Exhibit 10.1
As Amended November 23, 1993
MOTOROLA EXECUTIVE INCENTIVE PLAN, AS AMENDED
1. Purpose: The purpose of the Motorola Executive Incentive Plan, as
Amended (the "Plan") is to provide special incentive and reward to Motorola
employees who make substantial contributions to Motorola's success by their
exceptional service.
2. Definitions: For the purpose of the Plan, unless the context provides
otherwise:
a. The term "Company" shall mean and include Motorola, Inc. and all of
its subsidiaries.
b. The term "Employee" shall mean any employee of the Company, including,
but not limited to, the officers and directors of Motorola, Inc.
c. The term "Committee" shall mean the Compensation Committee of the
Board of Directors of Motorola, Inc.
d. The term "Grantee" shall mean any person who is an Employee of the
Company and has been or is eligible to be granted an award under the Plan.
3. Reserve for the Plan: The Company may, with respect to each fiscal year,
commencing with the fiscal year ending December 31, 1977, set up a reserve for
the purposes of the Plan, out of the Consolidated Net Earnings for such fiscal
year, as hereinafter defined. The amount of such reserve for each fiscal year
shall be determined as follows: a percentage not to exceed 7%, as may be
determined by the Committee, of such Consolidated Net Earnings which remains
after deducting therefrom an amount which (after allowing for United States
federal, state and other nations' income taxes based on rates applicable to the
income of the Company for such fiscal year) will equal five per centum (5%) of
the Average Capital Employed for such fiscal year, as hereinafter defined.
The term "Capital Employed" shall mean the consolidated net worth as
computed by Motorola, Inc. in accordance with generally accepted accounting
principles but without the deduction for the current year's reserve for the
Plan, plus long term debt (including the current portion thereof) plus short
term debt, less marketable securities, all as they may be classified as such
under generally accepted accounting principles on the same basis as employed in
preparation of the Company's audited and published financial statements.
The term "Average Capital Employed" for any fiscal year shall mean the
total of Capital Employed at the beginning of each fiscal month of such fiscal
year plus the Capital Employed at the end of the last fiscal month of such
fiscal year divided by the number of fiscal months included therein plus 1.
The term "Consolidated Net Earnings" for the fiscal year shall mean the
consolidated net earnings or profits of the Company, computed in accordance with
generally accepted accounting principles. The Consolidated Net Earnings shall
be adjusted so that there shall be no deductions for (a) the reserve for the
Plan, (b) the amount of the United States federal, state and other nations'
income taxes of the Company with respect to such fiscal year or (c) any
extraordinary charge against the consolidated net earnings or profits of the
Company, as determined by the Committee or it designee. The Company, however,
in computing Consolidated Net Earnings shall make a deduction for amounts paid
by the Company under Social Security and other laws having similar purposes.
The Company, likewise, shall make deductions of such amounts as are required
under generally accepted standard accounting practices for the purpose of
setting up reserves for losses on accounts and notes receivable, depreciation
and maintenance or for any other purposes provided such reserves are of the type
established in accordance with generally accepted accounting principles and
reflected in the Company's audited and published financial statements. In
computing the Consolidated Net Earnings and the Average Capital Employed in
respect of any fiscal year for the purpose of the reserve for the Plan, the
Board of Directors, the Committee and officers of Motorola, Inc. shall be
entitled to rely conclusively upon the computation of Consolidated Net Earnings
and Average Capital Employed as prepared and certified by a firm of independent
certified public accountants selected by the Board of Directors of Motorola,
Inc. for that purpose, which accountants may be the firm of independent
certified public accountants employed by Motorola, Inc. for any other purposes,
and such determination when made by independent certified public accountants, as
aforesaid, shall be binding upon all persons.
Nothing in the Plan shall be construed to obligate the Company to set up
any reserve for the Plan unless the Consolidated Net Earnings for the fiscal
year in question shall suffice therefor.
In the event that the Consolidated Net Earnings with respect to a fiscal
year shall not be sufficient to permit any reserve for the Plan, the failure of
the Company to set up a reserve for the Plan for such fiscal year shall not be
deemed to effect the termination of the Plan.
The Committee may in its sole and absolute discretion exclude the net worth
and net profit or loss of any subsidiary and/or affiliate in the calculation of
Average Capital Employed and Consolidated Net Earnings as provided aforesaid.
