8-KMaterial AgreementsExhibits & Filings

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

Filed November 18, 2005For Securities:MSI

Summary

This Form 8-K filing from Motorola, Inc. on November 18, 2005, primarily details changes to the compensation structure for its non-employee directors, effective January 1, 2006. The changes involve adjustments to annual retainers, committee chair stipends, and a significant shift in equity compensation from stock options to deferred stock units. Investors should note the move towards a more equity-aligned compensation model for directors, with a mandatory portion to be received in stock or deferred stock units and an increased annual equity grant value. Additionally, the filing announces an amendment to the Motorola Long Range Incentive Plan (LRIP) of 2005. This amendment allows for pro-rated participation for newly elected officers and participants whose officer levels change, aiming to provide more flexibility and equitable distribution of long-term incentives within the executive ranks. These changes signal a focus on aligning executive and director interests with shareholder value through equity-based compensation and refined incentive plans.

Key Highlights

  • 1Motorola's Board approved changes to non-employee director compensation effective January 1, 2006.
  • 2Annual retainers for directors will increase from $75,000 to $100,000.
  • 3Committee chair retainers will also see increases.
  • 4A mandatory requirement for 50% of compensation to be in stock or deferred stock units has been introduced.
  • 5The annual equity grant for directors will shift from stock options to deferred stock units valued at $120,000.
  • 6The Motorola Long Range Incentive Plan (LRIP) of 2005 has been amended to allow for pro-rated awards for newly elected or promoted officers.
  • 7The changes aim to better align director and executive compensation with shareholder interests through increased equity ownership and flexible incentive plans.

Frequently Asked Questions

Effective January 1, 2006, non-employee directors will see an increase in their annual retainer to $100,000 from $75,000. Additionally, committee chair stipends are being raised. A significant change is the mandatory requirement that 50% of a director's compensation be received in Motorola common stock or deferred stock units. The annual equity grant will also shift from stock options to deferred stock units valued at $120,000, with dividend equivalents reinvested.

The mandatory requirement for directors to receive a significant portion of their compensation in equity (stock or deferred stock units) directly links their financial interests to the performance of Motorola's stock, thereby aligning their incentives with those of shareholders. The increased value of the annual equity grant further reinforces this alignment.

The amendment to the LRIP of 2005 introduces flexibility by allowing for pro-rated participation for newly elected officers and for participants whose officer levels change due to promotion or reclassification. This ensures that a broader range of executives can benefit from long-term incentives on a more equitable basis as their roles evolve within the company.

The changes to the compensation for non-employee directors are effective as of January 1, 2006. The amendment to the Long Range Incentive Plan (LRIP) was approved on November 15, 2005.