PARTICIPATION GUIDE
MOTOROLA SOLUTIONS
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
(ESPP)
The date of this ESPP Participation Guide is March 2, 2012
THIS ESPP PARTICIPATION GUIDE IS FOR ALL ELIGIBLE EMPLOYEES OF MOTOROLA
SOLUTIONS, INC. AND ITS DESIGNATED SUBSIDIARIES PARTICIPATING IN THE MOTOROLA
SOLUTIONS AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN OF 1999
(ESPP). IT INCLUDES AN ESPP COUNTRY SUPPLEMENT FOR U.S. EMPLOYEES.
THIS ESPP PARTICIPATION GUIDE SHOULD BE READ IN CONJUNCTION WITH THE ESPP
COUNTRY SUPPLEMENT RELEVANT TO YOUR WORK COUNTRY. PLEASE READ BOTH
DOCUMENTS AS THEY CONTAIN IMPORTANT INFORMATION FOR PARTICIPANTS. IF YOUR
WORK COUNTRY AND PAY COUNTRY ARE DIFFERENT, YOU SHOULD ALSO READ THE
COUNTRY SUPPLEMENT RELEVANT TO YOUR PAY COUNTRY.
THIS ESPP PARTICIPATION GUIDE AND THE ESPP COUNTRY SUPPLEMENT RELEVANT TO
YOUR WORK COUNTRY (AND YOUR PAY COUNTRY, IF APPLICABLE) ARE AVAILABLE AT
http://compass.mot-solutions.com/136259347. A PAPER COPY OF EACH MAY BE OBTAINED
BY CONTACTING HRDIRECT AT [email protected] OR BY TELEPHONING U.S.
888-447-6686 (PROMPT 3). ALTERNATIVELY WRITE TO MOTOROLA SOLUTIONS REWARDS
ADMINISTRATION CENTRE, ATTN: ESPP, P.O. BOX 29005, PHOENIX, AZ 85038-09005, U.S.A.
PLEASE READ BOTH DOCUMENTS.
The ESPP Participation Guide
MOTOROLA SOLUTIONS AMENDED AND RESTATED EMPLOYEE STOCK
PURCHASE PLAN OF 1999 (ESPP)
This ESPP Participation Guide summarizes certain
key terms of the Motorola Solutions Amended and
Restated Employee Stock Purchase Plan of 1999
(“ESPP”). We encourage you to review this ESPP
Participation Guide, the relevant ESPP Country
Supplement(s) and all documentation relating to
purchases under the ESPP.
Throughout this ESPP Participation Guide, we refer
to Motorola Solutions, Inc. as the “Company”. When
we refer to the “Board” we mean the Board of
Directors of the Company, and when we refer to the
“Committee” we mean the Compensation and
Leadership Committee that has been designated by
the Board to administer the ESPP. A reference to
“Shares” means shares of the Company’s common
stock, par value $0.01 per share. When we refer to
“Motorola Solutions employees”, we mean all
employees of the Company and its subsidiaries
which have been designated to participate in the
ESPP.
This summary contained in this ESPP Participation
Guide is based on the ESPP plan document. This
summary is qualified in its entirety by the complete
text of the ESPP, which can be obtained at the
following
link
http://compass.motsolutions.com/go/276147944. If there is a
discrepancy between the summary in this ESPP
Participation Guide and the ESPP plan document,
the ESPP plan document always governs. In
addition, nothing in this summary states or implies a
contract of employment between you and Motorola
Solutions or its subsidiaries.
Motorola Solutions reserves the right to change,
amend or terminate the ESPP at any time,
consistent with the terms of the Plan.
This ESPP Participation Guide constitutes part of a
Prospectus covering the offering of Shares that
have been registered under the U.S. Securities Act
of 1933.
This ESPP Participation Guide also includes a U.S.
Country Supplement summarizing the material U.S.
federal income tax consequences applicable to
Shares issued under the ESPP. Participants are
encouraged to consult their individual tax or
financial advisor for a more complete analysis of
their particular tax situation, including the effects of
any state or local taxes.
