Exhibit 10.21
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to the Employment Agreement entered into as of
April 2, 1999, by and between General Instrument Corporation, a Delaware
Corporation (the "Company"), and Xxxxxx X. Xxxxx ("Executive") (such agreement,
the "Employment Agreement") is among the Company, Executive, and Motorola, Inc.
("Motorola") and is dated as of 12/22, 1999.
WHEREAS, the Company, Motorola and Lucerne Acquisition Corp.
have entered into an Agreement and Plan of Merger dated as of September 14, 1999
(such agreement, as amended from time to time, the "Merger Agreement"), pursuant
to which the Company will become a wholly owned subsidiary of Motorola in a
merger (the "Merger"); and
WHEREAS, Executive is employed by the Company as its Chief
Executive Officer pursuant to the Employment Agreement; and
WHEREAS, the Company and Motorola wish to ensure that they
will continue to receive the benefit of Executive's services following the
Merger, and to provide for the terms and conditions of Executive's employment by
Motorola following the Merger, and Executive is willing to remain so employed on
such terms and conditions;
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. RETENTION PROGRAM. (a) As soon as practicable after the
Effective Time (as defined in the Merger Agreement), but in no event later than
the end of the first fiscal quarter of Motorola that ends after the Effective
Time, Motorola shall grant Executive stock options with respect to 225,000
shares (the "Closing Options") with an exercise price equal to the fair market
value of the underlying shares on the date of grant, and 25,000 shares of
restricted stock (the "Closing Shares"), in each case pursuant to the Motorola
Incentive Plan of 1998 (the "Motorola Incentive Plan"), subject to appropriate
adjustment as to the number of shares if an event described in Section 3.3 of
the Motorola Incentive Plan (an "Adjustment Event") occurs on or before the date
of grant. The Closing Options shall be scheduled to vest in four equal
installments on each of the first four anniversaries of the date of grant, and
all of the Closing Shares shall vest on the second anniversary of the day on
which the Effective Time occurs, in each case subject to Executive's continued
employment, and the Closing Options and the Closing Shares shall otherwise be
subject to the terms and conditions of the Motorola Incentive Plan.
(b) At the time when Motorola makes its annual stock
option grants to executives for the fiscal year following the fiscal year in
which the Effective Time occurs, Motorola shall grant Executive stock options
with respect to 100,000 shares pursuant to the Motorola Incentive Plan, or any
successor thereto, subject to appropriate adjustment as to the number of shares
if an Adjustment Event occurs on or before the date of grant. Such options shall
have an exercise price equal to the fair market value of the underlying shares
on the date of grant, and shall otherwise be subject to the terms and conditions
of the Motorola Incentive Plan.
(c) If Executive remains employed by Motorola or one of
its Affiliates from the date on which the Effective Time occurs through the
second anniversary thereof, Executive shall receive a one-time Retention Cash
Bonus equal to $1,196,000.
(d) Except as specifically provided below, the foregoing
compensation shall be in addition to the compensation to which Executive is
entitled pursuant to the Employment Agreement, as amended hereby.
2. EMPLOYMENT TRANSFER. It is acknowledged and agreed
that Executive may, at and/or from time to time after the Effective Time, be
transferred to the employment of Motorola or a Subsidiary of Motorola, and that
in connection with any such transfer, the Company may assign to the employing
entity its rights, and cause the employing entity to assume its obligations,
under the Employment Agreement and this Amendment. In such event, references to
the Company in the Employment Agreement and this Amendment shall be deemed to
refer to such employing entity.
3. AMENDMENTS TO EMPLOYMENT AGREEMENT. The following
amendments to the Employment Agreement shall be effective as of the Effective
Time.
(a) EMPLOYMENT TERM. Notwithstanding Section 1.1 of the
Employment Agreement, the "Employment Term" shall mean the period ending on the
second anniversary of the date on which the Effective Time occurs, and shall not
be further renewed or extended except by written agreement among the parties
hereto.
(b) DUTIES AND RESPONSIBILITIES. Section 1.2 of the
Employment Agreement shall be amended to read in its entirety as follows:
During the Employment Term, Executive shall serve as Executive
Vice President and President, Broadband Communications Sector,
with overall responsibilities for the strategic, tactical and
operational success of the Broadband Communications Sector,
and such other duties and responsibilities appropriate to such
position as may be assigned to him from time to time by the
Executive Vice President and President, Motorola
Communications Enterprise, to whom Executive shall report.
Executive shall also serve in such other senior positions with
Motorola, the Company and their affiliates to which he may be
elected or appointed from time to time during the Employment
Term.
(c) BASE SALARY. Notwithstanding Section 1.4 of the
Employment Agreement, Executive's Base Salary shall be not less than $650,000
annually.
(d) RETIREMENT AND WELFARE PLANS. Section 1.5(b) of the
Employment Agreement shall not apply after the Effective Time; provided that
Motorola shall provide, or cause one of its Subsidiaries to provide, Executive
with life insurance coverage in the amount of $7.5 million from the Effective
Time until his employment with Motorola and its Subsidiaries terminates.
(e) VACATION. It shall not be considered a violation of
Section 1.6 of the Employment Agreement if Executive's vacation, holiday and
other pay for time not worked is governed by the terms of the policies of
Motorola rather than those of the Company.
