement Open Window

     B-1. Purpose. The purpose of this Appendix B is to set forth the terms of a special
involuntary retirement benefit extended to certain Participants in the Plan by the Company. All
terms and provisions of the Plan shall apply to this Appendix B, except that where the terms and
provisions of the Plan and this Appendix B conflict, the terms and provisions of this Appendix B
shall control.

     B-2. Eligibility. Each Participant who is involuntarily retired (i) between January
1, 2002 and December 31, 2003 (inclusive) and (ii) after the Participant has attained age 57 years,
shall be eligible for benefits under this Appendix B; provided, that as a condition of receiving
such Appendix B Benefits, the Participant must execute a separation agreement (containing a
release) prepared by the Company prior to his retirement date. If an eligible Participant revokes
that separation agreement or the release contained therein, no Appendix B benefits shall be payable
to him nor shall additional Service be granted to him for vesting purposes under this Appendix B.
A Participant eligible for benefits under this Appendix B who timely executes (and does not revoke)
such separation agreement shall be known as an ‘Appendix B Participant.’

     B-3. Vesting. An Appendix B Participant who at his retirement date has not yet
completed sufficient Years of Service to be vested in accordance with Section 4 of the Plan, shall
be granted the amount of additional service credit necessary to be vested in his Retirement Benefit
hereunder at his retirement date.

     B-4. Appendix B Benefits. The benefit payable to an Appendix B Participant shall be
equal to the Retirement Benefit otherwise payable to such Participant under Sections 5, 6, and 7 of
the Plan, except that the actuarial reduction provided in Article 5 of the Plan for early
commencement of benefits prior to age 60, shall not apply.

-B1-

 

APPENDIX C

Amounts Accrued or Vested After December 31, 2004

     C-1. Purpose. The purpose of this Appendix C to the Motorola Elected Officers
Supplementary Retirement Plan is to clarify the treatment of Plan benefits accrued or vested on
or after January 1, 2005 (“Appendix C Benefits”). Appendix C Benefits are subject to the
provisions of Section 409A of the Internal Revenue Code, and this Appendix C shall at all times
be interpreted and administered so that it is consistent with such Internal Revenue Code
section.

     C-2. Funding. In lieu of the provisions set forth in Section 13 of the Plan,
Appendix C Benefits shall be funded by making a contribution on such Participant’s behalf to
the Trust as follows:

	 	(a)	 	When the Participant first becomes vested in Plan benefits, an
initial contribution shall be made to the Trust in the amount of an
estimated age 60 benefit paid in a lump sum and discounted back to the
later of age 55 or vesting age, using the following assumptions:

	 	•	 	The mortality factor used calculated based on the 1994
Uninsured Pensioners Mortality Table (Appendix D), with
generational projected improvements from 1994 using Scale AA
and a further mortality improvement factor of 0.837.
	 
	 	•	 	An interest rate of 7%.

	 	(b)	 	When the Participant retires, a final contribution shall be
made to the Trust in an amount equal to difference between (1) the
amount necessary to purchase an annuity from: MetLife, Inc. equal to
the Retirement Benefit attributable to the Participant’s Appendix C
Benefits, less (2) contributions previously made under Section C-2(a)
above (increased to include actual earnings on the contributions within
the Trust from the date of contribution to the date of the
Participant’s retirement); provided, however, that any contribution
under this Section C-2(b) made on behalf of a Specified Employee (as
defined in Internal Revenue Code Section 409A(a)(2)(B)(i)) on or after
his termination of employment shall not be made before the date that is
6 months after the Specified Employee’s termination of employment.

     C-3. Optional Form of Payment. With respect to any benefit funded per Section
C-2 above, in lieu of the form of payment described in Section 8 of the Plan, upon completion
of funding, a Participant may elect an optional form of payment in accordance with the
provisions of Section 9 of the Plan. Any such optional form of benefit must comply with
the provisions set forth in Treasury Regulation Section 409A-2(b)(2)(ii).

-C1-

 

     C-4. Disability. For purposes of determining whether a Participant’s retirement is due to
a Disability under this Appendix C, a Participant shall be “Disabled” if either (A) the
Participant’s inability to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, or (B) the Participant’s
receipt, by reason of any medically determinable physical or mental impairment which can be
expected to last for a continuous period of not less than 12 months, of income replacement benefits
for a period of not less than 3 months under the Motorola Disability Income Plan, as amended, or
any other accident and health plan covering employees of the Company.

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APPENDIX D

1994 Uninsured Pensioners Mortality Table

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Mortality Table	 	Projection Scale AA
	Age	 	M	 	F	 	M	 	F
	15
	 	 	0.000371	 	 	 	0.000233	 	 	 	0.019	 	 	 	0.016	 
	16
	 	 	0.000421	 	 	 	0.000261	 	 	 	0.019	 	 	 	0.015	 
	17
	 	 	0.000463	 	 	 	0.000281	 	 	 	0.019	 	 	 	0.014	 
	18
	 	 	0.000495	 	 	 	0.000293	 	 	 	0.019	 	 	 	0.014	 
	19
	 	 	0.000521	 	 	 	0.000301	 	 	 	0.019	 	 	 	0.015	 
	20
	 	 	0.000545	 	 	 	0.000305	 	 	 	0.019	 	 	 	0.016	 
	21
	 	 	0.000570	 	 	 	0.000308	 	 	 	0.018	 	 	 	0.017	 
	22
	 	 	0.000598	 	 	 	0.000311	 	 	 	0.017	 	 	 	0.017	 
	23
	 	 	0.000633	 	 	 	0.000313	 	 	 	0.015	 	 	 	0.016	 
	24
	 	 	0.000671	 	 	 	0.000313	 	 	 	0.013	 	 	 	0.015	 
	25
	 	 	0.000711	 	 	 	0.000313	 	 	 	0.010	 	 	 	0.014	 
	26
	 	 	0.000749	 	 	 	0.000316	 	 	 	0.006	 	 	 	0.012	 
	27
	 	 	0.000782	 	 	 	0.000324	 	 	 	0.005	 	 	 	0.012	 
	28
	 	 	0.000811	 	 	 	0.000338	 	 	 	0.005	 	 	 	0.012	 
	29
	 	 	0.000838	 	 	 	0.000356	 	 	 	0.005	 	 	 	0.012	 
	30
	 	 	0.000862	 	 	 	0.000377	 	 	 	0.005	 	 	 	0.010	 
	31
	 	 	0.000883	 	 	 	0.000401	 	 	 	0.005	 	 	 	0.008	 
	32
	 	 	0.000902	 	 	 	0.000427	 	 	 	0.005	 	 	 	0.008	 
	33
	 	 	0.000912	 	 	 	0.000454	 	 	 	0.005	 	 	 	0.009	 
	34
	 	 	0.000913	 	 	 	0.000482	 	 	 	0.005	 	 	 	0.010	 
	35
	 	 	0.000915	 	 	 	0.000514	 	 	 	0.005	 	 	 	0.011	 
	36
	 	 	0.000927	 	 	 	0.000550	 	 	 	0.005	 	 	 	0.012	 
	37
	 	 	0.000958	 	 	 	0.000593	 	 	 	0.005	 	 	 	0.013	 
	38
	 	 	0.001010	 	 	 	0.000643	 	 	 	0.006	 	 	 	0.014	 
	39
	 	 	0.001075	 	 	 	0.000701	 	 	 	0.007	 	 	 	0.015	 
	40
	 	 	0.001153	 	 	 	0.000763	 	 	 	0.008	 	 	 	0.015	 
	41
	 	 	0.001243	 	 	 	0.000826	 	 	 	0.009	 	 	 	0.015	 
	42
	 	 	0.001346	 	 	 	0.000888	 	 	 	0.010	 	 	 	0.015	 
	43
	 	 	0.001454	 	 	 	0.000943	 	 	 	0.011	 	 	 	0.015	 
	44
	 	 	0.001568	 	 	 	0.000992	 	 	 	0.012	 	 	 	0.015	 
	45
	 	 	0.001697	 	 	 	0.001046	 	 	 	0.013	 	 	 	0.016	 
	46
	 	 	0.001852	 	 	 	0.001111	 	 	 	0.014	 	 	 	0.017	 
	47
	 	 	0.002042	 	 	 	0.001196	 	 	 	0.015	 	 	 	0.018	 
	48
	 	 	0.002260	 	 	 	0.001297	 	 	 	0.016	 	 	 	0.018	 