4. The Committee: The Committee shall have full power and authority to
construe, interpret, and administer the Plan, and each decision of the Committee
shall be final, conclusive, and binding upon all persons. Likewise, the
Committee shall have full discretion with respect to the determination of each
award. The Committee may grant awards which total the amount available in the
reserve for the Plan as determined by the independent certified public
accountants, plus the aggregate of (i) any part of the reserve for prior years
which is not awarded and which the Committee has returned to the reserve, (ii)
any unpaid portions of installments or deferred payments forfeited and (iii)
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any reserves established and accumulated but not awarded under the Plan from its
adoption in 1968 up to the date the Plan, as Amended, becomes effective, but the
Committee shall not be obliged to award the full amount so available to be
awarded. Recommendations for awards shall be made to the Committee by the
Chairman of the Board of Directors, by the Vice Chairman of the Board of
Directors, by the President and by the officers of Motorola, Inc. under such
procedures as may be prescribed by the Committee from time to time. Any part of
the reserve for the Plan that is not allocated to individual Employees of the
Company may, in the discretion of the Committee, be returned to earnings or
retained in the reserve for the Plan to be used for future awards to Employees
of the Company.
At the beginning of each fiscal year the Committee shall determine which of
the Company's key Employees will make substantial contributions to the Company's
success by their exceptional service and therefore participate in the Plan. The
Committee may grant awards from the reserve for the Plan to such other Employees
as the Committee in its sole and absolute discretion shall select. A person
whose employment terminates during the year or who is granted a leave of absence
during the year may, at the discretion of the Committee and under such rules as
the Committee may from time to time prescribe, receive an award.
5. Payment of Awards: Until the awards are paid to the Grantees as herein
provided, the unpaid awards shall be retained by the Company (without liability
for interest, unless interest is provided for by the Committee in accordance
with the provisions of this Section 5). The Committee may, in order to more
fully implement the purpose of the Plan, provide that any or all awards shall be
paid (a) in full at the time of the award, (b) in installments, (c) on a
deferred basis, in whole or in part, until some future date or dates specified
by the Committee or (d) upon the written request of a Grantee, on a deferred
basis, in whole or in part, until some future date or dates specified in the
request and agreed to by the Committee; provided however, that with respect to
awards deferred at the request of a Grantee as to any year, such request for
deferral shall be irrevocable as to such year, and provided further, that such
irrevocable written request must be received by the Committee on or before
December 31 of the year for which the award is payable. With respect to awards
not payable in full at the time of the award, the Committee shall have full
power and authority in its sole discretion to set all terms and conditions
relating thereto, including, but not limited to (i) the payment date or dates if
payment of the award is deferred by the Committee under (c) above or if the
award is payable in installments and (ii) the forfeiture provisions, if any,
which shall apply to awards deferred by the Committee under (c) above - it being
the intent that the forfeiture provisions contained in this Section 5 shall not
apply to awards deferred by the Committee under (c) above unless the Committee
expressly provides for their applicability as a term or condition of the
deferral and then they shall apply only to the extent so provided. The
Committee shall also have the power and authority to provide forfeiture
provisions with respect to awards it defers under (c) above which are different
from those contained in this Section 5 and forfeiture provisions with respect to
awards payable in installments or deferred at the request of a participant which
are additional to those
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contained in this Section 5. As to awards not payable in full at the time of
the award, the Committee may impose such terms, conditions, restrictions and
forfeitures with respect thereto as it shall determine to be in the best
interests of the Company and to effect the purposes of the Plan. The Committee
may provide that interest shall be paid out of the reserve on the amount of any
award payable in installments under (b) above, or deferred in whole or in part
by the Committee under (c) above, or deferred in whole or in part at the request
of any Grantee with the agreement of the Committee under (d) above. If the
Committee provides for the payment of interest with respect to any such award,
such interest shall be accrued as of the last day of each fiscal quarter of the
Company, shall be credited to an account which shall be established by the
Company in the name of the Grantee and shall be compounded as of the end of each
such fiscal quarter. Accumulated interest shall be distributed to the Grantee
at the time or times the award is paid out. In the case of awards payable in
installments and deferred awards which are not paid out in a single sum, the
interest to be distributed shall be proportionate to the amount of the award
being paid at the time. The rate of interest to be paid shall be set by the
Committee at the time of the grant of the award to which it relates. The
Committee is authorized to change the rate of interest at any time and to set
different rates for different Grantees and for differing circumstances.