Motorola Solutions Employee Stock Purchase Plan (ESPP)
Participants should also note the following
important legal information, including how to
find information about the Company’s business
and financial results. We have filed with the
U.S. Securities and Exchange Commission
(the “SEC”) a registration statement on Form
S-8 relating to the Shares that may be sold to
participants, or otherwise issued to
participants, under the ESPP. The registration
statement contains additional information that
does not appear in this ESPP Participation
Guide. Certain of the Company’s documents
that we file with the SEC, including the
Company’s latest annual report to stockholders
and proxy statement and that are incorporated
by reference in the registration statement, have
also been incorporated by reference into this
ESPP Participation Guide, and are available
without charge on the SEC’s website at
www.sec.gov or upon written or oral request
from the Company. These Company
documents
are
also
available
at
www.motorolasolutions.com/investor. Our
Internet website and the information contained
therein or incorporated therein are not intended
to be incorporated into this ESPP Participation
Guide.
Requests for these documents should be
directed
to
HRdirect
at
[email protected] or by
telephone at US 888-447-6686 (Prompt 3), or
by writing to: Motorola Solutions Rewards
Administration Center, Attn: ESPP, P.O. Box
29005, Phoenix, AZ 85038-9005, U.S.A.
ESPP, Motorola Solutions’ discounted
stock purchase plan for eligible employees,
presents you with an opportunity to acquire
Motorola Solutions stock. As a participant in
the ESPP you may purchase Shares at a 15%
discount through contributions from payroll
deductions. In addition, the Company has
negotiated lower brokerage fees that will apply
to the Shares that are purchased under the
ESPP.
2
Participation in ESPP is entirely voluntary and
there is no guarantee against loss. It is up to you
whether or not you want to participate. The decision
to participate in the ESPP is the same as for any
investment—you should always consider the risks
given your financial situation and whether this
investment makes sense for you. Any decision to
invest in our Shares should be based on
consideration of the information set out in this
ESPP Participation Guide together with the relevant
ESPP Country Supplement(s) and the Company’s
SEC filings, including the possible risks described in
Item 1A of the Company’s latest annual report on
Form 10-K and in its other SEC filings available free
of charge as described above. Additional risks and
uncertainties not presently known to us or that we
currently believe to be immaterial may also
adversely affect our business, and consequently,
the price of our Shares. In addition past financial
performance may not be a reliable indicator of
future performance, and historical trends in the
price of our Shares should not be used to anticipate
results or trends in the price of our Shares in future
periods.
Motorola Solutions Employee Stock Purchase Plan (ESPP)
Data Privacy Notice:
Motorola Solutions respects the confidentiality
of its employees and will keep employee data
secure and confidential in accordance with
Motorola Solutions’ Information Protection
Policy IP-01 (iProtect) which can be found at
http://my.motsolutions.com/portal/site/policy/menuitem.f
8cb8ee9fa2bf519e55df410a5600ba0/
3
Here’s How the ESPP Works
Once you enroll in the ESPP, you will specify a
percentage of pay to be contributed from your pay
each pay period and such amounts will be used to
purchase whole and fractional Shares on the last
trading day of each offering period. The purchase
price of each Share will be 85% of the lower of the
closing price of our Shares on the first trading day
or the last trading day of the offering period.
Example: If each Share trades at US$40 at the
beginning of the six-month period and at US$45 at
the end, your Shares will be purchased at 85% of
US$40 (US$34.00 per share).
You can elect to contribute, by payroll deductions,
1% to 20% (whole percentage only) of your eligible
pay to purchase Shares at the discounted price.
Your eligible pay is defined in question 10 and for
some countries may be further clarified in the
relevant ESPP Country Supplement(s). In certain
countries outside the U.S., due to local laws, a
different contribution method may be in place, and,
if applicable, is described in the relevant ESPP
Country Supplement(s).
During each six-month offering period, your
contributions will accumulate in a non-interest
bearing account. At the end of the offering period,
your contributions will be used to purchase Shares
at the discounted price.
