Reed moved up to head the handset business in July 2007 after a long search to replace Ron Garriques, who hung it up in the February of that year. In February of 2008, Reed himself was pushed aside by Motorola CEO Greg Brown, who took control of the ailing division himself. The phone business at Motorola has been ailing for over 12 months with the most recently reported revenues for the unit down 38 percent year-on-year. (see Motorola Loses Ex-Handset Head.)
Motorola lays out the terms of the agreement in new papers filed with the Securities and Exchange Commission (SEC) :
On March 7, 2008, Motorola, Inc. (the “Company”) and Stuart C. Reed entered into an agreement (referred to herein as the “Agreement”) with respect to Mr. Reed’s separation from the Company. Mr. Reed stepped down from his position as the Company’s President, Mobile Devices on February 1, 2008 but will remain an Executive Vice President of the Company until April 4, 2008. His departure was announced in a press release issued on March 7, 2008, which is attached hereto as Exhibit 99.1. Set forth below is a summary of the material terms of the Agreement.
Mr. Reed will separate from the Company on December 31, 2008 (the “Separation Date”). He will receive his regular base salary in regular payroll installments from April 5, 2008 through the Separation Date, the total gross amount of which is $445,479. Mr. Reed remains eligible to receive a pro rata payment for calendar year 2008 under the Company’s cash-based pay-for-performance annual incentive plan, which payment will be equal to three-twelfths of the value of his annual incentive plan award based on employment and Company performance for the full 2008 performance period. He will forfeit any other incentive awards for performance periods ending after December 31, 2007. In addition, equity previously granted to Mr. Reed will continue to vest through the Separation Date in accordance with the original terms of the grants after which all unvested equity awards will be forfeited.
Pursuant to the Agreement, after the Separation Date, the Company will pay Mr. Reed a $1,504,521 lump sum within 30 days following Mr. Reed’s agreement to a supplemental release of the Company from all legal claims arising out of his employment with or his separation from the Company, other than those claims that cannot be waived by law. The Agreement also requires Mr. Reed to cooperate in all investigations, litigation or other actions regarding matters of which he has knowledge, and to continue to comply with the non-disclosure, non-competition and non-solicitation provisions contained in his prior equity award agreements with the Company.
— Dan Jones, Site Editor, Unstrung