Summary
Motorola, Inc. (MSI) filed an 8-K on August 28, 2008, to disclose the terms of an employment agreement with Gregory Q. Brown, Co-Chief Executive Officer. The agreement, effective August 27, 2008, outlines a three-year initial term with automatic renewals and establishes a significant compensation package designed to align Mr. Brown's interests with shareholders. This includes a base salary of not less than $1,200,000, with target annual bonuses and long-range incentive plans structured as percentages of his base salary, all subject to performance goals. The agreement also details substantial equity awards, including restricted stock units, stock options, and stock appreciation rights, with vesting contingent on continued employment and, importantly, the performance of Motorola's common stock. A key provision is the 'Post Separation Equity Award,' which is contingent on the successful spin-off of Motorola's mobile devices business into a separate publicly traded entity with a minimum market capitalization of $2.0 billion and includes an additional vesting hurdle tied to post-separation stock price appreciation, directly incentivizing Mr. Brown to enhance shareholder value.
Key Highlights
- 1New employment agreement for Co-CEO Gregory Q. Brown establishes a three-year initial term with automatic renewals.
- 2Comprehensive compensation package includes a base salary of at least $1,200,000, with significant performance-based annual bonuses and long-range incentives.
- 3Substantial equity awards, including restricted stock units, stock options, and stock appreciation rights, are granted with vesting tied to continued employment and stock price performance.
- 4A 'Post Separation Equity Award' is contingent on the mobile devices business spin-off achieving at least $2.0 billion in market capitalization and further stock price appreciation.
- 5In the event of a 'Qualifying Termination' (termination without cause or by executive for good reason), Mr. Brown is entitled to severance up to three times his base salary and target bonus, along with accelerated equity vesting and continued medical benefits.
- 6Termination for cause or by the executive without good reason results in entitlement only to accrued salary and vacation pay.
- 7The agreement includes standard restrictive covenants such as confidentiality and non-solicitation/non-compete provisions for two years post-termination.