EXECUTIVE SEVERANCE PLAN, AS
AMENDED THROUGH DECEMBER 31, 2008
Effective October 1,
2008
The purpose of the
Motorola, Inc. Executive Severance Plan (the “Plan”) is
to provide severance pay and benefits to Eligible Executives whose
employment with Motorola, Inc. and its U.S. Affiliates and/or U.S.
Subsidiaries is terminated under certain circumstances. The Plan is
effective October 1, 2008 and is applicable to Eligible
Executives who are notified of termination on or after
October 1, 2008. The Plan is intended to be an “employee
welfare benefit plan” as defined in Section 3(1) of the
ERISA maintained primarily for the purpose of providing benefits
for a select group of management or highly compensated employees.
All benefits under the Plan shall be paid solely from the general
assets of Motorola.
(a)
General Rules . An Eligible Executive shall receive the
Severance Pay and benefits described in this Plan if the Eligible
Executive’s employment with Motorola is terminated by
Motorola in a Qualifying Termination and such termination of
employment constitutes a separation from service within the meaning
of Section 409A of the Code (a “Separation from
Service”). In order to receive Severance Pay and benefits
under the Plan, in addition to fulfilling the conditions and
complying with the terms of the Plan, an Eligible Executive, as
hereinafter provided, must execute and not revoke a general waiver
and release in the form provided by Motorola (“General
Release”) and must not be in breach of any agreement with
Motorola containing restrictive covenants, or any other agreement
with or obligation to Motorola for the protection of
Motorola’s confidential and proprietary
information.
(b)
Effect of Other Plans and Agreements .
(i) An
Eligible Executive shall not receive Severance Pay and benefits
under this Plan if the Eligible Executive is eligible for and
receives severance pay and benefits under the Motorola, Inc. Senior
Officer Change in Control Plan, the Motorola, Inc. Corporate
Officer Change in Control Plan, or the Motorola, Inc. Corporate
Officer Transition Change in Control Plan (collectively, the
“VP Change in Control Plans”), or has claimed or is
claiming termination pay under the laws of any country other than
the United States . However, if a Change in Control occurs
following a Qualifying Termination, any Severance Pay and medical
benefits to which an Eligible Executive may be entitled under any
VP Change in Control Plan shall be reduced by the Severance Pay and
medical benefits actually received by such Executive under this
Plan. Following the Change in Control, the Eligible Executive who
is eligible for and is receiving severance pay and benefits under
any VP Change in Control Plan shall be entitled to no further
Severance Pay and benefits under this Plan.
(ii) Subject
to Section 2(b)(i) above, if an individual has entered into an
individual employment or other contract with Motorola that
explicitly provides for cash compensation upon a termination of
employment, whether or not such payment is labeled severance pay,
retention
pay or
otherwise, (other than a stock option, restricted stock, restricted
stock unit, stock appreciation right (“SAR”),
supplemental retirement, deferred compensation or similar plan or
agreement or other form of participant document entered into
pursuant to a Motorola-sponsored group plan that may contain
provisions operative on a termination of the Eligible
Executive’s employment) and such contract is in effect on the
date of the Eligible Executive’s termination of employment,
such cash compensation shall be offset against the Severance
Allowance provided under this Plan to the extent such cash
compensation either does not provide for the deferral of
compensation under Section 409A of the Code or is paid in a
lump sum at the same time as severance paid under Section 3(b)
hereunder. In all other respects, the terms of the individual
agreement shall apply and shall supersede the terms of this
Plan.
3.
Severance Pay and Benefits .
(a)
Severance Pay and Benefits . An Eligible Executive entitled
to Severance Pay and benefits pursuant to Section 2 shall
receive Severance Pay and severance benefits, based on the Eligible
Executive’s level or salary grade, in accordance with the
schedule attached as Exhibit A and the provisions of this
Section 3.
(b) Form
and Timing of Severance Payments . The total amount of the
Severance Allowance provided in Section 3(a) shall be paid after
the Eligible Executive’s Separation Date in a lump sum within
thirty (30) days after the Eligible Executive signs and does
not revoke the General Release, provided that the Eligible
Executive signs the General Release no later than the last day of
the 49-day consideration period and such payment shall occur
(assuming no revocation) before March 15 of the year following
the Separation Year. Each payment of Severance Pay and benefits to
the Eligible Executive under this Plan, including payments pursuant
to Section 3 and reimbursements under Sections 3(g), (h),
(i), (j) and (o) and 4(e), will be considered a separate
payment and not one of a series of payments for purposes of
Section 409A of the Code.
