EXHIBIT 10.32
MOTOROLA MID RANGE INCENTIVE PLAN (MRIP) OF 2003,
AS AMENDED
ELIGIBILITY
Senior and Executive Vice Presidents and other officers of Motorola, Inc.
("Motorola") or a Subsidiary, as recommended by the Chief Executive Officer and
approved by the Compensation and Leadership Committee of the Board of Directors
("Committee"), are eligible to participate in the Motorola Mid Range Incentive
Plan (MRIP) of 2003, as Amended (the "Plan"). The Chief Executive Officer and
the Chief Operating Officer (if any) are also eligible to participate as
approved by the Committee.
PARTICIPATION
Generally, officers who become eligible to participate during the first quarter
of a performance cycle will participate in a full two-year performance cycle.
The participation of officers who are promoted or newly hired after the first
quarter of a performance cycle shall be at the discretion of the Chief Executive
Officer.
OVERVIEW
The Plan is being implemented pursuant to the terms and conditions of the
Omnibus Incentive Plan of 2003 ("Omnibus Plan"). Here is an overview of the
Plan:
- - PERFORMANCE CYCLE
The Plan is based upon two-year performance cycles selected by the
Committee with the first performance cycle beginning on January 1, 2003.
- - PERFORMANCE MEASURES
Performance measures for each cycle will be determined by the Committee
based on cumulative improvement in economic profit and cumulative sales
growth during each two-year performance cycle of Motorola, Inc. Economic
profit is defined as net operating profit after tax minus a capital
charge.
Net operating profit after tax and sales for each year during a
performance cycle shall be determined in accordance with generally
accepted accounting principles but shall exclude the effect of all
acquisitions with a purchase price of $250 million or more, all gains or
losses on the sale of a business, any asset impairment equal to $100
million or more, and any other special items designated by the Committee.
- - MAXIMUM EARNED AWARD
A participant's maximum earned award will be two times his/her target
award. A participant's target award is established at the commencement of
a performance cycle based on a percentage of the participant's base pay in
effect at that time.
- - THE PAYOUT PROCESS
- All earned awards will be paid in cash. Payments will be made as
soon as administratively practicable following the close of a
performance cycle.
- A participant has no right to any award until that award is paid.
- If the Committee determines, in its sole discretion, that a
participant has engaged in any activity at any time, prior to the
payment of an award, that the Committee determines was, is, or will
be harmful to the Company, the participant will forfeit any unpaid
award.
SITUATIONS AFFECTING THE PLAN
- - CHANGE IN EMPLOYMENT
- Generally, a participant will be eligible for payment of an earned
award only if employment continues through the last day of the
performance cycle.
- Pro rata awards may be possible, however, depending upon the type of
the employment termination. The table below summarizes how earned
awards will generally be prorated in accordance with the type of
employment termination:
IF EMPLOYMENT TERMINATES DUE TO... THE EARNED AWARD WILL BE...
- ---------------------------------- ---------------------------
Death Pro rated award based on the number of completed months within the performance cycle the
participant actually was working.
Total and Permanent Disability Pro rated award based on the number of completed months within the performance cycle the
participant actually was working.
Retirement Pro rated award based on the number of completed months within the performance cycle the
participant actually was working.
Termination of Employment Because of Forfeited.
Serious Misconduct
Change in Employment in Connection Forfeited.
with a Divestiture
Termination of Employment for any Other Forfeited.
Reason than Described Above
- In the event a participant remains on payroll as an active employee
at the end of a performance cycle, but is not actually working,
whether or not on a Leave of Absence, the participant will be
entitled to a pro rata award based on the number of completed months
within the performance cycle in
-2-
which the participant was actually working, provided that the
participant is otherwise eligible for an award.
- A prorated payout will be based on final performance results and
paid as soon as administratively practicable after the end of a
performance cycle.
For purposes of the Plan, "Total and Permanent Disability" and
Retirement" will be defined as set forth below:
- TOTAL AND PERMANENT DISABILITY means for (x) U.S. employees,
entitlement to long-term disability benefits under the Motorola
Disability Income Plan, as amended and any successor plan and (y)
non-U.S. employees, as established by applicable Motorola policy or
as required by local regulations.