If the Committee shall determine that the actions or conduct of a Grantee
have been in a manner adverse, or in any way contrary, to the best interests of
the Company, such Grantee shall lose any right to receive any portion of any
installment, or deferred payment, or amount that would otherwise have been paid
subsequent to the first of the month in which such act or conduct first
occurred, provided, however, that in no case shall the Grantee lose the right to
be paid the Grantee's unpaid awards or award, as the case may be, as of a date
prior to January 1 of the year in which the determination resulting in such loss
of right is made, and provided further, that no installment, deferred payment or
amount delivered or paid prior to the date of such determination shall be
required to be returned. The determination as to whether any act or conduct of a
Grantee is adverse or in any way contrary to the best interests of the Company
shall be made by the Committee under such procedure as may from time to time be
prescribed by the Committee and shall be made in the absolute discretion of the
Committee. Any determination so made, including any determination of the time
at which such act or conduct first occurred, shall be conclusive. The
provisions relating to forfeiture contained in this subparagraph shall not apply
to awards deferred by the Committee under clause (c) in the first subparagraph
of this Section 5 unless and to the extent specifically made applicable by the
Committee.
A Grantee whose employment terminates by dismissal for cause, as determined
by the Committee in its sole discretion, or who voluntarily terminates
employment with the Company or any of its subsidiaries shall, unless otherwise
determined by the Committee in connection with such termination of employment,
lose any right to receive any unpaid installments or deferred payments. A
Grantee whose employment terminates for any reason other than by death or as set
forth in the preceding sentence shall, unless
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otherwise determined in connection with the termination of the Grantee's
employment, continue to be paid any unpaid installments or deferred payments in
the same manner as though the Grantee's employment had continued without
interruption until such awards are fully paid. The provisions relating to
forfeiture contained in this subparagraph shall not apply to awards deferred by
the Committee under clause (c) in the first subparagraph of this Section 5
unless and to the extent specifically made applicable by the Committee.
If it shall be determined by the Committee that a Grantee who was permitted
to retain the right to receive any unpaid installments or deferred payments upon
termination of employment has, after such termination of employment, engaged,
directly or indirectly, in any activity which is in competition with any
activity of the Company or whose actions or conduct, either prior to or after
such termination of employment, has been in a manner adverse or in any way
contrary to the best interests of the Company, such Grantee shall, unless
otherwise determined, lose any right to receive any unpaid installments or
deferred payments as of the first of the month in which such competitive
activity or such act or conduct first occurred, provided, however, that in no
case shall the Grantee lose the right to receive any unpaid installments or
deferred payments as of a date prior to January 1 of the year in which the
determination resulting in such loss of right is made, and provided further,
that no installment or amount delivered or paid prior to the date of any such
determination shall be required to be returned. Each determination provided for
in this subparagraph shall be made by the Committee under such procedure as may
from time to time be prescribed by the Committee and shall be made in the
absolute discretion of the Committee. Any determination so made, including any
determination of the time at which such competitive activity or such act or
conduct first occurred, shall be conclusive. The provisions relating to
forfeiture contained in this subparagraph shall not apply to awards deferred by
the Committee under clause (c) in the first subparagraph of this Section 5
unless and to the extent specifically made applicable by the Committee.
A Grantee who loses the right to be paid any unpaid installments or
deferred payments shall receive forthwith all portions of such Grantee's awards,
unpaid but earned installments or deferred payments not otherwise forfeited in
accordance with this Section 5. The unpaid portions of installments or deferred
payments which are forfeited shall be credited to the reserve for the Plan.
If a Grantee dies, the Grantee's unpaid and undelivered awards shall be
paid and delivered to the beneficiary previously designated by such Grantee in
writing, or, if such Grantee did not designate any beneficiary in writing or if
all of the Grantee's designated beneficiaries predeceased the Grantee, to the
Grantee's legal representative at such time and in such manner as if such
Grantee were living and in service with the Company unless the Committee in its
sole and absolute discretion accelerates such payment and delivery.
Notwithstanding the foregoing provisions of this Section 5 or any of the
eligibility requirements of the Plan, in the event of a Change in Control, all
Grantees on the date of the Change in Control shall have a fully vested and
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nonforfeitable right to receive all amounts of awards which remain payable under
(b) above or which were previously deferred under (c) or (d) above, and no
amendment, suspension, curtailment or termination of the Plan shall adversely
affect or terminate such vested and nonforfeitable right to receive any award
granted under the Plan.
For purposes of the Plan, 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 Securities Exchange
Act of 1934, as amended ("Exchange Act") 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, any employee benefit plan of the Company,
any "person" who is a natural person and was shown as the "beneficial owner",
directly or indirectly, of securities of the Company representing more than 5%
of the combined voting power of the Company's securities in the Company's Proxy
Statement dated earlier than, but closest to, the date of this amendment of the
Plan; 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 any 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 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 an 80% 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, (C)
the stockholders of the Company approve any plan or proposal for the liquidation
or dissolution of the Company, or (D) as a 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 of Directors of
the Company), 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.