The Company has arranged with Morgan Stanley
Smith Barney (MSSB), a leading U.S. investment
firm, to maintain individual employee accounts for
those who elect to participate. MSSB will maintain
your account in the United States and will e-mail or
mail you a statement following each transaction. It
is the Company’s expectation that Shares will
be available in your account no later than five
business days after the close of each offering
period.
The Company will pay all fees associated with
Share purchases. If you sell Shares from your
ESPP account, the transaction will be subject
to fees charged by MSSB. The current rates
are shown below and are subject to change.
You are responsible for all fees connected with
selling your shares.
IMPORTANT NOTE:
Refer to the relevant ESPP Country
Supplement(s) for general guidance on
country specific information about
eligibility and other legal and taxation
consequences of participating in the ESPP.
FEES
Sales Commission
1 – 500 shares
501-5000 shares
5,001+ shares
US$25 flat fee
US$0.05 per share
US$0.04 per share
In addition to the fees above, there is a MSSB standard
confirm fee of US$5 and an Other Fee imposed on the
transfer of Shares. The Other Fee is paid to the SEC at the
time of sale and is required for all equity trades. Currently,
the Other Fee is equal to US$0.000018 multiplied by the
total principal amount of the proceeds. This fee is subject
to periodic changes. For additional information about this
fee contact MSSB.
Additional Services (per transaction)
Wire transfer fee
US$5
Local currency check
US$10
(Non-U.S. only)
Fed Ex delivery within U.S.
US$25
Fed Ex delivery outside U.S.
US$50
The ESPP limits the number of Shares an
employee may purchase in any one calendar year.
Your contributions will be limited to US$21,250
($25,000 x 85 percent) or less per calendar year
depending on the fair market value of the Shares.
The fair market value of a Share for purposes of
calculating this limitation is the closing price of a
Share determined on the first business day of each
offering period (this fair market value price is
calculated differently than the discounted purchase
price at which you purchase Shares through the
ESPP). ESPP participants who exceed this
contribution limit will receive a refund of their
excess contribution, without interest, shortly after
the end of the offering period in which the
contribution limitation was exceeded (see question
11 for more information about this limitation and an
example of how it is determined).
Motorola Solutions Employee Stock Purchase Plan (ESPP)
4
Enrollment
There are two opportunities to enroll each year:
ENROLLMENT PERIOD
FIRST DAY OF OFFERING PERIOD
LAST
DAY
OF
OFFERING PERIOD
March 2* - 22
April 1**
September 30***
September 2* - 22
October 1**
March 31***
* Online Enrollment is from the second business day of the last month of the offering period to the 22nd of the month of March and
September each year. Therefore the start of the enrollment period may not always commence on 2nd of the month.
** The offering period commences on the first business day of April and October, so may not always commence on 1st of the
month.
*** The offering period ends on the last business day of the months of September and March (the purchase date). So this may not
always be September 30 and March 31.
Note: Reference to “business day” or “trading day” throughout this document relates to days when the
New York Stock Exchange (“NYSE”) is open for trading.
1. Enroll in ESPP and
contribution percentage.
elect
your
• Online – Visit www.benefitaccess.com.
Under “For Select Plans Only”, click “Enroll
or adjust your contributions”. Enter the
Motorola Solutions ticker symbol “MSI” and
follow the simple instructions.
3. Visit the ESPP website at http:my.motsolutions.com under “Pay & Finances”
for full information about the program,
including how to:
• Contact MSSB
• If you are having difficulty with your Internet
access, please call MSSB (see “Working
With Your Broker” for details).
• Sell your shares online or by telephone
(Please note that documents or other
information on this website are not part of this
ESPP Participation Guide unless expressly
incorporated as such.)
2. Complete W-9 or W-8BEN tax form
4. Changing your contribution percentage.
• U.S. Citizens complete the W-9 tax form to
eliminate
backup
withholding
tax
consequences if you sell Motorola Solutions
stock.
During the enrollment period every six months,
you can increase or decrease the percentage
of your pay that you contribute to ESPP, online
via
the
MSSB
website
at
www.benefitaccess.com. Any change to your
contribution percentage is effective from the
start of the next six-month offering period.