- RETIREMENT means retirement from Motorola or a Subsidiary as
follows:
(i) Retiring at or after age 55 with 20 years of service;
(ii) Retiring at or after age 60 with 10 years of service;
(iii) Retiring at or after age 65, without regard to years of
service;
(iv) Retiring with any other combination of age and service, at the
discretion of the Committee.
Years of service will be based on the participant's Service Club
Date.
- - CHANGE IN CONTROL
If Motorola undergoes a Change in Control as defined in the Omnibus Plan:
- The cumulative sales growth and cumulative economic profit
improvement will be determined as of the effective date of the
Change in Control.
- Pro rata award payments will be made based on the number of
completed months of the cycle as of the effective date of the Change
in Control.
- Awards will be paid in cash as soon as administratively practicable
following the effective date of the Change in Control.
DEFINITION OF TERMS
"Subsidiary" means an entity of which Motorola owns directly or indirectly at
least 50% and that Motorola consolidates for financial reporting purposes.
"Serious Misconduct" means any misconduct that is a ground for termination under
the Motorola Code of Business Conduct, or human resources policies, or other
written policies or procedures.
"Leave of Absence" means an approved leave that carries a right of return to
work at the end of the leave period.
If a term is used but not defined, it has the meaning given such term in the
Omnibus Plan.
-3-
RESERVATION AND RETENTION OF COMPANY RIGHTS
- The selection of any employee for participation in the Plan will not
give that participant any right to be retained in the employ of the
Company.
- Participation in the Plan is completely at the discretion of
Motorola, and Motorola's decision to make an award in no way implies
that similar awards may be granted in the future.
- Anyone claiming a benefit under the Plan will not have any right to
or interest in any awards unless and until all terms, conditions,
and provisions of Plan that affect that person have been fulfilled
as specified herein.
- No employee will at any time have a right to be selected for
participation in a future performance period for any fiscal year,
despite having been selected for participation in a previous
performance period.
GOVERNANCE
It is expressly understood that the Committee is authorized to administer,
construe, and make all determinations necessary or appropriate to the
administration of the Plan, all of which will be binding upon the participant.
AMENDMENT. MODIFICATION, AND TERMINATION
The Committee may amend, modify, or terminate the Plan and the terms applicable
to any performance cycle at any time; provided, however, that no such action may
adversely affect a participant's rights under the Plan subsequent to such time
as negotiations or discussions which ultimately lead to a Change in Control have
commenced.
MISCELLANEOUS PROVISIONS
- Award opportunities may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution.
- The Company will have the right to deduct from any or all payments
under the Plan amounts sufficient to satisfy all federal, state and
local withholding tax requirements.
- To the extent permitted by law, amounts paid under the Plan will not
be considered to be compensation for purposes of any benefit plan or
program maintained by the Company.
- All obligations of the Company under the Plan with respect to payout
of awards, and the corresponding rights granted thereunder, will be
binding on any successor to the Company, whether the existence of
such successor is the result of a direct or indirect purchase,
merger, consolidation, or other acquisition of all or substantially
all of the business and/or assets of the Company.
- In the event that any provision of the Plan will be held illegal or
invalid for any reason, the illegality or invalidity will not affect
the remaining
-4-
parts of the plan, and the Plan will be construed and enforced as if
the illegal or invalid provision had not been included.
- No participant or beneficiary will have any interest whatsoever in
any specific asset of the Company. To the extent that any person
acquires a right to receive payments under the Plan, such right will
be no greater than the right of any unsecured general creditor of
the Company.
- To the extent not preempted by federal law, the Plan, and all
agreements hereunder, will be construed in accordance with and
governed by the laws of the state of Illinois without giving effect
to the principles of conflicts of laws.
- This Plan constitutes a legal document which governs all matters
involved with its interpretation and administration and supersedes
any writing or representation inconsistent with its terms.
-5-