Summary
This 8-K filing from Motorola, Inc. (MSI) on May 14, 2007, primarily announces the grant of performance-based stock options to CEO Edward J. Zander. The options, totaling 800,000 shares, are tied to specific stock price performance targets, requiring the stock to reach $22.00 for 300,000 options to vest and $25.00 for the remaining 500,000 options, each within a two-year window following the grant date. This structure aims to align executive compensation with shareholder value creation, incentivizing Zander to drive stock price appreciation.
Key Highlights
- 1CEO Edward J. Zander was granted 800,000 performance-based stock options.
- 2The stock options have an exercise price of $17.70 per share, reflecting the closing price on May 8, 2007.
- 3Vesting of the options is contingent on Motorola's stock price reaching $22.00 per share for 300,000 options and $25.00 per share for 500,000 options.
- 4These performance targets must be met on at least ten trading days within any thirty consecutive trading days within the two years following the grant date.
- 5The options have a ten-year expiration date (May 8, 2017), subject to certain conditions.
- 6The Compensation and Leadership Committee approved these changes with the concurrence of independent directors.
- 7Mr. Zander's employment agreement was amended to reflect these special vesting restrictions.
Frequently Asked Questions
The primary purpose of this filing is to disclose a significant stock option grant to CEO Edward J. Zander, which is performance-based and contingent on the company's stock price achieving specific targets.
The options vest based on stock price performance. 300,000 options will vest if the stock price reaches $22.00 per share, and the remaining 500,000 options will vest if the stock price reaches $25.00 per share. These conditions must be met for at least ten trading days within any thirty consecutive trading days, all falling within the two years after the grant date of May 8, 2007.
The performance-based nature of the options is designed to align Mr. Zander's compensation directly with the creation of shareholder value. The vesting is tied to an increase in the company's stock price, providing a clear incentive for the CEO to focus on strategies that will boost the stock's performance.
The exercise price for these options is $17.70 per share, which was the closing price of Motorola's common stock on May 8, 2007. The options are set to expire on May 8, 2017, provided the vesting conditions are met.