• Non-U.S. Citizens complete U.S. IRS W8BEN tax form to certify that you are not a
U.S citizen or resident and you are not
subject to U.S. tax known as “back-up
withholding tax” when you sell your shares.
Complete the relevant tax form either:
• Online - at www.benefitaccess.com. You
can do this once your MSSB Employee
Stock Purchase Plan account has been
created i.e. prior to the first purchase date.
OR
• Mail – Alternatively, obtain from
www.benefitaccess.com from the “Forms
Library” and submit to the address detailed
on the form.
5. Withdrawing from ESPP
You may withdraw from the ESPP at any time
up to the end of the first business day of the
last month of the offering period, and receive a
refund of your contributions for the current
offering period to date, without interest via
payroll. You can do this online via the MSSB
website at www.benefitaccess.com.
If you withdraw during an enrollment period,
you will be withdrawn from the next offering
period. Your contributions for the current
offering period will be used to purchase
shares.
NOTE: In certain countries outside the U.S.,
due to local laws, a different contribution
method may be in place, and, if applicable, is
described in the relevant ESPP Country
Supplement(s).
Motorola Solutions Employee Stock Purchase Plan (ESPP)
5
Working With Your Broker
HOW TO CONTACT MORGAN STANLEY SMITH BARNEY (MSSB)
• Fax: +34-93-316-5295
• Telephone
MSSB Regional Service Centers can assist you in local
languages and time zones. Toll free numbers should be
used when dialing from a country within the specified
toll free range. Alternative telephone numbers are
provided to help you when traveling outside of this
range or if you are located outside of this range.
Language lines are available in all the Service Centers
covering 180 languages:
Americas Region
San Antonio and Kentucky Service Centers
Hours: Mon-Fri 8am-8pm; Sat 10am-4pm U.S.
Eastern Time
Languages: English, French and Spanish.
• Toll Free Number: 877-211-1821 (U.S.,
Canada)
•
•
•
Toll Free Number: +1 888-813-2654 (Mexico)
Alternative telephone number for all other
countries: 210-677-3672
Fax: 210-357-8480
Asia-Pacific Region
Australia Service Center
Hours: 9am-7pm, Australian Eastern Time
Languages: Cantonese, English, Japanese and
Mandarin.
• Toll Free Number: 1800-03-6634 (Australia)
•
•
•
•
•
•
Toll Free Number: 00-800-2484-1111 (China
- toll free number can only be used from
outside Motorola Solutions offices. Alternative
telephone number* should be used when
dialling from a Motorola Solutions office)
Toll Free Number: 001-800-2484-1111 (Hong
Kong, Singapore, South Korea)
Toll Free Number: 00-800-2484-1111 (Taiwan)
Toll Free Number: 001-010-800-2484-1111
(Japan)
Alternative telephone number for all other
countries: +612-8225-0676
Fax: +612-8225-0689
EMEA Region
Barcelona Service Center
Hours: 8am-6pm, Central European Time
Languages: English, French, German, Hebrew,
Spanish, Swedish, Danish and Finnish.
• Toll Free Number: 00-800-1212-5935 (Austria,
Denmark, France, Germany, Ireland, Israel,
Portugal, Spain, Sweden, UK)
• Toll Free Number: 00-080-0440-1969 (India)
• Alternative telephone number for all other
countries: +34-93-316-5935
Motorola Solutions Employee Stock Purchase Plan (ESPP)
Mail
For general inquiries address your mail to:
USCC, Attn: Stock Plan Operations
Morgan Stanley Smith Barney
Global Stock Plan Services
100 Citibank Drive
Building 3, 2nd Floor
San Antonio, Texas 78425, U.S.A.
SELLING MOTOROLA SOLUTIONS STOCK
You can instruct MSSB to sell your shares the
following ways:
• Access the MSSB website at
www.benefitaccess.com.
• Call MSSB and speak to a Customer Service
Representative.
Orders will be entered for execution when the
NYSE is open. During NYSE hours you will
receive immediate confirmation of your sale price
if you have placed a market order online. You will
also receive written confirmation from MSSB.
You may choose to have your sale proceeds sent
to you via wire transfer, or by U.S. dollar check.