-D1-

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Mortality Table	 	Projection Scale AA
	Age	 	M	 	F	 	M	 	F
	49
	 	 	0.002501	 	 	 	0.001408	 	 	 	0.017	 	 	 	0.018	 
	50
	 	 	0.002773	 	 	 	0.001536	 	 	 	0.018	 	 	 	0.017	 
	51
	 	 	0.003088	 	 	 	0.001686	 	 	 	0.019	 	 	 	0.016	 
	52
	 	 	0.003455	 	 	 	0.001864	 	 	 	0.020	 	 	 	0.014	 
	53
	 	 	0.003854	 	 	 	0.002051	 	 	 	0.020	 	 	 	0.012	 
	54
	 	 	0.004278	 	 	 	0.002241	 	 	 	0.020	 	 	 	0.010	 
	55
	 	 	0.004758	 	 	 	0.002466	 	 	 	0.019	 	 	 	0.008	 
	56
	 	 	0.005322	 	 	 	0.002755	 	 	 	0.018	 	 	 	0.006	 
	57
	 	 	0.006001	 	 	 	0.003139	 	 	 	0.017	 	 	 	0.005	 
	58
	 	 	0.006774	 	 	 	0.003612	 	 	 	0.016	 	 	 	0.005	 
	59
	 	 	0.007623	 	 	 	0.004154	 	 	 	0.016	 	 	 	0.005	 
	60
	 	 	0.008576	 	 	 	0.004773	 	 	 	0.016	 	 	 	0.005	 
	61
	 	 	0.009663	 	 	 	0.005476	 	 	 	0.015	 	 	 	0.005	 
	62
	 	 	0.010911	 	 	 	0.006271	 	 	 	0.015	 	 	 	0.005	 
	63
	 	 	0.012335	 	 	 	0.007179	 	 	 	0.014	 	 	 	0.005	 
	64
	 	 	0.013914	 	 	 	0.008194	 	 	 	0.014	 	 	 	0.005	 
	65
	 	 	0.015629	 	 	 	0.009286	 	 	 	0.014	 	 	 	0.005	 
	66
	 	 	0.017462	 	 	 	0.010423	 	 	 	0.013	 	 	 	0.005	 
	67
	 	 	0.019391	 	 	 	0.011574	 	 	 	0.013	 	 	 	0.005	 
	68
	 	 	0.021354	 	 	 	0.012648	 	 	 	0.014	 	 	 	0.005	 
	69
	 	 	0.023364	 	 	 	0.013665	 	 	 	0.014	 	 	 	0.005	 
	70
	 	 	0.025516	 	 	 	0.014763	 	 	 	0.015	 	 	 	0.005	 
	71
	 	 	0.027905	 	 	 	0.016079	 	 	 	0.015	 	 	 	0.006	 
	72
	 	 	0.030625	 	 	 	0.017748	 	 	 	0.015	 	 	 	0.006	 
	73
	 	 	0.033549	 	 	 	0.019724	 	 	 	0.015	 	 	 	0.007	 
	74
	 	 	0.036614	 	 	 	0.021915	 	 	 	0.015	 	 	 	0.007	 
	75
	 	 	0.040012	 	 	 	0.024393	 	 	 	0.014	 	 	 	0.008	 
	76
	 	 	0.043933	 	 	 	0.027231	 	 	 	0.014	 	 	 	0.008	 
	77
	 	 	0.048570	 	 	 	0.030501	 	 	 	0.013	 	 	 	0.007	 
	78
	 	 	0.053991	 	 	 	0.034115	 	 	 	0.012	 	 	 	0.007	 
	79
	 	 	0.060066	 	 	 	0.038024	 	 	 	0.011	 	 	 	0.007	 
	80
	 	 	0.066696	 	 	 	0.042361	 	 	 	0.010	 	 	 	0.007	 
	81
	 	 	0.073780	 	 	 	0.047260	 	 	 	0.009	 	 	 	0.007	 
	82
	 	 	0.081217	 	 	 	0.052853	 	 	 	0.008	 	 	 	0.007	 
	83
	 	 	0.088721	 	 	 	0.058986	 	 	 	0.008	 	 	 	0.007	 
	84
	 	 	0.096358	 	 	 	0.065569	 	 	 	0.007	 	 	 	0.007	 
	85
	 	 	0.104559	 	 	 	0.072836	 	 	 	0.007	 	 	 	0.006	 
	86
	 	 	0.113755	 	 	 	0.081018	 	 	 	0.007	 	 	 	0.005	 
	87
	 	 	0.124377	 	 	 	0.090348	 	 	 	0.006	 	 	 	0.004	 
	88
	 	 	0.136537	 	 	 	0.100882	 	 	 	0.005	 	 	 	0.004	 

-D2-

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Mortality Table	 	Projection Scale AA
	Age	 	M	 	F	 	M	 	F
	89
	 	 	0.149949	 	 	 	0.112467	 	 	 	0.005	 	 	 	0.003	 
	90
	 	 	0.164442	 	 	 	0.125016	 	 	 	0.004	 	 	 	0.003	 
	91
	 	 	0.179849	 	 	 	0.138442	 	 	 	0.004	 	 	 	0.003	 
	92
	 	 	0.196001	 	 	 	0.152660	 	 	 	0.003	 	 	 	0.003	 
	93
	 	 	0.213325	 	 	 	0.167668	 	 	 	0.003	 	 	 	0.002	 
	94
	 	 	0.231936	 	 	 	0.183524	 	 	 	0.003	 	 	 	0.002	 
	95
	 	 	0.251189	 	 	 	0.200229	 	 	 	0.002	 	 	 	0.002	 
	96
	 	 	0.270441	 	 	 	0.217783	 	 	 	0.002	 	 	 	0.002	 
	97
	 	 	0.289048	 	 	 	0.236188	 	 	 	0.002	 	 	 	0.001	 
	98
	 	 	0.306750	 	 	 	0.255605	 	 	 	0.001	 	 	 	0.001	 
	99
	 	 	0.323976	 	 	 	0.276035	 	 	 	0.001	 	 	 	0.001	 
	100
	 	 	0.341116	 	 	 	0.297233	 	 	 	0.001	 	 	 	0.001	 
	101
	 	 	0.358560	 	 	 	0.318956	 	 	 	0.000	 	 	 	0.000	 
	102
	 	 	0.376699	 	 	 	0.340960	 	 	 	0.000	 	 	 	0.000	 
	103
	 	 	0.396884	 	 	 	0.364586	 	 	 	0.000	 	 	 	0.000	 
	104
	 	 	0.418855	 	 	 	0.389996	 	 	 	0.000	 	 	 	0.000	 
	105
	 	 	0.440585	 	 	 	0.415180	 	 	 	0.000	 	 	 	0.000	 
	106
	 	 	0.460043	 	 	 	0.438126	 	 	 	0.000	 	 	 	0.000	 
	107
	 	 	0.475200	 	 	 	0.456824	 	 	 	0.000	 	 	 	0.000	 
	108
	 	 	0.485670	 	 	 	0.471493	 	 	 	0.000	 	 	 	0.000	 
	109
	 	 	0.492807	 	 	 	0.483473	 	 	 	0.000	 	 	 	0.000	 
	110
	 	 	0.497189	 	 	 	0.492436	 	 	 	0.000	 	 	 	0.000	 
	111
	 	 	0.499394	 	 	 	0.498054	 	 	 	0.000	 	 	 	0.000	 
	112
	 	 	0.500000	 	 	 	0.500000	 	 	 	0.000	 	 	 	0.000	 
	113
	 	 	0.500000	 	 	 	0.500000	 	 	 	0.000	 	 	 	0.000	 
	114
	 	 	0.500000	 	 	 	0.500000	 	 	 	0.000	 	 	 	0.000	 
	115
	 	 	0.500000	 	 	 	0.500000	 	 	 	0.000	 	 	 	0.000	 
	116
	 	 	0.500000	 	 	 	0.500000	 	 	 	0.000	 	 	 	0.000	 
	117
	 	 	0.500000	 	 	 	0.500000	 	 	 	0.000	 	 	 	0.000	 
	118
	 	 	0.500000	 	 	 	0.500000	 	 	 	0.000	 	 	 	0.000	 
	119
	 	 	0.500000	 	 	 	0.500000	 	 	 	0.000	 	 	 	0.000	 
	120
	 	 	1.000000	 	 	 	1.000000	 	 	 	0.000	 	 	 	0.000	 

