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Exhibit 10.7
MOTOROLA AMENDED AND RESTATED INCENTIVE PLAN OF 1998
(AMENDED AND RESTATED AS OF JULY 31, 2001)
1. NAME AND PURPOSE
1.1 NAME. The name of this plan is the Amended and Restated Motorola
Incentive Plan of 1998 (the "Plan"). The Effective Date was May 4, 1998,
the date the Plan was approved by the stockholders of Motorola.
1.2 PURPOSE. Motorola has established the Plan to promote the interests of
Motorola and its stockholders by providing full and part-time employees of
Motorola or its subsidiaries with additional incentive to increase their
efforts on Motorola's behalf and to remain in the employ or service of
Motorola or its Subsidiaries and with the opportunity, through stock
ownership, to increase their proprietary interest in Motorola and their
personal interest in its continued success and progress.
2. ADMINISTRATION
The Plan will be administered by a Committee (the "Committee") of the
Motorola Board of Directors consisting of two or more directors as the
Board may designate from time to time, each of whom shall qualify as a
"Non-Employee Director" within the meaning set forth in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or any successor legislation. The Committee shall have the
authority to construe and interpret the Plan and any benefits granted
thereunder, to establish and amend rules for Plan administration, to change
the terms and conditions of options and other benefits at or after grant,
and to make all other determinations which it deems necessary or advisable
for the administration of the Plan. The determinations of the Committee
shall be made in accordance with their judgment as to the best interests of
Motorola and its stockholders and in accordance with the purposes of the
Plan. A majority of the members of the Committee shall constitute a quorum,
and all determinations of the Committee shall be made by a majority of its
members. Any determination of the Committee under the Plan may be made
without notice or meeting of the Committee, in writing signed by all the
Committee members. The Committee may delegate the administration of the
Plan, in whole or in part, on such terms and conditions as it may impose,
to such other person or persons as it may determine in its discretion.
3. SHARES AVAILABLE UNDER THE PLAN
The number of shares which may be issued or sold or for which Stock Options
and Stock Appreciation Right may be granted or received under the Plan,
shall be (i) 37,500,000 shares (as adjusted for the 3-for-1 stock split
effective June 1, 2000), plus (ii) the total number of shares with respect
to which no options have been granted under Motorola's Share Option Plan of
1996 on the Effective Date, plus (iii) the number of shares as to which
options granted under Motorola's Share Option Plan of 1996 terminate or
expire without being fully exercised. If
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there is a lapse, expiration, termination or cancellation of any stock
option issued under the Plan prior to the issuance of shares thereunder or
if shares of common stock are issued under the Plan and thereafter are
reacquired by Motorola, the shares subject to those options and the
reacquired shares shall be added to the shares available for benefits under
the Plan. In addition, any shares of common stock exchanged by an optionee
as full or partial payment to Motorola of the exercise price under any
stock option exercised under the Plan, any shares retained by Motorola
pursuant to a participant's tax withholding election, and any shares
covered by a benefit which is settled in cash shall be added to the shares
available for benefits under the Plan. Shares issued under the Plan may be
either authorized and unissued shares or issued shares reacquired by
Motorola. No Participant may receive (i) Stock Options relating to more
than 900,000 Shares (reflecting adjustment for the 3-for-1 stock split
effective June 1, 2000) in any Plan Year and (ii) Stock Appreciation Rights
relating to more than 150,000 shares (reflecting adjustment for the 3-for-1
stock split effective June 1, 2000) in any calendar year. The shares
reserved for issuance and the limitations set forth above shall be subject
to adjustment in accordance with Section 8 hereof. All of the available
shares may, but need not, be issued pursuant to the exercise of Incentive
Stock Options.
4. TYPES OF BENEFITS
Benefits under the Plan shall consist of Stock Options and Stock
Appreciation Rights as described below.
5. STOCK OPTIONS
Subject to the terms of the Plan, Stock Options may be granted to
participants, at any time as determined by the Committee. The Committee
shall determine the number of shares subject to each option and whether the
option is an Incentive Stock Option. The option price for each option shall
be determined by the Committee but shall not be less than 100% of the fair
market value of Motorola's common stock on the date the option is granted.