You may also choose to have your sale proceeds
sent to you via a local (non-U.S.) currency check
except if you are located in Argentina, Brazil,
Czech Republic, Israel, Malaysia, Poland, South
Korea or Taiwan.
To request a wire transfer or local currency check,
you must have U.S. IRS W-8BEN tax form
certification on file with MSSB (see question 8 for
details). You can find this form online at
www.benefitaccess.com. If your W-8BEN is not
on file, you will receive your check or wire transfer
in U.S. dollars.
MSSB must have your wire transfer instructions on
file before your sale proceeds can be transferred.
The method you use to initiate your wire transfer
will determine how your proceeds are distributed.
• If you place instructions online at:
www.benefitaccess.com your sale proceeds
will be in local currency.
• If you place your instruction with a Customer
Service Representative*, you have a choice
for your sale proceeds to be in local currency
or U.S. dollars.
* You must complete the U.S. Dollar Wire Instructions or
Currency Wire Instructions online at www.benefitaccess.com.
Alternatively, complete a Letter of Authorization to Transfer
Funds form & fax to MSSB. This form & pre-filled fax cover
sheet are available from the Forms Library located in the
Customer Service Section of the MSSB website.
6
Frequently Asked Questions
1. What is ESPP?
The Company created the ESPP to provide eligible
Motorola Solutions employees an opportunity to
purchase Shares at a 15% discount through voluntary
payroll deductions.
2. How does ESPP work?
ESPP allows eligible Motorola Solutions employees to
contribute, by payroll deductions each pay period, 1%
to 20% (whole percentages only) of their eligible pay to
purchase Shares at a discounted price. Beginning with
the April 2, 2012 offering period the maximum
percentage of contribution was increased from 10% to
20%. (In certain countries outside the U.S., due to local
laws, a different contribution method may be in place,
and, if applicable, is described in the relevant ESPP
Country Supplement.) Payroll deductions are made
and accumulated in your account during the
consecutive six-month offering periods described
below. On the last trading day of each six-month
period, ESPP contributions are used to purchase
Shares. The purchase price of each Share will be 85%
of the closing price of a Share using the lower of the
closing price on either the first or last trading day of the
offering period.
3. Who is eligible to participate in ESPP?
You are eligible if you are an active employee
(including part-time active employees) of the Company
or one of its qualified subsidiaries (which has been
designated to participate in ESPP
In order to be eligible for the October to March offering
period, your employment must have commenced on or
before 1 September immediately preceding such
period. Similarly, in relation to the April to September
offering period, your employment must have
commenced on or before March 1 immediately
preceding such period. In addition, in order to be
eligible for the purchase of shares for the October to
March offering period, you must have been
continuously employed throughout the offering period
by Motorola Solutions or a member of the Motorola
Solutions group of companies which is participating in
the ESPP and must still be regularly employed on the
last business day of March. Similarly, in relation to the
April to September offering period, you must have
been continuously employed throughout the offering
period and must still be regularly employed on the last
business day of September.
Eligibility shall be determined by the Motorola Solutions
Human Resources department and such determination
shall be final.
IMPORTANT: See the relevant ESPP Country
Supplement(s) for additional country specific
eligibility.
4. Who is not eligible to participate in ESPP?
Among those ineligible to participate in ESPP are
independent contractors, consultants, agency workers
and leased employees.
See the relevant ESPP Country Supplement(s) for
additional country specific eligibility.
5. What are the offering periods?
The ESPP has consecutive six-month offering periods
beginning on the first trading day on or after each April
1 and each October 1.
6. How do I join?
There are two enrollment periods each year in March and September. Each enrollment period begins on the second
business day of the last month of the offering period and extends to the 22nd of the month. If you are eligible to
participate, you may become a participant by enrolling through the online enrollment process at
www.benefitaccess.com. See the relevant ESPP Country Supplement(s) for details about enrollment in the event of
any local variation.
ENROLL BETWEEN
CONTRIBUTIONS BEGIN WITH THE PAY
PERIOD ENDING ON OR AFTER
STOCK PURCHASE
EFFECTIVE
March 2* - 22
April 1**
September 30***
September 2* - 22
October 1**
March 31***
Your enrollment will remain in effect for future offering periods until you change it.