-D3-exv10w35

 

EXHIBIT 10.35

EMPLOYMENT AGREEMENT

     AGREEMENT by and between Motorola, Inc. (the “Company”), and Edward J. Zander (the
“Executive”) dated as of the 15th day of December 2003, as amended as of the 19th day of February
2004, the 27th day of July, 2005, the 2nd day of May, 2006, and the 11th day of May, 2007.

     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the
best interests of the Company and its shareholders to employ the Executive as the Company’s Chief
Executive Officer and to have the Executive serve as Chairman of the Board;

     WHEREAS, the Company desires to employ the Executive and to enter into an agreement embodying
the terms of such employment; and

     WHEREAS, the Executive desires to enter into this Agreement and to accept such employment,
subject to the terms and provisions of this Agreement;

     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the receipt of which is mutually acknowledged, the Company
and the Executive (individually a “Party” and together the “Parties”) agree as follows:

     1. Effective Date. The “Effective Date” shall mean January 5, 2004.

     2. Employment Period. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to be employed by the Company, subject to the terms and conditions of this
Agreement, for the period commencing on the Effective Date and ending on the fifth anniversary
thereof (the “Initial Term”), provided that, on the fourth anniversary and each anniversary
of the Effective Date thereafter, the employment period shall be extended by one year unless at
least 30 days prior to such anniversary, the Company or the Executive delivers a written notice (a
“Notice of Non-Renewal”) to the other Party that the employment period shall not be extended (the
Initial Term as so extended, the “Employment Period”).

     3. Terms of Employment. (a) Position and Duties. (i) During the Employment
Period, (A) the Executive shall serve as the Chief Executive Officer, with such duties and
responsibilities as are commensurate with such positions, reporting directly to the Board, and (B)
the Executive’s principal location of employment shall be at the principal headquarters of the
Company; provided, that the Executive may be required under reasonable business
circumstances to travel outside of such location in connection with performing his duties under
this Agreement. In addition, the Company shall cause the Executive to be elected as Chairman of
the Board as of the Effective Date, and during the Employment Period, the Executive shall remain on
the Board and as Chairman of the Board, subject to Section 4(g), and shall perform his duties as a
director of the Company conscientiously and faithfully.

          (ii) The Executive agrees that during the Employment Period, he shall devote substantially all
of his business time, energies and talents to serving as the Company’s

 

Chief Executive Officer and
Chairman of the Board, perform his duties conscientiously and faithfully subject to the lawful
directions of the Board, and in accordance with each of the Company’s corporate governance and
ethics guidelines, conflict of interests policies and code of conduct (collectively, the “Company
Policies”). During the Employment Period, it shall not be a violation of this Agreement for the
Executive, subject to the requirements of Section 7, to (A) serve on corporate, civic or charitable
boards or committees, provided, that, without the written approval of the Board, the
Executive shall be permitted to serve on no more than one such corporate board, (B) deliver
lectures or fulfill speaking engagements and (C) manage personal investments, so long as such
activities do not interfere with the performance of the Executive’s responsibilities as the Chief
Executive Officer or as Chairman of the Board of the Company or violate any Company Policies.

          (iii) The Executive acknowledges and agrees that he shall at all times during his service with
the Company be subject to the Motorola Stock Ownership Requirements, as may be in effect from time
to time, which currently require that the Executive maintain holdings of the Company’s common stock
(“Common Stock”) in an amount at least equal to four times the Executive’s Annual Base Salary (as
defined below). In connection with such requirements, the Executive shall purchase 75,000 shares
of Common Stock on or prior to July 31, 2005, provided, that, 25,000 of such shares shall be
purchased on or prior to July 31, 2004 and another 25,000 of such shares shall be purchased on or
prior to January 31, 2005.

     (b) Compensation.

          (i) Base Salary. During the Employment Period, the Executive shall receive an
annualized base salary (“Annual Base Salary”) of not less than $1,500,000, payable pursuant to the
Company’s normal payroll practices. During the Employment Period, the current Annual Base Salary
shall be reviewed for increase only at such time as the salaries of senior officers of the Company
are reviewed generally, provided that, the Executive’s first such review shall occur no
earlier than calendar year 2005.

          (ii) Annual Bonus. For each fiscal year completed during the Employment Period, the
Executive shall be eligible to receive an annual cash bonus (“Annual Bonus”) based upon performance
targets that are established by the Compensation and Leadership Committee of the Board (the
“Committee”), provided that, the Executive’s target Annual Bonus shall be not less than
135% of his Annual Base Salary (the “Target Bonus”). Payment of the Target Bonus shall be
guaranteed for fiscal year 2004 (the “Guaranteed Bonus”). The Executive has agreed to defer
receipt of the Guaranteed Bonus pursuant to the terms of the Company’s Management Deferred
Compensation Plan until after the Executive’s Date of Termination (as defined below). However,
notwithstanding the immediately preceding sentence, the Executive shall not be required to defer
receipt of the Guaranteed Bonus beyond the first day on which the deductibility of the Guaranteed
Bonus by the Company is no longer precluded by the provisions of Section 162(m) of the Internal
Revenue Code of 1986, as amended (the “Code”), and in no event shall the Executive be required to
defer receipt beyond January 1 of the year following the year in which his Date of Termination (as
defined below) occurs.

          (iii) Mid-Range Incentive Plan. For each multi-year period (as recommended by
management and determined by the Committee) completed during the Employment

-2-

 

Period, the Executive
shall be eligible to receive an award (“Mid-Range Incentive Plan Award”) based upon performance
targets that are established by the Committee, provided that, the Executive’s target
Mid-Range Incentive Plan Award shall be not less than 250% of his Annual Base Salary.

          (iv) Long-Term Incentive Awards. As determined by the Committee, the Executive shall
be eligible for grants of equity compensation awards under the Company’s long term incentive
compensation arrangements in accordance with the Company’s policies, as in effect from time to
time. Except for grants with respect to fiscal year 2004 as set forth below, all grants of equity
compensation awards shall be made in the discretion of the Committee based upon performance of the
Executive and the Company and the Company’s compensation philosophy.

