UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): March 10, 2014

 

 

Motorola Solutions, Inc.

(Exact Name of Registrant as Specified in Charter)

 

 

 

DELAWARE   1-7221   36-1115800

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

1303 East Algonquin Road

Schaumburg, Illinois

  60196
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (847) 576-5000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e)     

 

  (i) On March 10, 2014, Motorola Solutions, Inc. (the “ Company ”) and its Chief Executive Officer, Greg Brown, entered into a third amendment (the “Third Amendment”) to Mr. Brown’s employment agreement dated August 27, 2008. The Third Amendment decreases the minimum annual target bonus from 220% to 150% and eliminates the excise tax gross-up. The Third Amendment also provides, at the time of a change in control and qualifying termination, Mr. Brown the option to receive whichever treatment that provides the higher net after-tax benefit: (i) reduction of payment to the Safe Harbor amount to eliminate the excise tax, or (ii) full payment with the excise tax paid by Mr. Brown. The full text of the Third Amendment is included as Exhibit 10.1 hereto and is incorporated herein by reference.

 

  (ii) On March 10, 2014, the Compensation and Leadership Committee (the “ Committee ”) of the Board of Directors (the “ Board ”) of the Company, in recognition of the prior appointment of Mr. Gino A. Bonanotte as Executive Vice President and Chief Financial Officer, approved the following compensatory arrangements covering Mr. Bonanotte:

1. Mr. Bonanotte’s annualized base salary was increased to $610,000, effective as of March 10, 2014;

2. A promotional grant of 3,010 of restricted stock units (the “RSUs”) under the Company’s Omnibus Incentive Plan of 2006 (the “Omnibus Plan”), on March 10, 2014, which RSUs will vest in three equal annual installments on March 10, 2015, March 10, 2016 and March 10, 2017, subject to his continued employment;

3. A promotional grant of non-qualified stock options (the “Options” )  under the Omnibus Plan to acquire 25,020 shares of the Company’s common stock on March 10, 2014. The exercise price for the Options will be $66.43, the closing price for a share of the Company’s common stock on March 10, 2014. The expiration date of the Options, subject to certain conditions, is March 10, 2024. The Options will vest in three equal annual installments on March 10, 2015, March 10, 2016 and March 10, 2017, subject to his continued employment; and

4. Mr. Bonanotte also received a 2014 Award (as defined below).

 

  (iii) On March 10, 2014 the Committee granted Options and RSUs to executive officers as part of the 2014 long-term incentive program under the Company’s Omnibus Plan (the “ 2014 Awards ”). The Committee modified the timing of the equity grants as compared to prior grants. Historically, equity grants were made at the same time as the Company’s annual meeting of stockholders, typically in May of each year. We determined that moving the timing of the 2014 Awards to March, to coincide with other compensation decisions for the executive officers, including setting their long range incentive plan compensation, was preferable. The Options and RSUs will vest and settle in common stock on the later of (a) the date on which the average closing price of company common stock for any fifteen consecutive trading days is 115% or greater than the average closing price of company common stock for the fifteen trading days immediately preceding the date of grant, and (b) in three equal installments on the first, second and third anniversary of the grant date. The 2014 Awards to our executive officers who will be NEOs this year are as follows:

 

     Options      RSUs  

Mr. Brown (PEO)

     326,933         29,479   

Mr. Bonanotte (PFO)

     41,736         7,526   

Mr. Mark F. Moon, Executive Vice President and President, Sales & Product Operations

     58,430         10,537   

Ms. Michele A. Carlin, Senior Vice President, Human Resources and Communications

     30,606         5,519   

Mr. Eduardo F. Conrado, Senior Vice President, Marketing and IT

     27,824         5,017   


Item 9.01. Financial Statements and Exhibits

(d) Exhibits

 

Exhibit No.    Description
10.1    Third Amendment, dated March 10, 2014, to the Employment Agreement dated August 27, 2008, as amended, by and between Motorola Solutions, Inc. and Gregory Q. Brown.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  MOTOROLA SOLUTIONS, INC.
  (Registrant)
Dated: March 13, 2014   By:  

/s/ Michele A. Carlin

    Name:   Michele A. Carlin
    Title:   Senior Vice President, Human Resources and Communications


EXHIBIT INDEX

 

Exhibit No.    Description
10.1    Third Amendment, dated March 10, 2014, to the Employment Agreement dated August 27, 2008, as amended, by and between Motorola Solutions, Inc. and Gregory Q. Brown.

Exhibit 10.1

THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment (the “ Amendment ”) to the Employment Agreement, by and between Motorola Solutions, Inc. (f/k/a/ Motorola, Inc.) (“ Motorola ” or the “ Company ”) and Gregory Q. Brown (the  “ Executive ”) dated August 27, 2008, as amended on December 15, 2008 and May 28, 2010 (the “ Employment Agreement ”), is effective as of March 10, 2014. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Employment Agreement.

1. The name Motorola, Inc. was changed to Motorola Solutions, Inc. on January 4, 2011. All references in the Employment Agreement to “Motorola” or “Motorola, Inc.” shall be deemed to be references to Motorola Solutions, Inc.