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(f) ANNUAL INCENTIVE COMPENSATION. Notwithstanding
Section 1.7 of the Employment Agreement, beginning with the fiscal year 2001,
Executive shall participate in the short-term incentive compensation program of
Motorola for senior-level executives of Motorola generally, rather than in such
programs of the Company, and he shall have opportunities thereunder commensurate
with the opportunities provided to such other senior executives, and the target
for determining his annual bonus under such program shall be established in
accordance with Motorola's policy.
(g) LONG-TERM INCENTIVE COMPENSATION. In recognition of
the specific long-term incentive compensation provided pursuant to Section 1 of
this Amendment, Section 1.8 of the Employment Agreement shall not apply after
the Effective Time. Effective January 1, 2000, Executive shall be entitled to
participate in the Motorola Long-Range Incentive Program.
(h) RELEASE. It is acknowledged that the Release required
to be executed pursuant to Section 3 of the Employment Agreement shall extend to
Motorola and all of its Subsidiaries and Affiliates, and that the form thereof
attached to the Employment Agreement as Annex I shall be amended to the extent
necessary or appropriate to reflect such extension.
(i) TERMINATION BENEFITS. The references in Sections
3.1(b) and (c), 3.2, 3.3 and 3.4 of the Employment Agreement to plans of the
Company shall include any plans of Motorola in which Executive may participate,
but Executive shall not be entitled to duplicate benefits under plans of the
Company and Motorola.
(j) COORDINATION WITH MOTOROLA CHANGE OF CONTROL
AGREEMENT. Section 3.1(d) of the Employment Agreement is hereby amended by
adding a new sentence at the end thereof, reading in its entirety as follows:
"Notwithstanding any other provision of this Agreement, if Executive hereafter
becomes a party to any agreement with Motorola or any of its Subsidiaries
providing for severance pay and/or benefits upon termination of employment upon,
after or in connection with a change of control (however defined), then the
severance pay and benefits due under such agreement shall first be determined as
if Executive were not a party to this Agreement (the "Subsequent Severance"),
and the payments and benefits to which Executive would otherwise be entitled
pursuant to this Section 3 shall be offset by the Subsequent Severance so that
there is no duplication thereof."
(k) CHANGE OF CONTROL. It is acknowledged and agreed that
the approval of the Merger by the Company's stockholders will be a "Change of
Control" as defined in Section 3.7, and that if such approval occurs, no
subsequent event shall be deemed to be a Change of Control for purposes of the
Employment Agreement. In no event shall Executive be entitled to the $9 million
payment described in Section 3.1(c)(iii) of the Employment Agreement.
(l) GOOD REASON. Notwithstanding Section 3.7(f) of the
Employment Agreement, no change in Executive's terms and conditions of
employment that is provided for in this Amendment shall be considered to be
"Good Reason." Without limiting the generality of the foregoing, Section
3.7(f)(i) of the Employment Agreement is hereby amended to read in its entirety
as follows:
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an adverse change in Executive's duties and responsibilities,
including reporting responsibilities, that is inconsistent
with the provisions of Section 1.2 hereof, as amended by
Section 2(b) of the Amendment dated _______, 1999, except in
connection with the termination of his employment for
Disability, Cause, as a result of his death or by Executive
other than for Good Reason;
In addition, Executive expressly acknowledges and agrees that the Company has
complied with the requirements of Section 10(b) of the Employment Agreement in
connection with the Merger.
(m) CERTAIN REFERENCES. All references to the "Board" in
the Employment Agreement, other than in Section 3.7(c), shall be deemed to be
references to the Board of Directors of Motorola or a committee of such Board of
Directors with the authority of the Board to act with respect to the matters
described. The references to "the Company" (as opposed to plans of the Company)
in Sections 4.2(b), 4.2(c), 4.2(d), 4.2(e), 8 and 13 shall be deemed to be
references to "Motorola." The references to "the Company" in Sections 1.3,
1.5(a), 2, 3.7(b), 4.2(a), 5, 10(b) and 15 shall be deemed to be references to
"the Company and/or Motorola."
(n) NOTICES. Whenever a notice is given pursuant to the
Employment Agreement to the Company, a copy of such notice shall be given to
Motorola. All notices to Motorola pursuant to the Employment Agreement of this
Amendment shall be given to it at:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
or to such other names or addresses as Motorola shall designate by notice
pursuant to Section 9 of the Employment Agreement.
(o) DEFINED TERMS. The term "Subsidiary" as used herein
means any entity in an unbroken chain of entities beginning with Motorola and
ending with such entity, with each entity in such chain, beginning with
Motorola, and other than the last entity in the chain, owning an equity interest
representing at least fifty percent of the voting power or value of the next
entity in such chain. Capitalized terms used and not defined in this Amendment
shall have the meanings given to them in the Severance Protection Agreement.
4. This Amendment, together with the Employment
Agreement as amended hereby, set forth the entire understanding among the
parties hereto with respect to the subject matter hereof. Without limiting the
generality of the foregoing, this Amendment supersedes the Memorandum to
Executive from Xxxxx Xxxx and Xxxxx Xxxxxxx dated October 8, 1999.
5. This Amendment shall be null and void and of no
further effect if the Merger Agreement is terminated without consummation of the
Merger
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IN WITNESS WHEREOF, the undersigned, intending to be legally
bound, have executed this Agreement as of the date first above written.
GENERAL INSTRUMENT CORPORATION
By:
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MOTOROLA, INC.
By:
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Xxxxxx X. Xxxxx
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