     A. 2004 Stock Option. In May 2004, the Executive shall be granted an option
(the “2004 Stock Option”) to purchase a number of shares of common stock of the Company (the
“Common Stock”) for fiscal year 2004 pursuant to the Company’s Omnibus Incentive Plan of
2003 (the “Incentive Plan”) having an aggregate Black-Scholes value of $6,250,000. The
Black-Scholes value to be calculated under this Section 3(b)(iv)(A) shall be determined on
the 2004 Stock Option grant date in a manner consistent with the methodology used by Hewitt
Associates for valuing stock options granted to employees of its publicly traded clients
during the year 2003. The 2004 Stock Option shall have a per share exercise price equal to
the closing price of a share of Common Stock on the last trading day prior to the date of
grant as reported in the Wall Street Journal (the “Fair Market Value”), a ten-year term and
a vesting schedule such that the 2004 Stock Option will become exercisable in four equal
annual installments commencing on the first anniversary of the date of grant, provided that,
the Executive remains in the employ of the Company through each such date. Except as
specifically provided herein, the terms and conditions of the 2004 Stock Option shall be
subject to the terms of the Incentive Plan and the award agreement evidencing the grant of
the 2004 Stock Option, as provided to senior executives of the Company generally.

     B. 2004 Restricted Stock Units. In May 2004, the Executive shall be granted an
award of a number of restricted stock units (the “Restricted Stock Units”) based on shares
of Common Stock for fiscal year 2004 pursuant to the Incentive Plan equal to the quotient
obtained by dividing (i) $2,000,000 by (ii) the Fair Market Value on the date of grant. The
Restricted Stock Units shall vest 10% on the first anniversary of the date of grant, 20% on
the second anniversary of the date of grant, 30% on the third anniversary of the date of
grant and 40% on the fourth anniversary of the date of grant, provided that, the
Executive remains in the employ of the Company through each such date. The Executive has
agreed to defer receipt of the settlement of any Restricted Stock Units until the later of
(i) the first day on which the deductibility of the settlement by the Company is no longer
precluded by the provisions of Section 162(m) of the Code, or (ii) the six-month anniversary
of the date of the Executive’s Separation from Service (as defined in Section
409A(a)(2)(A)(i) of the Code), if deferral to such anniversary date is required to comply
with the provisions of Section 409A of the Code. Except as specifically provided herein, the terms and conditions of the Restricted Stock Units
shall be subject to the terms of the Incentive Plan and the award agreement evidencing the
grant of the Re-

-3-

 

stricted Stock Units, as provided to senior executives of the Company
generally. Notwithstanding anything in this Section 3(b)(iv)(B) to the contrary, the
Executive shall be entitled to immediate settlement of any outstanding Restricted Stock
Units to the extent such Restricted Stock Units are required to be included in the
Executive’s income pursuant to Section 409A of the Code.

     C. Effective Date Stock Option. On the Effective Date, the Company shall grant
to the Executive a stock option pursuant to the Incentive Plan to purchase 1,350,000 shares
of Common Stock (the “Effective Date Stock Option”). The Effective Date Stock Option shall
have a per share exercise price equal to the Fair Market Value on the Effective Date, a
ten-year term and will vest in four equal annual installments commencing on the first
anniversary of the date of grant, provided that, the Executive remains in the employ
of the Company through each such date. Except as specifically provided herein, the terms
and conditions of the Effective Date Stock Option shall be subject to the terms of the
Incentive Plan and the award agreement evidencing the grant of the Effective Date Stock
Option, as provided to senior executives of the Company generally.

     D. Effective Date Restricted Stock Units. On the Effective Date, the Company
shall grant to the Executive 400,000 Restricted Stock Units under the Incentive Plan (the
“Effective Date Restricted Stock Units”). The restrictions with respect to the Effective
Date Restricted Stock Units shall lapse 50% on the second anniversary of the Effective Date
and the remainder shall lapse on the fourth anniversary of the Effective Date,
provided that, the Executive remains in the employ of the Company through each such
date. The Executive has agreed to defer receipt of the settlement of any Effective Date
Restricted Stock Units until the later of (i) the first day on which the deductibility of
the settlement by the Company is no longer precluded by the provisions of Section 162(m) of
the Code, or (ii) the six-month anniversary of the date of the Executive’s Separation from
Service, if deferral to such anniversary date is required to comply with the provisions of
Section 409A. Except as specifically provided herein, the terms and conditions of the
Effective Date Restricted Stock Units shall be subject to the terms of the Incentive Plan
and the award agreement evidencing the grant of the Effective Date Restricted Stock Units,
as provided to senior executives of the Company generally. Notwithstanding anything in this
Section 3(b)(iv)(D) to the contrary, the Executive shall be entitled to immediate settlement
of any outstanding Restricted Stock Units to the extent such Restricted Stock Units are
required to be included in the Executive’s income pursuant to Section 409A of the Code.

          (v) Pension Plans. During the Employment Period, the Executive shall be eligible for
participation in the qualified pension plans, practices, policies and programs of the Company, as
may be in effect from time to time, for senior executives of the Company generally.

          (vi) Other Benefits. During the Employment Period, the Executive shall be eligible
for participation in the welfare, perquisites, fringe benefit, and other benefit
plans, practices, policies and programs, as may be in effect from time to time, for senior
executives of the Company generally; provided, that, any severance payments or benefits to be
received under any severance benefit plans, practices, policies and programs shall be offset and

-4-

 

reduced by any severance benefits or payments received under this Agreement. The fringe benefits
and perquisites described in the preceding sentence shall include: reasonable use of Company
aircraft for personal and business purposes (not less than 100 flight hours annually for personal
use); participation in the Company’s Elected Officer Life Insurance Program; relocation benefits on
a tax-neutral basis (including, but not limited to, providing a suitable, furnished apartment to
the Executive for transition housing for up to 12 months); and, at the level generally provided for
the chief executive officer of the Company, financial planning; an automobile allowance; personal
security; and a home security system.

          (vii) Change in Control Benefits. The Executive shall be eligible for participation
in the Motorola, Inc. Senior Officer Change in Control Severance Plan or any successor change in
control plan or program (the “Change in Control Plan”), as may be in effect from time to time, for
senior executives of the Company generally. At all times during the Employment Period, the Company
will maintain the Change in Control Plan as in effect on the Effective Date, or provide the
Executive with no less favorable benefits and protection under an alternative program or
arrangement. Additionally, upon a Change in Control (as defined in the Change in Control Plan),
all equity-based awards granted to the Executive on or after the Effective Date (including, without
limitation, the 2004 Stock Option, the Restricted Stock Units, the Effective Date Stock Option and
the Effective Date Restricted Stock Units) shall become fully vested and exercisable (or, if
applicable, all restrictions shall lapse), all performance goals shall be deemed achieved at target
levels, all Performance Stock (as defined in the Incentive Plan) shall be delivered as promptly as
practicable and all performance units, restricted stock units and other incentive awards shall be
paid out as promptly as practicable; provided, however, that the treatment of outstanding awards
set forth above (referred to herein as “Accelerated Treatment”) shall not apply if and to the
extent that such awards are assumed by the successor corporation (or parent thereof) or are
replaced with awards that preserve the existing value of such awards at the time of the Change in
Control and provide for subsequent payout in accordance with the same vesting schedule applicable
to the original awards; provided, further, that with respect to any awards that are assumed or
replaced, such assumed or replaced awards shall provide for the Accelerated Treatment if the
Executive is involuntarily terminated (for a reason other than Cause) or if the Executive quits for
Good Reason within 24 months of the Change in Control; provided, further, that the Accelerated
Treatment shall not apply to any performance-based equity award granted on or after May 8, 2007, so
that the treatment of such award shall be determined solely under the terms of such award
agreement). Notwithstanding the foregoing, if the Company adopts an equity incentive plan with
Change in Control benefits more generous than the benefits provided in this Section 3(b)(vii) or a
Change in Control severance plan for senior executives generally with more generous benefits than
the Change in Control Plan, the Executive will be entitled to those more generous benefits to the
extent Executive’s awards are granted under such plan or such Change in Control severance plan is
adopted, as applicable.