(c)
Alternate MIP Award for Separation Year . If an Eligible
Executive receiving a Severance Allowance under this Plan
participates in the Motorola Incentive Plan (“MIP
Plan”) during the Separation Year, he or she shall receive,
in lieu of any incentive bonus under the MIP Plan, the equivalent
of a pro rata MIP Award based on actual business results for the
Separation Year (“Alternate MIP Award”) and with an
individual performance factor of 1.0, which Alternate MIP Award
shall be paid in a lump sum on the first payroll date following
July 1 of the year following the Separation Year (unless the
Eligible Executive has made an irrevocable election under any
deferred compensation arrangement subject to Code Section 409A
to defer any portion of the Eligible Executive’s annual
incentive bonus in respect of the Separation Year, in which case
such deferred bonus shall be paid in accordance with such election)
(such payment date, “Alternate MIP Award Payment
Date”). The applicable pro rata amount shall be determined by
multiplying (i) the product of the Eligible Executive’s
Eligible Earnings, as defined in the MIP Plan, times his or her MIP
Plan target percentage for the Separation Year times the business
performance factor under the MIP Plan for the applicable
organizational unit by (ii) a fraction, the numerator of which
is the number of completed days of active work during the
Separation Year and the denominator of which is 365. An Eligible
Executive who receives an Alternate MIP Award may not receive an
MIP Award under the MIP Plan for the Separation Year under any
circumstances.
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(d)
Alternate SIP Award for Separation Year . If an Eligible
Executive receiving a Severance Allowance under this Plan
participates in a sales incentive plan pursuant to which he or she
is eligible for an incentive award with respect to monthly or
quarterly performance periods during the Separation Year, he or she
shall receive the equivalent of a pro rata termination incentive
for the applicable performance period in which the Separation Date
occurs based on actual performance goals and performance results
(“Alternate Quarterly or Monthly SIP Award”). If an
Eligible Executive receiving a Severance Allowance under this Plan
participates in a sales incentive plan pursuant to which he or she
is eligible for an incentive award (or a portion of an incentive
award) with respect to an annual performance period during the
Separation Year, he or she shall receive the equivalent of a pro
rata termination incentive (for such award or portion thereof) for
the applicable performance period in which the Separation Date
occurs based on actual performance goals and performance results
(“Alternate Annual SIP Award”). The pro rata amount
shall be determined as provided in the applicable SIP Plan.
Alternate Quarterly or Monthly SIP Awards shall be paid at the same
time as payment would be made under the SIP Plan for the applicable
performance period if the Eligible Executive had remained an
employee and Alternate Annual SIP Awards shall be paid on the
Alternate MIP Award Payment Date. An Eligible Executive who
receives an Alternate SIP Award may not receive a SIP Award under
the SIP Plan for the same quarter or any subsequent quarter under
any circumstances. Alternatively, an Eligible Executive who
receives a SIP Award under the SIP Plan may not receive an
Alternate SIP Award under this Plan for the same quarter or any
subsequent quarter under any circumstances.
(e) Paid
Time Off . The Severance Pay and benefits outlined in
Section 3 above include and exceed any paid time off or
similar amounts that are unpaid as of the Eligible
Executive’s Separation Date, and the Eligible Executive shall
not be entitled to any additional payment for or in respect of such
unpaid amounts.
(f)
Equity Awards . This Plan does not alter or amend any
vesting or other terms and conditions contained in previous grants
of stock options, restricted stock, restricted stock units, or
SARs, as reflected in the agreements or award documents issued at
the time of grant (“Equity Awards”). Following the
Separation Date, except in the event the Eligible Executive
violates one or more of the restrictive covenants referenced in
Section 4(a) below, each of his or her outstanding Equity Awards
will be accorded the most favorable treatment for which each Equity
Award qualifies per the terms of the applicable plans, grant
agreements or award documents.