Each option shall expire at such time as the Committee shall determine at
the time of grant. Options shall be exercisable at such time and subject to
such terms and conditions as the Committee shall determine; provided,
however, that no option shall be exercisable later than the tenth
anniversary of its grant. The option price, upon exercise of any option,
shall be payable to Motorola in full by (a) cash payment or its equivalent,
(b) tendering previously acquired shares (held for at least six months)
having a fair market value at the time of exercise equal to the option
price, (c) certification of ownership of such previously-acquired shares,
(d) delivery of a properly executed exercise notice, together with
irrevocable instructions to a broker to promptly deliver to Motorola the
amount of sale proceeds from the option shares or loan proceeds to pay the
exercise price and any withholding taxes due to Motorola, and (e) such
other methods of payment as the Committee, at its discretion, deems
appropriate. In no event shall the Committee cancel any outstanding Stock
Option for the purpose of reissuing the option to the participant at a
lower exercise price or reduce the option price of an outstanding option.
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6. STOCK APPRECIATION RIGHTS
Subject to the terms of the Plan, Stock Appreciation Rights ("SARs") may be
granted to participants at any time as determined by the Committee. An SAR
may be granted in tandem with a Stock Option granted under this Plan or on
a free-standing basis. The grant price of a tandem SAR shall be equal to
the option price of the related option. The grant price of a free-standing
SAR shall be equal to the fair market value of Motorola's common stock on
the date of its grant. An SAR may be exercised upon such terms and
conditions and for the term as the Committee in its sole discretion
determines; provided, however, that the term shall not exceed the option
term in the case of a tandem SAR or ten years in the case of a free
standing SAR. Upon exercise of an SAR, the participant shall be entitled to
receive payment from Motorola in cash or stock, at the discretion of the
Committee, in an amount determined by multiplying the excess of the fair
market value of a share of common stock on the date of exercise over the
grant price of the SAR by the number of shares with respect to which the
SAR is exercised.
7. CHANGE IN CONTROL
Except as otherwise determined by the Committee at the time of grant of an
award, upon a Change in Control of Motorola, all outstanding benefits,
including Stock Options and SARs shall become vested and exercisable. A
"Change in Control" shall mean:
A Change in Control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act whether or not Motorola is then
subject to such reporting requirement; provided that, without
limitation, such a Change in Control shall be deemed to have occurred
if (a) any "person" or "group" (as such terms are used in Section
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Motorola representing 20% or more of the
combined voting power of Motorola's then outstanding securities (other
than Motorola or any employee benefit plan of Motorola; and, for
purposes of the Plan, no Change in Control shall be deemed to have
occurred as a result of the "beneficial ownership," or changes
therein, of Motorola's securities by either of the foregoing), (b)
there shall be consummated (i) any consolidation or merger of Motorola
in which Motorola is not the surviving or continuing corporation or
pursuant to which shares of common stock would be converted into or
exchanged for cash, securities or other property, other than a merger
of Motorola in which the holders of common stock immediately prior to
the merger have, directly or indirectly, at least a 65% ownership
interest in the outstanding common stock of the surviving corporation
immediately after the merger, or (ii) any sale, lease, exchange or
other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of Motorola
other than any such transaction with entities in which the holders of
Motorola Common Stock, directly or indirectly, have at least a 65%
ownership interest, (c) the stockholders of Motorola approve any plan
or proposal for the liquidation or dissolution of Motorola, or (d) as
the result of, or in connection with,
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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.
8 ADJUSTMENT PROVISIONS
(a) If Motorola shall at any time change the number of issued shares
of common stock by stock dividend or stock split, the total number of
shares reserved for issuance under the Plan, the maximum number of
shares which may be made subject to an award in any calendar year, and
the number of shares covered by each outstanding award and the price
therefore, if any, shall be equitably adjusted by the Committee, in
its sole discretion.