          (viii) Expenses. During the Employment Period, the Executive shall be eligible for
prompt reimbursement for business expenses reasonably incurred by the Executive in
accordance with the Company’s policies, as may be in effect from time to time, for its senior
executives generally.

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          (ix) Vacation. During the Employment Period, the Executive shall be eligible for paid
vacation in accordance with the Company’s policies, as may be in effect from time to time, for its
senior executives generally.

          (x) Signing Bonus. In connection with the replacement of outstanding amounts at his
current employer that will be forfeited, on the Effective Date, the Company shall pay to the
Executive a lump sum cash payment of $600,000. In addition, on the Effective Date, the Company
shall grant to the Executive the number of restricted shares of Company Common Stock under the
Incentive Plan (the “Effective Date Restricted Stock”) determined by dividing (a) $1,400,000 by (b)
the per-share fair market value of Company Common Stock as of the close of market on the Effective
Date, rounded up to the nearest whole share. The restrictions with respect to the Effective Date
Restricted Stock shall lapse 100% on the second anniversary of the Effective Date, provided
that, the Executive remains in the employ of the Company through such date. Except as specifically
provided herein, the terms and conditions of the Effective Date Restricted Stock shall be subject
to the terms of the Incentive Plan and the award agreement evidencing the grant of the Effective
Date Restricted Stock, as provided to senior executives of the Company generally.

     (c) Other Entities. The Executive agrees to serve, without additional compensation,
as an officer and director for each of the Company’s subsidiaries, partnerships, joint ventures,
limited liability companies and other affiliates, including entities in which the Company has a
significant investment (collectively, the Company and such entities, the “Affiliated Group”), as
determined by the Company. As used in this Agreement, the term “affiliates” shall include any
entity controlled by, controlling, or under common control with the Company.

     4. Termination of Employment. (a) Death or Disability. The Executive’s
employment shall terminate automatically upon the Executive’s death during the Employment Period.
If the Company determines in good faith that the Disability of the Executive has occurred during
the Employment Period (pursuant to the definition of Disability set forth below), it may provide
the Executive with written notice in accordance with Section 9(b) of this Agreement of its
intention to terminate the Executive’s employment. In such event, the Executive’s employment with
the Company shall terminate effective on the 30th day after receipt of such notice by the Executive
(the “Disability Effective Date”), provided that, within the 30-day period after such
receipt, the Executive shall not have returned to full time performance of the Executive’s duties.
For purposes of this Agreement, “Disability” shall mean the inability of the Executive to perform
his duties with the Company on a full-time basis for 120 consecutive days or for 180 intermittent
days in any one-year period as a result of incapacity due to mental or physical illness which is
determined to be total and permanent by a licensed physician selected by the Company or its
insurers and reasonably acceptable to the Executive or the Executive’s legal representative. If
the Parties cannot agree on a licensed physician, each Party shall select a licensed physician and
the two physicians shall select a third who shall be the approved licensed physician for this
purpose.

     (b) Cause. The Company may terminate the Executive’s employment during the Employment
Period with or without Cause. For purposes of this Agreement, “Cause” shall mean:

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          (i) the Executive’s willful and continued failure to substantially perform his duties under
this Agreement, other than any such failure resulting from incapacity due to physical or mental
illness, which failure has continued for a period of at least 30 days following delivery to the
Executive of a written demand for substantial performance specifying the manner in which the
Executive has failed to substantially perform; or

          (ii) the Executive’s willful engagement in (A) in any malfeasance, dishonesty or fraud that is
intended to or does result in the Executive’s substantial personal enrichment or a material
detrimental effect on the Company’s reputation or business; or (B) gross misconduct;

          (iii) the Executive’s indictment for, or plea of guilty or nolo contendere to (A) a felony in
the United States or (B) to a felony outside the United States, which, regardless of where such
felony occurs, the Board reasonably believes has had or will have a detrimental effect on the
Company’s reputation or business or the Executive’s reputation; or

          (iv) the Executive’s material breach of Section 7 or Section 12 of this Agreement.

A termination of employment of the Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership of the Board (not including
the Executive) at a meeting of the Board called and held for such purpose (after at least ten days’
written notice is provided to the Executive and the Executive is given an opportunity, together
with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board,
the Executive is guilty of the conduct described in one or more of the clauses of Section 4(b)
above, and specifying the particulars thereof in detail.

     (c) Good Reason. The Executive’s employment may be terminated by the Executive for
Good Reason if (x) an event or circumstance set forth in the clauses of this Section 4(c) below
shall have occurred and the Executive provides the Company with written notice thereof within 15
days after the Executive has knowledge of the occurrence or existence of such event or
circumstance, which notice shall specifically identify the event or circumstance that the Executive
believes constitutes Good Reason, (y) the Company fails to correct the circumstance or event so
identified within 30 days after the receipt of such notice, and (z) the Executive resigns within 90
days after the date of delivery of the notice referred to in clause (x) above. For purposes of
this Agreement, “Good Reason” shall mean, in the absence of the Executive’s written consent (and
except in consequence of a prior termination of the Executive’s employment), the occurrence of any
of the following:

          (i) a reduction by the Company in the Executive’s Annual Base Salary or a reduction in the
Executive’s Target Bonus as a percentage of the Executive’s Annual Base Salary; or

          (ii) a material reduction in the aggregate level of employee benefits made available to the
Executive when compared to the benefits made available to the Executive

-7-

 

at any time during the
Employment Period, unless such reduction is applicable to senior executives of the Company
generally; or

          (iii) the failure of the Executive to be appointed as Chief Executive Officer or Chairman of
the Board or, except as required by applicable law or regulation, his removal from either of such
positions (other than pursuant to Section 4(g) or pursuant to a termination of the Executive’s
employment for death, Disability or Cause); or

          (iv) the failure of the Company to elect or reelect the Executive to the Board; or

          (v) a material diminution in the Executive’s duties or responsibilities (other than as
required by applicable law or regulation or as a result of the Executive’s physical or mental
incapacity which impairs his ability to materially perform his duties or responsibilities as
confirmed by a doctor reasonably acceptable to the Executive or his representative and such
diminution lasts only for so long as such doctor determines such incapacity impairs the Executive’s
ability to materially perform his duties or responsibilities) as Chief Executive Officer of the
Company; or

          (vi) except as required by applicable law or regulation, a material change in the Executive’s
reporting relationship so that the Executive no longer reports solely to the Board in his position
as Chief Executive Officer; or

          (vii) the Company requiring the Executive’s principal location of employment to be at any
office or location more than 35 miles from the principal headquarters of the Company (other than to
the extent agreed to or requested by the Executive).

     (d) Voluntary Termination. The Executive may voluntarily terminate his employment
without Good Reason (other than due to death, Disability or retirement), and such termination shall
not be deemed to be a breach of this Agreement.

     (e) Notice of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of Termination to the other Party hereto
given in accordance with Section 9(b) of this Agreement. For purposes of this Agreement, a “Notice
of Termination” means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated and (iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination date (which date shall be not
more than thirty days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such
fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

     (f) Date of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for Good Reason, the

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date of
receipt of the Notice of Termination or any later date specified therein within 30 days of such
notice, as the case may be, (ii) if the Executive’s employment is terminated by the Company other
than for Cause or Disability, or if the Executive voluntarily resigns without Good Reason, the date
on which the terminating Party notifies the other Party of such termination, (iii) if the
Executive’s employment is terminated by reason of death, the date of death of the Executive, (iv)
if the Executive’s employment is terminated by the Company due to Disability, the Disability
Effective Date, or (v) if the Executive’s employment is terminated by the Executive or the Company
as a result of a Notice of Non-Renewal, the end of the applicable Employment Period.