(g)
Medical Benefits . Benefits coverage in effect on the
Eligible Executive’s Separation Date under the Motorola
Employee Medical Benefits Plan (“Medical Plan”), as
amended from time to time, will be continued at the regular
employee contribution rate through the end of the Severance Period,
provided that the Eligible Executive complies with all terms and
conditions of the Medical Plan, including paying the necessary
contributions and provided further, if the Eligible Executive is
reemployed with another employer and becomes covered under that
employer’s medical plan, the medical benefits described
herein (if they are not terminated as provided in COBRA, defined
below) shall be secondary to those provided under such other plan.
The difference between the cost for such coverage under COBRA, as
defined below, and the amount of the necessary contributions that
the Eligible Executive is required to pay for such coverage as
provided above will be paid by Motorola and considered imputed
income to the Eligible Executive. The Eligible Executive is
responsible for the payment of
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income tax due
as a result of such imputed income. After the total period of
medical benefit continuation provided in this Plan, the Eligible
Executive may elect to continue medical benefits under the Medical
Plan at his or her own expense, in accordance with COBRA. The
period of medical benefit continuation described immediately above
counts toward and reduces the maximum coverage under
Section 4980B of the Code (“COBRA”), as described
in Treasury Regulation Section 54.4980B-7, A-7(a). The
COBRA period commences on the first of the month following the
Separation Date. If the Eligible Executive is eligible for coverage
under the Motorola Post-Employment Health Benefits Plan or any
restated or successor plan (the “Retiree Plan”), the
Eligible Executive may apply for such coverage, provided that he or
she makes an election for such coverage, in accordance with the
terms and conditions for such coverage under the Retiree Plan. The
Eligible Executive may wait until the end of the period of
continued Medical Plan coverage provided for in this Plan before
electing to begin coverage under the Retiree Plan. If the Eligible
Executive commences coverage under the Retiree Plan before he or
she has exhausted the continued Medical Plan coverage provided for
in this Plan, the continued Medical Plan coverage will
end.
(h)
Outplacement . Motorola also will provide senior executive
outplacement and career continuation services by a firm to be
selected by Motorola for up to 12 months following the
Separation Date, as set forth in Exhibit A, if the Eligible
Executive elects to participate in such services.
(i) Other
Benefits . Except as otherwise expressly provided in the Plan,
the effect of an Eligible Executive’s termination and this
Plan upon the Eligible Executive’s participation in, or
coverage under, any of Motorola’s benefit or compensation
plans, including but not limited to the Motorola Omnibus Incentive
Plan of 2006, as amended and restated through January 31,
2008, the Motorola Incentive Plan, the officer-level sales
incentive plans, the General Instrument Corporation 1997 Long-Term
Incentive Plan, the General Instrument Corporation 1999 Long-Term
Incentive Plan, the Motorola Elected Officers Supplementary
Retirement Plan, the Motorola Supplemental Pension Plan, the
Motorola Elected Officers Life Insurance Plan, the 2006 Motorola
Long Range Incentive Plan for any given performance cycle, the
Motorola Management Deferred Compensation Plan, the Motorola
Financial Planning Program, the VP Change in Control Plans or any
other applicable group plan, stock option plan and any restricted
stock, stock unit or SAR agreements, shall be governed by the terms
of those plans and agreements. Motorola is making no guarantee,
warranty or representation in this Plan regarding any position that
may be taken by any administrator or plan regarding the effect of
this Plan upon the Eligible Executive’s rights, benefits or
coverage under those plans and agreements .
(j)
Financial Planning Services . Notwithstanding anything to
the contrary in Section 3(i) above, for any Eligible Executive who
participates in the Motorola Financial Planning Program on such
Eligible Executive’s Separation Date, Motorola will pay the
Eligible Executive’s financial planning vendor for services
rendered pursuant to the Motorola Financial Planning Program
through the later of (i) 12 months following the
Separation Date or (ii) April 30 of the calendar year
following the Separation Year. Payment will be made within
90 days following the date the Eligible Executive submits
evidence that he or she incurred such expenses, and in all events
prior to the last day of the calendar year following the calendar
year in which he or she incurs the expense. In no event will the
amount of such expenses paid in one year affect
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the amount of
expenses eligible for payment, or in-kind benefits to be provided,
in any other taxable year.