(b) Subject to the provisions of Section 7, without affecting the
number of shares reserved or available hereunder the Board of
Directors or the Committee may authorize the issuance or assumption of
benefits under this Plan in connection with any merger, consolidation,
acquisition of property or stock, or reorganization upon such terms
and conditions as it may deem appropriate.
(c) In the event of any merger, consolidation or reorganization of
Motorola with or into another corporation, other than a merger,
consolidation or reorganization in which Motorola is the continuing
corporation and which does not result in the outstanding common stock
being converted into or exchanged for different securities, cash or
other property, or any combination thereof, there shall be
substituted, on an equitable basis as determined by the Committee in
its discretion, for each share of common stock then subject to a
benefit granted under the Plan, the number and kind of shares of
stock, other securities, cash or other property to which holders of
common stock of Motorola will be entitled pursuant to the transaction.
9. NONTRANSFERABILITY
Each benefit granted under the Plan shall not be transferable
otherwise than by will or the laws of descent and distribution and
each Stock Option and SAR shall be exercisable during the
participant's lifetime only by the participant or, in the event of
disability, by the participant's personal representative. In the event
of the death of a participant, exercise of any benefit or payment with
respect to any benefit shall be made only by or to the executor or
administrator of the estate of the deceased participant or the person
or persons to whom the deceased participant's rights under the benefit
shall pass by will or the laws of descent and distribution.
Notwithstanding the foregoing, at its discretion, the Committee may
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permit the transfer of a Stock Option by the participant, subject to
such terms and conditions as may be established by the Committee.
10. TAXES
Motorola shall be entitled to withhold the amount of any tax attributable
to any amounts payable or shares deliverable under the Plan, after giving
the person entitled to receive such payment or delivery notice and Motorola
may defer making payment or delivery as to any award, if any such tax is
payable until indemnified to its satisfaction. The Committee may, in its
discretion, subject to such rules as it may adopt, permit a participant to
pay all or a portion of any required withholding taxes arising in
connection with the exercise of a Stock Option or SAR by electing to have
Motorola withhold shares of common stock, having a fair market value equal
to the amount to be withheld.
11. DURATION, AMENDMENT AND TERMINATION
No Incentive Stock Option or other benefit shall be granted more than ten
years after the date of original adoption of this Plan by the Board of
Directors; provided, however, that the terms and conditions applicable to
any benefit granted on or before such date may thereafter be amended or
modified by mutual agreement between Motorola and the participant, or such
other person as may then have an interest therein. The Board of Directors
or the Committee may amend the Plan from time to time or terminate the Plan
at any time. However, no such action shall reduce the amount of any
existing award or change the terms and conditions thereof without the
participant's consent. No amendment of the Plan shall be made without
stockholder approval if stockholder approval is required by law,
regulation, or stock exchange rule.
12. FAIR MARKET VALUE
The fair market value of Motorola's common stock at any time shall be
determined in such manner as the Committee may deem equitable, or as
required by applicable law or regulation.
13. OTHER PROVISIONS
(a) The award of any benefit under the Plan may also be subject to other
provisions (whether or not applicable to the benefit awarded to any other
participant) as the Committee determines appropriate, including provisions
intended to comply with federal or state securities laws and stock exchange
requirements, understandings or conditions as to the participant's
employment, requirements or inducements for continued ownership of common
stock after exercise or vesting of benefits, forfeiture of awards in the
event of termination of employment shortly after exercise or vesting, or
breach of noncompetition or confidentiality agreements following
termination of employment, or provisions permitting the deferral of the
receipt of a benefit for such period and upon such terms as the Committee
shall determine.
(b ) In the event any benefit under this Plan is granted to an employee who
is employed or providing services outside the United States and who is not
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compensated from a payroll maintained in the United States, the
Committee may, in its sole discretion, modify the provisions of the
Plan as they pertain to such individuals to comply with applicable
law, regulation or accounting rules.
14. GOVERNING LAW
The Plan and any actions taken in connection herewith shall be governed by
and construed in accordance with the laws of the state of Delaware (without
regard to applicable Delaware principles of conflict of laws).