     (g) Resignation from All Positions. Notwithstanding any other provision of this
Agreement, upon the termination of the Executive’s employment for any reason, unless otherwise
requested by the Board, the Executive shall immediately resign as of the Date of Termination from
all positions that he holds or has ever held with the Company and any other member of the
Affiliated Group (and with any other entities with respect to which the Company has requested the
Executive to perform services), including, without limitation, the Board and all boards of
directors of any member of the Affiliated Group. The Executive hereby agrees to execute any and
all documentation to effectuate such resignations upon request by the Company, but he shall be
treated for all purposes as having so resigned upon termination of his employment, regardless of
when or whether he executes any such documentation.

     5. Obligations of the Company upon Termination. (a) Good Reason; Other Than for
Cause. If, during the Employment Period, (1) the Company shall terminate the Executive’s
employment other than for Cause, death or Disability, or (2) the Executive shall terminate
employment for Good Reason:

          (i) the Company shall pay to the Executive in a lump sum in cash within 30 days (except as
specifically provided in Section 5(a)(i)(A)(3)) after the Date of Termination the aggregate of the
following amounts; provided that, part or all of such lump sum payment shall be deferred until the
six-month anniversary of the date of the Executive’s Separation from Service, if deferral to such
anniversary date is required to comply with the provisions of Section 409A of the Code:

     A. the sum of (1) the Executive’s Annual Base Salary and any accrued vacation pay
through the Date of Termination, (2) the Executive’s business expenses that are reimbursable
pursuant to Section 3(b)(viii) but have not been reimbursed by the Company as of the Date of
Termination, and (3) the Executive’s Annual Bonus for the fiscal year immediately preceding
the fiscal year in which the Date of Termination occurs if such bonus has been determined
but not paid as of the Date of Termination (at the time such Annual Bonus would otherwise
have been paid); and

     B. the amount equal to the product of (x) two and (y) the sum of (I) the Executive’s
Annual Base Salary and (II) the Target Bonus; and

          (ii) for two years after the Executive’s Date of Termination (the “Continuation Period”), the
Company shall continue medical and life insurance benefits to the Executive and, if applicable, the
Executive’s family at least equal to those that would have been pro-

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vided to them in accordance with
the plans, programs, practices and policies of the Company if the Executive’s employment had not
been terminated; provided, that the Executive continues to make all required contributions;
provided, however, that, if the Executive becomes re-employed with another employer
and is eligible to receive substantially equivalent health or life insurance benefits under another
employer-provided plan, the health benefits or life insurance described herein, whichever is
applicable, shall no longer be provided by the Company; and

          (iii) the 2004 Stock Option, the Effective Date Stock Option, the Restricted Stock Units, the
Effective Date Restricted Stock Units, the Effective Date Restricted Stock and all other
outstanding equity-based awards granted to the Executive on or after the Effective Date, (other
than any performance-based equity award granted on or after May 8, 2007, the treatment of which
shall be determined under the terms of such award agreement), shall continue to vest and, with
respect to stock options and other awards that are not immediately exercisable, become exercisable
pursuant to their respective terms on the applicable scheduled vesting dates, so long as the
Executive complies with the provisions of Section 7 of this Agreement and any other applicable
provisions of the applicable award agreement and the Incentive Plan (other than continued service).
Subject to the immediately preceding sentence, all such awards, (other than any performance-based
equity award granted on or after May 8, 2007, the treatment of which shall be determined under the
terms of such award agreement), shall remain exercisable by the Executive following vesting until
the earlier of (A) eighteen months following the later to occur of (x) the applicable vesting date
of such award or (y) the Executive’s Date of Termination or (B) the expiration of the scheduled
term of such award, as applicable; and

          (iv) to the extent not theretofore paid or provided, the Company shall timely pay or provide
to the Executive any other amounts or benefits required to be paid or provided or which the
Executive is eligible to receive under any plan, program, policy or practice or contract or
agreement (other than any severance plan, program, policy or practice or contract or agreement) of
the Company and its affiliates (such amounts and benefits, the “Other Benefits”) in accordance with
the terms and normal procedures of each such plan, program, policy or practice, based on accrued
benefits through the Date of Termination.

Except with respect to payments and benefits under Sections 5(a)(i)(A)(1), 5(a)(i)(A)(2) and
5(a)(iv), all payments and benefits to be provided under this Section 5(a) shall be subject to the
Executive’s execution and non-revocation of a release substantially in the form attached hereto as
Exhibit A.

     (b) Cause; Other than for Good Reason. If the Executive’s employment shall be
terminated for Cause or the Executive terminates his employment without Good Reason during the
Employment Period, or the Executive’s employment terminates by reason of either Party providing to
the other Party a Notice of Non-Renewal, this Agreement shall terminate without further obligations
to the Executive other than the obligation to pay or provide to the Executive an amount equal to
the amount set forth in clauses (1), (2) and (3) of Section 5(a)(i)(A) above, and the timely
payment or provision of the Other Benefits, in each case to the
extent theretofore unpaid, and provide to the Executive the opportunity to continue to
exercise outstanding equity awards, granted on or after the Effective Date, to the extent vested on
the date of such termination, pursuant to the provisions of the applicable award agreement.

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     (c) Death. If the Executive’s employment is terminated by reason of the Executive’s
death during the Employment Period, this Agreement shall terminate without further obligations to
the Executive’s legal representatives under this Agreement, other than the obligation to pay or
provide to the Executive’s beneficiaries an amount equal to the amount set forth in clauses (1),
(2) and (3) of Section 5(a)(i)(A) above, the vesting of each stock option (other than any
performance-based equity award granted on or after May 8, 2007, the treatment of which shall be
determined under the terms of such award agreement), restricted share and restricted stock unit
award that is outstanding as of the Date of Termination and continued exercisability of each stock
option by the Executive’s beneficiaries until the earlier of (i) one year after the Date of
Termination or (ii) the end of the scheduled term of such option (the “Stock Benefits”).

     (d) Disability. If the Executive’s employment is terminated by reason of the
Executive’s Disability during the Employment Period, this Agreement shall terminate without further
obligations to the Executive, other than the obligation to pay or provide to the Executive an
amount equal to the amount set forth in clauses (1), (2) and (3) of Section 5(a)(i)(A) above, the
provision of the Stock Benefits and the timely payment or provision of Other Benefits, including
any applicable disability benefits.

     6. Full Settlement. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement and such amounts shall not be reduced as a result of
a mitigation duty whether or not the Executive obtains other employment. To the extent permitted
by applicable law, the Company shall pay directly to the Executive all reasonable legal fees and
expenses reasonably incurred by the Executive in connection with the negotiation and preparation of
this Agreement, subject to a maximum of $50,000, and the Company shall reimburse the Executive for
all legal costs and expenses reasonably incurred (and documented in invoices) in connection with
any dispute under this Agreement, so long as the Executive prevails in such dispute on at least one
material issue. In addition, the Company shall indemnify and hold the Executive, harmless on an
after-tax basis, for any income tax, and all other applicable taxes imposed as a result of the
Company’s payment of any legal fees contemplated herein in connection with the preparation and
negotiation of this Agreement.

     7. Covenants.

     (a) Confidential Information. The Executive shall hold in a fiduciary capacity for
benefit of the Affiliated Group, all secret or confidential information, knowledge or data relating
to the Affiliated Group and its businesses (including, without limitation, any proprietary and not
publicly available information concerning any processes, methods, trade secrets, research or secret
data, costs, names of users or purchasers of their respective products or services, business
methods, operating procedures or programs or methods of promotion and sale) that the Executive
obtains during the Executive’s employment by the Affiliated Group that is not public knowledge
(other than as a result of the Executive’s violation of this Section 7(a)) (“Confidential
Information”). The Executive shall not communicate, divulge or disseminate Confidential
Information at any time during or after the Executive’s employment with the Affiliated Group,
except with prior written consent of the Company, or as otherwise required by law or legal process
or as such disclosure or use may be required in the course of the Executive performing his duties
and responsibilities as the Chief Executive Officer and Chairman of the Board of the Company.

