SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): December 22, 1999
GENERAL INSTRUMENT CORPORATION
(Exact Name of registrant specified in its charter)
Delaware 001-12925 36-4134221
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(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
101 Tournament Drive
Horsham, PA 19044
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(Address of principal executive offices)
Registrant's telephone number: (215) 323-1000
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Item 5. Other Events
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On September 14, 1999, General Instrument Corporation (the
"Company") entered into an agreement and plan of merger with Motorola,
Inc. ("Motorola") and a wholly-owned subsidiary of Motorola ("Sub")
pursuant to which the Company will merge with Sub and become a wholly-
owned subsidiary of Motorola and each share of common stock of the
Company (other than shares held in the treasury of the Company) will be
converted into the right to receive 0.575 of a share of Motorola common
stock (the "Merger"). It is currently contemplated that the Merger will
be consummated shortly following the receipt of approval of the Company's
stockholders at a special meeting of stockholders of the Company to be
held on January 5, 2000. A summary of the terms of the Merger and a copy
of the merger agreement are included in the Company's proxy statement
dated November 29, 1999 included in Motorola's Registration Statement on
Form S-4 (File No. 333-88735) (the "Merger Proxy Statement") and
incorporated herein by reference.
Reference is made to the section of the Merger Proxy Statement
entitled "Interests of Certain Persons in the Merger", which contains a
description of Motorola's intention to implement a retention program for
senior executives of the Company in order to provide incentives for them
to remain with Motorola after the Merger is completed and to achieve high
performance results. In furtherance of such retention program, on
December 22, 1999, Edward D. Breen, Chairman of the Board and Chief
Executive Officer, and certain other executives of the Company entered
into retention agreements (the "Retention Agreements") with Motorola as
contemplated by the proposed arrangements described in the Merger Proxy
Statement under "Interests of Certain Persons in the Merger".
As discussed in the Merger Proxy Statement, the Retention
Agreements have three components: Motorola stock options, restricted
Motorola share grants and cash retention bonuses. Pursuant to the
Retention Agreements, each executive will receive two grants of Motorola
stock options. Motorola will make one grant of stock options with an
exercise price equal to the fair market value of the underlying shares on
the date of grant within 10 business days after the effective time of the
Merger and the other grant at the next annual cycle grant of Motorola
stock options following the quarter in which the Merger occurs. The
Motorola stock options will vest in four equal installments, on each of
the first four anniversaries of the date of grant, in accordance with the
Motorola Incentive Plan of 1998. The Retention Agreements provide that
certain of the executives will be granted restricted Motorola shares
within 10 business days after the effective time of the Merger, that will
vest if their employment continues through the second anniversary of the
Merger, subject to the terms and conditions of the Motorola Incentive
Plan of 1998. In addition, under the Retention Agreements, the
executives will receive a cash retention bonus if their employment
continues for two years from the completion date of the Merger. The cash
retention bonus with respect to certain executives includes a tax gross-
up payment so that the executive is made whole for a specified amount of
ordinary income tax levied against the cash bonus payment, assuming a
31.8% tax rate. The aggregate amount of such gross-up payments is
approximately $2.6 million if all such retention bonuses become payable.
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SIGNATURES
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.
GENERAL INSTRUMENT CORPORATION
(Registrant)
By: /s/ Robert A. Scott
Name: Robert A. Scott
Title: Senior Vice President,
General Counsel and
Secretary
Date: December 23, 1999