Furthermore, in the event a Grantee's employment with the Company
terminates within a year of a Change in Control, that Grantee shall receive an
award from the reserve for the year in which the Grantee's employment is
terminated. Such award shall be prorated from the first day of the fiscal year
in which the Grantee's employment is terminated up to the date of termination of
employment. This pro rata share of the award shall be paid within thirty days
after the date on which the Grantee's employment is terminated.
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A Grantee shall be entitled to a pro rata award if his or her employment
with the Company is terminated for any reason (including disability or
retirement) except: (a) when the relevant Change in Control occurs as a result
of a transaction or transactions initiated by the Company, other than a
transaction or transactions initiated by the Company in response to or otherwise
in connection with an unsolicited proposal to the Company which would result in
a Change in Control, or (b) the Company involuntarily terminates the Grantee's
employment with the Company or a subsidiary of the Company for good cause. For
purposes of the Plan, "good cause" means (a) the conviction of a Grantee of any
criminal violation involving dishonesty, fraud or breach of trust, or (b) the
Grantee's willful engagement in gross misconduct in the performance of his or
her duties that materially injures the Company.
6. Amount of Individual Awards: The Committee shall make the sole
determination of the amount of the awards to be made under the Plan, provided,
however, that the aggregate amount of all awards made under the Plan does not
exceed the aggregate amount in the reserve.
7. Nature of Grantee's Rights Under The Plan: Neither the adoption of the
Plan, nor any modification hereof, nor any payment hereunder, shall be construed
as giving to the Grantee or any person whomsoever any legal or equitable rights
against the Company or its officers or directors or as giving any Grantee the
right to be retained in the service of the Company or any of its subsidiaries.
No loan shall be made to any Grantee by the Company because one or more payments
might be made to the Grantee under the Plan. No Grantee shall have any right to
assign, transfer, appropriate, encumber, commute or anticipate any payment that
might be made to the Grantee under the Plan, and no benefits, rights or interest
of a Grantee under the Plan shall in any way be subject to any legal process to
levy upon, garnishee or attach the same for payment of any claim against the
Grantee, nor shall any Grantee have any right of any kind whatsoever under the
Plan other than the right to receive any payment as and when it is due and
payable under the terms of the Plan.
8. Administration of the Plan: The Committee shall keep and maintain records
and accounts which will accurately disclose at all times the reserve for the
Plan, if any, for each year during which the Plan is in effect, the awards made
by the Committee under the Plan, the payment or other disposition of these
awards, and any other pertinent information with respect to the activities of
the Committee.
The fiscal year of the Plan shall at all times be the same as the fiscal
year of the Company.
The Committee may consult with counsel, who may be of counsel to the
Company, and shall not incur any liability for any action taken in good faith in
reliance upon the advice of such counsel.
The expenses of administering the Plan shall be borne by the Company and
shall not be charged against the reserve for the Plan, if any.
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9. Indemnification and Exculpation: Each person who is or shall have been a
member of the Board of Directors of the Company or of the Committee shall be
indemnified and held harmless by the Company against and from any and all loss,
cost, liability or expense that may be imposed upon or reasonably incurred by
such person in connection with or resulting from any claim, action, suit or
proceeding to which such person may be a party or in which such person may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by such person in settlement thereof
(with the Company's written approval) or paid by such person in satisfaction of
a judgment in any such action, suit or proceeding, except a judgment based upon
a finding of such person's bad faith, subject, however, to the condition that
upon the institution of any claim, action, suit or proceeding against such
person, such person shall in writing give the Company an opportunity, at its own
expense, to participate in, and to the extent it may wish, to assume the defense
thereof before such person undertakes to handle it on such person's own behalf.
The foregoing right of indemnification shall not be exclusive of any other right
to which such person may be entitled as a matter of law or otherwise, or any
power that the Company may have to indemnify such person or hold such person
harmless.
Each member of the Board of Directors of the Company or of the Committee,
and each officer and employee of the Company shall be fully justified in relying
or acting upon any information furnished on behalf of the Company by any person
or persons other than himself or herself in connection with the administration
of the Plan. In no event shall any person who is or shall have been a member of
the Board of Directors of the Company or of the Committee, or any officer or
employee of the Company, be liable for any determination made or other action
taken or any omission to act in reliance upon any such information, or for any
action (including the furnishing of information) taken or any failure to act, if
in good faith.
10. Amendment of the Plan: The Plan may be amended from time to time by the
Board of Directors of the Company or the Committee and may be terminated at any
time by the Board of Directors of the Company.
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