(k)
Eligible Executives Whose Work Country is not the United
States . To the extent an Eligible Executive is party to an
agreement providing that Motorola shall relocate and/or repatriate
him or her and eligible dependents to the United States and such
agreement is still in effect on the Separation Date, Motorola will
provide relocation and/or repatriation services in accord with the
terms of that agreement. Payment of relocation vendors and/or
reimbursement of the Eligible Executive will be made within
90 days following the date the Eligible Executive submits
evidence that he or she incurred such expenses, and in all events
prior to the last day of the calendar year following the calendar
year in which he or she incurs the expense. In no event will the
amount of such expenses paid or reimbursed in one year affect the
amount of expenses eligible for payment or reimbursement, or
in-kind benefit to be provided, in any other taxable
year.
(l)
Cessation of Payments upon Rehire . If an Eligible Executive
is rehired by Motorola within the Severance Period, he or she shall
repay a pro rata portion of the Severance Allowance calculated by
multiplying the Severance Allowance by a fraction, the numerator of
which is the total number of months of the Eligible
Executive’s Severance Period minus the number of completed
months of severance following the Separation Date, and the
denominator of which is the total number of months of the Eligible
Executive’s Severance Period. This requirement may be waived
by Motorola, Inc.’s most senior Human Resources officer for
compelling business reasons, as determined in his or her
discretion. The Alternate MIP Award or the Alternate SIP Award, as
applicable, shall be paid to, and/or may be retained by, the
Eligible Executive as otherwise provided herein, provided
that, this requirement may be waived by the most senior Human
Resources officer in favor of reinstating the Eligible Executive to
the MIP Plan or an officer-level SIP Plan for the performance
period in which the Separation Date occurred, provided further that
the payment under the MIP Plan or an officer level SIP Plan for the
performance period of reinstatement will be paid at the same time
either the Alternate MIP Award or Alternate SIP Award would have
been paid if not so waived. In no event may the Eligible Executive
receive an Alternate MIP Award or Alternate SIP Award and either an
actual MIP Plan award or an actual SIP Plan award for the same
performance period, as the case may be.
(m)
Committee Discretion . Notwithstanding the foregoing, the
Compensation and Leadership Committee of Motorola, Inc.’s
Board of Directors or its delegate may, in its sole discretion,
reduce, eliminate, or otherwise adjust the amount of an Eligible
Executive’s Severance Pay and benefits, including the
Alternate MIP Award and/or Alternate SIP Award. Such determination
shall be made before any severance payments commence under this
Section 3. Unless the Compensation and Leadership Committee
determines otherwise, or unless the Eligible Executive is an
officer subject to Section 16 of the Securities Exchange Act
of 1934 or an officer reporting directly to Motorola, Inc.’s
Chief Executive Officer or a member of Motorola’s Senior
Leadership Team, Motorola, Inc.’s most senior Human Resources
officer is delegated the authority to exercise the discretion
provided by this provision with respect to Eligible Executives,
provided such determination is made before any severance payments
commence under this Section 3 and he or she reports such
adjustment to the Compensation and
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Leadership
Committee in writing no later than the Committee’s next
regularly scheduled meeting, with a copy to the Plan
Administrator.
(n) Death
of Executive . If an Eligible Executive entitled to a Severance
Allowance or payments under Section 3(c) or (d) should die
before all such amounts payable to him or her have been paid, such
unpaid amounts shall be paid no later than 90 days following
the Eligible Executive’s death (or in the case of payments
under Section 3(c) or (d), within 90 days following
determination of the applicable performance results) to Eligible
Executive’s legal representative, if there be one, and, if
not, to the Executive’s spouse, parents, children or other
relatives or dependents of such Executive as the Plan
Administrator, in his or her discretion, may determine; provided,
however, such payee or payees shall not have the right to designate
the taxable year of payment. Any payment so made shall be a
complete discharge of any liability with respect to such
benefit.
(o)
Business Expenses . Each Eligible Executive shall be
responsible for any personal charges incurred on any Motorola
credit card or other account used by the Eligible Executive prior
to the Eligible Executive’s Separation Date and the Eligible
Executive shall pay all such charges when due. Motorola shall
reimburse the Eligible Executive for any pending, reasonable
business-rela
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