-11-

 

Notwithstanding the foregoing provisions, if the Executive is required to disclose any such
confidential or proprietary information pursuant to applicable law or a subpoena or court order,
the Executive shall promptly notify the Company in writing of any such requirement so that the
Company or the appropriate member of the Affiliated Group may seek an appropriate protective order
or other appropriate remedy or waive compliance with the provisions hereof. The Executive shall
reasonably cooperate with the Affiliated Group to obtain such a protective order or other remedy.
If such order or other remedy is not obtained prior to the time the Executive is required to make
the disclosure, or the Company waives compliance with the provisions hereof, the Executive shall
disclose only that portion of the confidential or proprietary information which he is advised by
counsel in writing (either his or the Company’s) that he is legally required to so disclose. Upon
his termination of employment with the Company for any reason, the Executive shall promptly return
to the Company, all records, files, memoranda, correspondence, notebooks, notes, reports, customer
lists, drawings, plans, documents, and other documents and the like relating to the business of the
Affiliated Group or containing any trade secrets relating to the Affiliated Group or that the
Executive uses, prepares or comes into contact with during the course of the Executive’s employment
with the Company, and all keys, credit cards and passes, and such materials shall remain the sole
property of the Company and/or the Affiliated Group, as applicable. For purposes of the preceding
sentence, the term “trade secrets” shall have the meaning ascribed to it under the Illinois Trade
Secrets Act or, if such act is repealed, the Uniform Trade Secrets Act (on which the Illinois Trade
Secrets Act is based). The Executive agrees to represent in writing to the Company upon
termination of employment that he has complied with the foregoing provisions.

     (b) Non-Recruitment of Affiliated Group Employees. The Executive shall not, at any
time during the Restricted Period (as defined in this Section 7(b)), without the prior written
consent of the Company, directly or indirectly, solicit, recruit, or employ (whether as an
employee, officer, agent, consultant or independent contractor) any person who is or was at any
time during the 120 days prior to Executive’s termination of employment, an employee,
representative, officer or director of any member of the Affiliated Group and who possesses
confidential information of the Affiliated Group. Further, during the Restricted Period, the
Executive shall not take any action that could reasonably be expected to have the effect of
directly encouraging or inducing any person to cease their relationship with any member of the
Affiliated Group for any reason, except for terminations of employment in the ordinary course of
business. This Section 7(b) shall not apply to (i) recruitment of employees for the Affiliated
Group, (ii) the Executive’s personal administrative staff who perform secretarial-type functions or
(iii) the hiring of any person (in the absence of a solicitation or recruitment by the Executive)
unless (A) the person was one of the Executive’s direct reports, (B) the Executive had material or
frequent contact with such person in furtherance of the performance of the duties of such person or
the Executive, or (C) the Executive, prior to the Date of Termination, actively participated in the
recruitment or hiring of such person at the Company other than merely approving any of the terms of
such person’s employment. Additionally, a general employment advertisement by an entity of which
the Executive is a part will not constitute solicitation or recruitment. The
“Restricted Period” shall mean the period of the Executive’s employment with the Company and
its subsidiaries through the second anniversary of the Date of Termination for any reason.

     (c) No Competition — Solicitation of Business. During the Restricted Period, the
Executive shall not, either directly or indirectly, compete with the
business of the Company 

-12-

 

by (i) becoming an officer, agent, employee, partner or director of any other corporation, partnership or
other entity, or otherwise render services to or assist or hold an interest (except as a less than
3-percent shareholder of a publicly traded corporation or as a less than 5-percent shareholder of a
corporation that is not publicly traded) in any Competitive Business (as defined below), or (ii)
soliciting, servicing, or accepting the business of (A) any active customer of any member of the
Affiliated Group, or (B) any person or entity who is or was at any time during the previous twelve
months a customer of any member of the Affiliated Group, provided that such business is competitive
with any significant business of any member of the Affiliated Group. “Competitive Business” shall
mean any person or entity (including any joint venture, partnership, firm, corporation, or limited
liability company) that engages in any principal or significant business of the Company or any of
its subsidiaries as of the Date of Termination for any reason (or any material or significant
business being actively pursued as of the Date of Termination that the Company or any of its
subsidiaries enter during the Restricted Period).

     (d) Assistance. The Executive agrees that during and after his employment by the
Company, the Executive will assist the Affiliated Group in the defense of any claims, or potential
claims that may be made or threatened to be made against any member of the Affiliated Group in any
action, suit or proceeding, whether civil, criminal, administrative, investigative or otherwise (a
“Proceeding”), and will assist the Affiliated Group in the prosecution of any claims that may be
made by any member of the Affiliated Group in any Proceeding, to the extent that such claims may
relate to the Executive’s employment or the period of the Executive’s employment by the Company.
The Executive agrees, unless precluded by law, to promptly inform the Company if the Executive is
asked to participate (or otherwise become involved) in any Proceeding involving such claims or
potential claims. The Executive also agrees, unless precluded by law, to promptly inform the
Company if the Executive is asked to assist in any investigation (whether governmental or
otherwise) of any member of the Affiliated Group (or their actions), regardless of whether a
lawsuit has then been filed against any member of the Affiliated Group with respect to such
investigation. The Company agrees to reimburse the Executive for all of the Executive’s reasonable
out-of-pocket expenses associated with such assistance, including travel expenses and any
attorneys’ fees and shall pay a reasonable per diem fee for the Executive’s service. In addition,
the Executive agrees to provide such services as are reasonably requested by the Company to assist
any successor to the Executive in the transition of duties and responsibilities to such successor.
Any services or assistance contemplated in this Section 7(d) shall be at mutually agreed to and
convenient times.

     (e) Remedies. The Executive acknowledges and agrees that the terms of Section 7: (i)
are reasonable in geographic and temporal scope, (ii) are necessary to protect legitimate
proprietary and business interests of the Company in, inter alia, near permanent
customer relationships and confidential information. The Executive further acknowledges and agrees
that in addition to all other remedies at law and/or equity, (x) the Executive’s breach of the
provisions of Section 7 will cause the Company irreparable harm, which cannot be adequately
compensated by money damages, and (y) if the Company elects to prevent the
Executive from breaching such provisions by obtaining an injunction against the Executive,
there is a reasonable probability of the Company’s eventual success on the merits. The Executive
consents and agrees that if the Executive commits any such breach or threatens to commit any
breach, the Company shall be entitled to temporary and permanent injunctive relief from a court of
competent jurisdiction, in addition to, and not in lieu of, such other remedies as may be available
to the Company for such

-13-

 

breach, including the recovery of money damages. The Parties further
acknowledge and agree that the provisions of Section 7(a) below are accurate and necessary because
(A) this Agreement is entered into in the State of Illinois, (B) as of the Effective Date, Illinois
will have a substantial relationship to the Parties and to this transaction, (C) as of the
Effective Date, Illinois will be the headquarters state of the Company, which has operations
nationwide and has a compelling interest in having its employees treated uniformly within the
United States, (D) the use of Illinois law provides certainty to the Parties in any covenant
litigation in the United States, and (E) enforcement of the provision of this Section 7 would not
violate any fundamental public policy of Illinois or any other jurisdiction. If any of the
provisions of Section 7 are determined to be wholly or partially unenforceable, the Executive
hereby agrees that this Agreement or any provision hereof may be reformed so that it is enforceable
to the maximum extent permitted by law. If any of the provisions of this Section 7 are determined
to be wholly or partially unenforceable in any jurisdiction, such determination shall not be a bar
to or in any way diminish the Company’s right to enforce any such covenant in any other
jurisdiction.

