What is the primary purpose of the new 2006 LRIP?

The primary purpose of the 2006 LRIP is to incentivize key executives and officers of Motorola to achieve outstanding performance, drive operational improvements, and increase company profits through a long-term, performance-based compensation structure.

Who is eligible to participate in the 2006 LRIP?

Eligibility for the 2006 LRIP extends to Corporate, Senior, and Executive Vice Presidents of Motorola. The Chief Executive Officer and the Chief Operating Officer (if applicable) are also eligible to participate, subject to Compensation Committee approval.

How are awards determined under the 2006 LRIP?

Awards are determined based on the achievement of stated performance goals over multi-year performance periods. These goals primarily relate to cumulative improvement in economic profit and cumulative sales growth. A participant's target award is set as a percentage of their base pay at the start of a performance period, with a maximum earned award of up to two times the target award. Award payouts will be in shares of Motorola common stock.

Are there any conditions that could lead to forfeiture of awards?

Yes, awards under the 2006 LRIP can be subject to forfeiture. Specifically, awards may be totally forfeited if Motorola's total shareholder return for the entire performance cycle is not positive. Partial or complete forfeiture can also occur if Motorola's total shareholder return does not meet or exceed the 55th percentile of a defined comparator group for the performance cycle.

MSI 8-K: Material Agreements

Summary

Motorola, Inc. (MSI) filed an 8-K on April 3, 2006, to announce the adoption of the Motorola Long Range Incentive Plan (LRIP) of 2006, effective January 1, 2006. This new plan replaces the 2005 LRIP and is designed to incentivize key executives, including Corporate, Senior, and Executive Vice Presidents, as well as the CEO and COO, to drive operational improvements and profitability through multi-year performance periods. Awards are tied to the achievement of specific financial goals such as economic profit and sales growth, with potential forfeiture if total shareholder return metrics do not meet defined benchmarks.

Key Highlights

1Adoption of the Motorola Long Range Incentive Plan (LRIP) of 2006, effective January 1, 2006.
2The 2006 LRIP replaces the previous year's plan (2005 LRIP) with no further performance cycles under the 2005 LRIP.
3The plan is designed to incentivize officers and encourage improved operations and increased profits.
4Eligible participants include Corporate, Senior, and Executive Vice Presidents, as well as the CEO and COO.
5Awards are based on multi-year performance periods with target awards set as a percentage of base pay, with a maximum earned award of two times the target.
6Performance metrics include cumulative improvement in economic profit and cumulative sales growth.
7Awards are contingent on achieving positive total shareholder return and meeting or exceeding a defined comparator group's total shareholder return percentile.

Motorola Solutions, Inc. 8-K Report, Material Agreement (Apr 3, 2006)

Summary

Key Highlights

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