What are the main changes to Motorola's incentive plans?

The company amended its Mid-Range Incentive Plan (MRIP) and Long-Range Incentive Plan (LRIP). Key changes include clarifying the committee's ability to reduce awards based on performance for Section 162(m) participants, allowing the CEO to adjust awards for performance (with committee approval for senior leaders), and ensuring pro-rata awards reflect actual service periods.

What equity awards were granted to the CEO, Edward J. Zander?

Edward J. Zander was granted stock options and 150,000 restricted stock units (RSUs) under the company's Omnibus Incentive Plan. These RSUs will vest in two tranches: 50% after 30 months and the remaining 50% after 60 months from the grant date.

Are there any conditions attached to the CEO's stock options?

Yes, as a condition for accepting the stock options, Mr. Zander must execute a Stock Option Consideration Agreement. This agreement allows Motorola to recover certain stock option gains if he violates specific covenants outlined within the agreement.

Did the CEO defer settlement of his restricted stock units?

No, unlike previous restricted stock unit agreements, Mr. Zander has elected not to defer the settlement of these 150,000 RSUs. He will receive the shares upon vesting according to the terms of the award agreement.

MSI 8-K: Material Agreements

Summary

This 8-K filing by Motorola Solutions, Inc. (MSI) details actions taken by its Compensation and Leadership Committee on May 2, 2005, primarily concerning executive compensation and incentive plans. Key updates include amendments to the Mid-Range Incentive Plan (MRIP) and the Long-Range Incentive Plan (LRIP) of 2005. These amendments aim to provide greater flexibility in award adjustments based on performance and participant status, ensuring alignment with Internal Revenue Code Section 162(m) and allowing for CEO-initiated performance adjustments subject to committee approval for senior leadership. Furthermore, the filing discloses significant equity grants to Chairman and CEO Edward J. Zander. These grants include stock options and 150,000 restricted stock units (RSUs) under the Omnibus Incentive Plan. The RSUs have a vesting schedule of 50% after 30 months and 50% after 60 months, with Zander electing not to defer settlement, differing from previous RSU agreements. These actions underscore the company's focus on executive incentives and potential alignment with shareholder value.

Key Highlights

1Amendments approved for the Motorola Mid-Range Incentive Plan (MRIP) of 2003 to enhance flexibility in award adjustments based on performance and participant status.
2Amendments approved for the Motorola Long-Range Incentive Plan (LRIP) of 2005, including provisions for performance-based reductions, CEO-led adjustments, and pro rata awards based on actual service periods.
3Clearer stipulations regarding performance-based award reductions for participants subject to Section 162(m) of the Internal Revenue Code under both MRIP and LRIP.
4Authority granted to the CEO to make performance-based adjustments to awards for non-senior leadership participants, subject to plan limits and committee approval for senior leadership.
5Edward J. Zander, Chairman and CEO, received grants of stock options and 150,000 restricted stock units (RSUs) under the Omnibus Incentive Plan of 2003.
6RSU vesting schedule for Mr. Zander: 50% after 30 months and 50% after 60 months from the grant date.
7Mr. Zander will receive the shares upon vesting and has elected not to defer settlement of these RSUs.

Motorola Solutions, Inc. 8-K Report, Material Agreement (May 6, 2005)

Summary

Key Highlights

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