     (f) The covenants in this Section 7 apply in the countries in which Executive has physically
been present performing work for the Company at any time during the two years preceding termination
of his employment.

     8. Successors. (a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive other than by will or the
laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s legal representatives. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.

     (b) The Company shall cause any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all or a substantial portion of its business
and/or assets to assume expressly and agree to perform this Agreement immediately upon such
succession in the same manner and to the same extent that the Company would be required to perform
it if no such succession had taken place. As used in this Agreement, “Company” shall mean the
Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.

     9. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois, without reference to principles of conflict of laws. The
Parties hereto irrevocably agree to submit to the jurisdiction and venue of the courts of the State
of Illinois, in any action or proceeding brought with respect to or in connection with this
Agreement. The captions of this Agreement are not part of the provisions hereof and shall have no
force or effect. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the Parties hereto or their respective successors and legal
representatives.

     (b) All notices and other communications hereunder shall be in writing and shall be given by
hand delivery to the other Party or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

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If to the Executive:

At the most recent address on file for the Executive at the Company.

With a copy to:

Larry Sonsini, Esq.

John Aguirre, Esq.

Wilson Sonsini Goodrich & Rosati

650 Page Mill Road

Palo Alto, CA 94304

If to the Company:

Motorola, Inc.

1303 East Algonquin Road

Schaumberg, IL 60196

Attention: General Counsel

With a copy to:

Michael S. Katzke, Esq.

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

or to such other address as either Party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective when
actually received by the addressee.

     (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.

     (d) Notwithstanding any other provision of this Agreement, the Company may withhold from any
amounts payable or benefits provided under this Agreement any Federal, state, and local taxes as
shall be required to be withheld pursuant to any applicable law or regulation.

     (e) Subject to the provisions of Section 4(c), the Executive’s or the Company’s failure to
insist upon strict compliance with any provision of this Agreement or the
failure to assert any right the Executive or the Company may have hereunder, shall not be
deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

     (f) From and after the Effective Date, this Agreement shall supersede any other employment
agreement or understanding between the Parties, provided that, notwithstanding any other provision
of this Agreement to the contrary, in the event of a Change in Control (as

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defined in the Change in
Control Plan), the Change in Control Plan shall supersede this Agreement; provided, that, the
provisions in Section 3(b)(vii) will continue to apply.

     (g) The Company may not issue a press release or otherwise publicly disclose the Executive’s
employment or potential employment with the Company without Executive’s consent as to the content
and timing of such disclosure, which approval shall not be unreasonably withheld.

     10. Director’s and Officer’s Insurance. The Company shall provide the Executive with
reasonable Director’s and Officer’s insurance coverage that is at least as favorable as the
coverage provided to other directors and officers of the Company. Such insurance coverage shall
continue in effect both during the Employment Period and, while potential liability exists,
thereafter.

     11. Indemnification. The Company shall indemnify the Executive and hold him harmless
to the fullest extent permitted by law and under the by-laws of the Company against, and in respect
to, any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses (including
reasonable attorney fees), losses and damages resulting from the Executive’s good faith performance
of his duties and obligations with the Company.

     12. Representations. The Executive hereby represents and warrants to the Company that
the Executive is not party to any contract, understanding, agreement or policy, whether or not
written, with his current employer (or any other previous employer) or otherwise, that would be
breached by the Executive’s entering into, or performing services under, this Agreement. The
Executive further represents that he has disclosed to the Company in writing all material
threatened, pending, or actual claims that are unresolved and still outstanding as of the Effective
Date, in each case, against the Executive of which he is aware, if any, as a result of his
employment with his current employer (or any other previous employer) or his membership on any
boards of directors. Executive agrees that he has not, will not and cannot rely on any
representations not expressly made herein and the only consideration for signing this Employment
Agreement are the terms stated herein and no other promises or representations of any kind have
been made by any person or entity whatsoever to cause him to sign this Employment Agreement.

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     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization from its Board of Directors, the Company has caused these presents to be executed in
its name and on its behalf, all as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	/s/ Edward J. Zander	 	 
	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 	 	MOTOROLA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Samuel C. Scott III	 	 
	 	 	 	 	 	 	 
	 	 	Name: Samuel C. Scott III	 	 
	 	 	Chair, Compensation & Leadership Committee	 	 

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EXHIBIT A

Form of Release

     (a) In consideration for the payment of the severance described in the Executive employment
agreement with the Company (the “Employment Agreement”), dated as of [ ], the Executive for
himself, and for his heirs, administrators, representatives, executors, successors and assigns
(collectively “Releasers”) does hereby irrevocably and unconditionally release, acquit and forever
discharge the Company, its subsidiaries, affiliates and divisions and their respective, current and
former, trustees, officers, directors, partners, shareholders, agents, employees, consultants,
independent contractors and representatives, including without limitation all persons acting by,
through under or in concert with any of them (collectively, “Releasees”), and each of them from any
and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies,
damages, remedies, actions, causes of action, suits, rights, demands, costs, losses, debts and
expenses (including attorneys’ fees and costs) of any nature whatsoever, known or unknown, whether
in law or equity and whether arising under federal, state or local law and in particular including
any claim for discrimination based upon race, color, ethnicity, sex, age (including the Age
Discrimination in Employment Act of 1967), national origin, religion, disability, or any other
unlawful criterion or circumstance, which the Executive and Releasers had, now have, or may have in
the future against each or any of the Releasees, including under the Illinois Law Against
Discrimination (collectively “Executive/Releaser Actions”) from the beginning of the world until
the date hereof.

     (b) The Executive acknowledges that: (i) this entire Release is written in a manner
calculated to be understood by him; (ii) he has been advised to consult with an attorney before
executing this Release; (iii) he was given a period of twenty-one days within which to consider
this Release; and (iv) to the extent he executes this Release before the expiration of the
twenty-one day period, he does so knowingly and voluntarily and only after consulting his attorney.
The Executive shall have the right to cancel and revoke this Release by delivering notice to the
Company pursuant to the notice provision of Section 9 of the Employment Agreement prior to the
expiration of the seven-day period following the date hereof, and the severance benefits under the
Employment Agreement shall not become effective, and no payments or benefits shall be made or
provided thereunder, until the day after the expiration of such seven-day period (the “Revocation
Date”). Upon such revocation, this Release and the severance provisions of the Employment
Agreement shall be null and void and of no further force or effect.

     (c) Notwithstanding anything herein to the contrary, the sole matters to which the Release do
not apply are: (i) the Executive’s rights of indemnification and directors and officers liability
insurance coverage to which he was entitled immediately prior to ___with regard to his
service as an officer of the Company; (ii) the Executive’s rights under any tax-qualified pension
or claims for accrued vested benefits or rights under any other employee benefit plan, policy or
arrangement (whether tax-qualified or not) maintained by the Company or under COBRA; or (iii) the
Executive’s rights under Section 5 of the Employment Agreement which is intended to survive
termination of employment.

     (d) This Release is the complete understanding between the Executive and the Company in
respect of the subject matter of this Release and supersedes all prior agreements relating

 

to the same subject matter. The Executive has not relied upon any representations,
promises or agreements of any kind except those set forth herein in signing this Release.

     (e) In the event that any provision of this Release should be held to be invalid or
unenforceable, each and all of the other provisions of this Release shall remain in full force and
effect. If any provision of this Release is found to be invalid or unenforceable, such provision
shall be modified as necessary to permit this Release to be upheld and enforced to the maximum
extent permitted by law.

     (f) This Release shall be governed by and construed in accordance with the laws of the State
of Illinois, without reference to principles of conflict of laws.

     (g) This Release inures to the benefit of the Company and its successors and assigns.

	 	 	 
	 

	 	 
	 

	 	EXECUTIVE

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