* Online Enrollment is from the second business day of the last month of the offering period to the 22nd of the month of March and September each
year. Therefore the start of the enrollment period may not always commence on 2nd of the month.
** The offering period commences on the first trading day of April and October, so may not always commence on 1st of the month.
*** The offering period ends on the last trading day of the months of September and March (the purchase date). So this may not always be September
30 and March 31.
Motorola Solutions Employee Stock Purchase Plan (ESPP)
7
7. What is the purpose of the U.S. IRS W-9 tax
form?
If you are a U.S. citizen or a U.S. resident alien
claiming exemption from backup withholding tax
consequences when you sell your Shares, you are
required to complete the IRS W-9 tax form. If you do
not complete this form, backup withholding tax will be
withheld from the sales proceeds at a 28% tax rate
(subject to change).
8. What is the purpose of the U.S. IRS W-8BEN tax
form?
Completing this form certifies you are not a U.S. citizen
or a U.S. resident alien and eliminates backup
withholding tax consequences if you sell your Shares.
If you do not complete this form, backup withholding
tax will be withheld from the proceeds of any stock
sales at a 28% tax rate (subject to change). In
addition, 30% U.S. federal income tax (subject to
change) will be withheld at source when dividends are
paid to a non-U.S. resident or non-U.S. citizen unless
the W-8BEN is in place. If the W-8BEN is in place, you
may be able to claim a reduced rate of, or exemption
from, U.S. withholding tax on such dividends as a
resident of a foreign country with which the U.S. has
an income tax treaty.
A W-8BEN tax form will automatically be issued to all
new participants with their “Welcome Pack” from
MSSB. Alternatively, participants may complete the W8BEN certification online through the MSSB website at
www.benefitaccess.com once their account is open.
Paper forms will continue to be accepted as well.
9. If I decide not to join ESPP when it is first
available, will I have another opportunity?
Yes. You may enroll during any future enrollment
period in which ESPP is in effect. However, you may
not join the current six-month offering period after the
enrollment for that offering period has ended.
10. How much may I contribute to ESPP?
You can elect to contribute, by payroll deductions, 1%
to 20% (whole percentages only) of your eligible pay.
Eligible pay includes base wages or salary payable in
cash during the pay period before deduction required
for income tax, social contributions or other similar
withholding but shall not include commissions,
bonuses, annual awards, equity compensation (such
as stock options or restricted stock units), other
incentive payments, expense reimbursements,
allowances or other compensation directly or indirectly
paid during the pay period. Lump sum merit increases
and 13th and 14th month salary payments (regardless
of whether they are designated as bonuses or some
other name) are considered “base wages or salary”
and as such are part of eligible pay. To the extent
further clarification of “eligible pay” is required in
individual countries, those clarifications will be included
in the applicable ESPP Country Supplement(s).
Please consult the ESPP Country Supplement for your
work country (and your pay country if that is different
from your work country).
During each six-month offering period, your
contributions will accumulate in a non interest-bearing
account. In certain countries due to local laws, a
different contribution method may be in place, and, if
applicable, is described in the relevant ESPP Country
Supplement(s). Contributions are only deducted after
tax and pay related social Insurance have also been
deducted from your pay. At the end of the offering
period, your contributions will be used to purchase
Shares at the discounted price.
11. Is there a limit to the amount of Shares I may
purchase through ESPP?
Yes. ESPP limits the number of Shares a participant
can purchase in any one calendar year to no more
than US$25,000 in total fair market value of the
Shares. The fair market value of a Share for
purposes of calculating this limitation is the
closing price of a Share on the first trading day of
each offering period (called the grant date). Please
be aware that this fair market value price is
determined differently than the discounted
purchase price at which you acquire Shares
through ESPP. This requirement limits the amount of
contributions that can be made under the ESPP to no
more than $US21,250 because Shares are purchased
at a discount ($US25,000 x 85 percent). However,
depending on the fair market value of the Shares
on the first trading day of each offering period, this
limitation could be substantially less than
$US21,250 (see example below).
