8-KMaterial AgreementsCorporate ChangesExhibits & Filings

Motorola Solutions, Inc. 8-K Report, Material Agreement (Feb 18, 2005)

Filed February 18, 2005For Securities:MSI

Summary

This 8-K filing from Motorola, Inc. (MSI) on February 17, 2005, primarily details significant executive compensation actions and changes to corporate governance. Key among these is the grant of 300,000 stock options to CEO Edward J. Zander, with an exercise price of $15.91, exercisable in installments starting in 2006 and expiring in 2015. Additionally, the filing outlines the approval of the 2005 Incentive Plan, designed to retain and reward employees based on performance, with awards paid in cash. Of significant note for investors is the detailed disclosure surrounding the separation of Mike S. Zafirovski, President and COO. This includes the terms of his separation agreement, which provides for continued salary through July 2005, extended benefits, and reimbursement for legal fees. Notably, Mr. Zafirovski receives a substantial separation allowance of $16,839,290, partly to compensate for forfeited retirement benefits from a prior employer. The agreement also specifies the terms for exercising his vested stock options and the vesting of certain restricted stock, while he forfeits unvested options and restricted stock.

Key Highlights

  • 1CEO Edward J. Zander granted 300,000 stock options at an exercise price of $15.91.
  • 2The 2005 Incentive Plan (MIP) was approved, focusing on retaining employees and rewarding performance with cash payouts.
  • 3President and COO Mike S. Zafirovski's separation agreement terms are disclosed, including continued salary and benefits.
  • 4Mr. Zafirovski will receive a separation allowance of $16,839,290, including a $4,000,000 lump sum payment.
  • 5Mr. Zafirovski's stock options and restricted stock terms upon separation are detailed, with forfeiture of unvested equity.
  • 6The Board of Directors amended the Amended and Restated Bylaws to provide more flexibility in how elected officer positions are determined.
  • 7Base salaries for key executive officers, including the CEO and CFO, were reaffirmed without change.

Frequently Asked Questions

Edward J. Zander was granted options to purchase 300,000 shares of common stock at an exercise price of $15.91 per share. These options are exercisable in four equal annual installments beginning on February 14, 2006, and expire on February 14, 2015, subject to certain conditions.

The MIP is designed to retain employees, attract talent, align individual efforts with business goals, and reward strong performance. Awards under the plan are based on achieving specified business and individual performance goals and are paid in cash after the close of each plan year.

The separation agreement includes continued base salary payments until July 29, 2005, extended benefits through December 31, 2005, and reimbursement for legal fees up to $25,000. A significant component is a separation allowance of $16,839,290, which includes a $4,000,000 lump sum payment intended to compensate for forfeited retirement benefits from a previous employer. Mr. Zafirovski also has specific terms for exercising vested stock options and has forfeited unvested equity.

The Amended and Restated Bylaws were amended to allow the Board of Directors more flexibility in designating officer positions. Instead of a fixed list, the Board can now determine by resolution which officer positions are elected directly by the Board or by other means.