2. Section 3(b)(ii)(A) of the Employment Agreement is hereby amended by replacing the reference to “220%” with “150%”.

3. Section 8 of the Employment Agreement (titled “ Certain Additional Payments by the Company ” and relating solely to a gross-up tax payment for golden parachute taxes) is hereby amended and restated in its entirety as set forth below:

8.  Limitation on Payments Under Certain Circumstances .

(a) In the event of a Change of Control as defined in Section 5(f) of this Agreement, and KPMG LLP, or such other nationally recognized accounting firm as may be selected by the Company, that is reasonably acceptable to the Executive, prior to a Change of Control (the “ Accounting Firm ”) shall determine that receipt of all Payments would subject the Executive to the Excise Tax, the Accounting Firm shall determine whether to reduce any of the Payments paid or payable pursuant to this Agreement (the “ Agreement Payments ”) so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The Agreement Payments shall be so reduced only if the Accounting Firm determines that the Executive would have a greater Net After-Tax Amount of aggregate Payments if the Agreement Payments were so reduced. If the Accounting Firm determines that the Executive would not have a greater Net After-Tax Amount of aggregate Payments if the Agreement Payments were so reduced, the Executive shall receive all Agreement Payments to which the Executive is entitled hereunder.

(b) If the Accounting Firm determines that the aggregate Agreement Payments should be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, the Company shall promptly give the Executive notice to that effect and a copy of the detailed calculation thereof. All determinations made by the Accounting Firm under this Section 8 shall be binding upon the Company and the Executive and shall be made as soon as reasonably practicable and in no event later than 5 days following the Date of Termination. For purposes of reducing the Agreement Payments so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, only amounts payable under this Agreement (and no other Payments) shall be reduced. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing the payments and benefits under the following sections of this Agreement in the following order: (i) any severance payment that is based on a multiple of Annual Base Salary and/or Target Bonus; (ii) any amount of a pro-rata Annual Bonus based on actual performance that is treated as a Payment; (iii) amounts of any medical premiums paid on behalf of the Executive;


(iv) the acceleration of vesting of stock options with an exercise price that exceeds the then fair market value (as reported then or most recently beforehand for the New York Stock Exchange-Composite Transactions in the Wall Street Journal at  www.online.wsj.com ) of the Common Stock subject to the award, provided that such stock options are not permitted to be valued under Treasury Regulation Section 1.280G-1 Q/A – 24(c); (v) any equity awards accelerated or otherwise valued at full value, provided that such equity awards are not permitted to be valued under Treasury Regulation Section 1.280G-1 Q/A – 24(c); (vi) the acceleration of vesting of stock options with an exercise price that exceeds the then fair market value (as reported then or most recently beforehand for the New York Stock Exchange-Composite Transactions in the Wall Street Journal at  www.online.wsj.com ) of the Common Stock subject to the award and other equity awards, provided that such stock options and other equity awards are permitted to be valued under Treasury Regulation Section 1.280G-1 Q/A – 24(c); and (vii) the acceleration of vesting of all other stock options and equity awards; provided that with each category the reduction shall be done on a basis resulting in the highest amount retained by the Executive; and provided, further, that to the extent permitted by Section 409A of the Code and Sections 280G and 4999 of the Code, if a different reduction procedure would be permitted without violating Section 409A of the Code or losing the benefit of the reduction under Sections 280G and 4999 of the Code, the Executive may designate a different order of reduction, with such designation being made by the Executive in a written notice sent to the Company not later than twenty (20) days after the later of the Executive’s Date of Termination and the date that the Executive receives the above determination from the Accountants. All fees and expenses of the Accounting Firm shall be borne solely by the Company.

(c) As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of the Executive pursuant to this Agreement which should not have been so paid or distributed (“ Overpayment ”) or that additional amounts which will have not been paid or distributed by the Company to or for the benefit of the Executive pursuant to this Agreement could have been so paid or distributed (“ Section 8 Underpayment ”), in each case, consistent with the calculation of the Safe Harbor Amount hereunder. In the event that, based upon a final and non-appealable tax deficiency (or denial of tax refund) by the Internal Revenue Service assessed against either the Company or the Executive, an Overpayment has been made, the Executive shall pay promptly (and in no event later than 60 days following the date on which the Overpayment is so determined) any such Overpayment to the Company together with interest at the applicable federal rate provided for in Section 7872(f)(2)(B) of the Code;  provided however , that no amount shall be payable by the Executive to the Company if and to the extent such payment would not either reduce the amount on which the Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm, based upon controlling precedent or substantial authority, determines that a Section 8 Underpayment has occurred, any such Section 8 Underpayment shall be paid promptly (and in no event later than 60 days following the date on which notice of the Section 8 Underpayment determination is given to the Executive) by the Company to or for the benefit of the Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2)(B) of the Code.


(d)  Definitions . The following terms shall have the following meanings for purposes of this Section 8.

(i) “ Excise Tax ” shall mean the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.

(ii) “ Net After-Tax Amount ” of a Payment shall mean the Parachute Value of a Payment net of all taxes imposed on the Executive with respect thereto under Sections 1 and 4999 of the Code and applicable state and local law, determined by applying the highest marginal rates that may be applicable to an individual’s taxable income under such applicable law for the taxable year in which the Payment is made.

(iii) “ Parachute Value ” of a Payment shall mean the present value as of the date of the Change of Control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2).

(iv) “ Payment ” shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Executive, whether paid or payable pursuant to this Agreement or otherwise.

(v) “ Safe Harbor Amount ” means the maximum Parachute Value of all Payments that the Executive can receive without any Payments being subject to the Excise Tax.

4. Except as expressly amended by this Amendment, all terms and conditions of the Employment Agreement remain in full force and effect and are unmodified hereby, and, without limiting the foregoing provisions of this Amendment, all references to “this Agreement” in the Employment Agreement shall also refer to this Amendment.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]


IN WITNESS WHEREOF , the parties have executed or caused this Amendment to be executed as of the day and year first above written.

 

GREGORY Q. BROWN

/s/ Gregory Q. Brown

MOTOROLA SOLUTIONS, INC.

/s/ Kenneth C. Dahlberg

Name:   Kenneth C. Dahlberg
Title:   Chairman, Compensation
  and Leadership Committee