The limitation for the calendar year is calculated by
adding the fair market value of Shares purchased in
the October to March offering to the fair market value
of the Shares purchased during the April to September
offering period. As a result, even if you have not
Motorola Solutions Employee Stock Purchase Plan (ESPP)
8
exceeded this limitation during the October 1 through
March 31 offering period, you will continue to be
subject to this limitation during the April 1 to
September 30 offering period. The number of Shares
that you purchased in the October 1 through March 31
offering period will be aggregated with any Shares you
purchase in the April 1 to September 30 offering and
cannot exceed this limitation.
ESPP participants who exceed this contribution limit
will receive a refund of their excess contribution,
without interest, shortly after the end of the offering
period in which the contribution limit was exceeded.
These participants are not eligible to participate in
ESPP again until the next calendar year, commencing
in October, when their participation automatically
resumes at their last recorded ESPP election
percentage, unless they have chosen to withdraw or
change their contribution percentage.
For ESPP participants located in non-U.S. countries,
the US$25,000 limit will be calculated based upon the
exchange rate as of the first trading day of the October
to March offering period. Refunds will be calculated
based upon the exchange rate as of the last trading
day of the April to September offering period, unless
the limit is reached prior to the end of the October to
March offering period, in which case the exchange rate
as of the last trading day of the October to March
offering period shall be used.
Example, using hypothetical stock prices:
Offering Period
Shares Purchased
Oct. 1, 2011 to
$10,500 (contribution amount) divided by $29.75*
Mar. 31, 2012
(discounted purchase price) = 352.941 shares
$ Fair Market Value
352.941 (shares purchased) x $44.00** (fair
market value) = $15,529.40
$25,000 less $15,529.40 = $9,470.60
Maximum fair market value available to
purchase in next offering period
April 1, 2012 to
263.072 shares (See $ fair market value column)
$9,470.60 (Maximum contribution permitted)
September 30, 2012
multiplied by $30.60*** (discounted purchase price) divided by $36.00*** (fair market value) =
= $8050 (Maximum contribution amount)
263.072 shares
In the second offering period, only 263.072 shares could be purchased within the limit. Total ESPP contributions permitted
under ESPP for the two offering periods equal $18,550 (the sum of $10,500 and $8,050). Any amount contributed above
this in the second offering period is refunded, without payment of interest, in the next available pay period in October.
* 85% of the closing price of the Shares on March 31, 2012 ($35.00). (Closing price of the Shares on October 1, 2012 ($44.00) is higher so is not
applicable)
**$44.00 is the closing price on Oct. 1, 2011
*** 85% of the closing price on Apr. 1, 2012 ($ 36.00). (Hypothetical closing price of the Shares on Sept. 30, 2012 ($45.00) would be higher so would
not be applicable)
**** $36.00 is the opening price on Apr. 1, 2012
12. Is there any other limit on the number of Shares
I may purchase during an offering period?
16. Can I change the amount of my payroll
deductions for ESPP?
Yes. No participant may purchase more than 14,285
Shares in any given offering period.
You cannot increase or decrease the percentage you
are contributing during an offering period. However,
you may change your contribution percentage during
any enrollment period through the MSSB online
enrollment process. The change will be effective for
the next offering period. If your salary increases or
decreases (for example, because you increase or
decrease your hours) your contributions will be
increased or decreased automatically to the specified
percentage of your new salary.
13. How many Shares are offered under the ESPP?
There are 32,757,142 Shares authorized for sale under
the ESPP.
14. May I make a cash contribution to ESPP in
addition to my payroll deductions?
Contributions are made only through payroll
deductions except in certain limited circumstances in
non U.S. countries due to local laws. Participating
Motorola Solutions employees should check the
relevant ESPP Country Supplement(s) for country
specific detail on this question due to local variation.
15. Do I receive
contributions?
interest
on
my
ESPP
No. ESPP contributions will be held in a non-interestbearing account during the offering period.
Motorola Solutions Employee Stock Purchase Plan (ESPP)
17. May I withdraw from ESPP and stop
contributing?
Yes. You may withdraw from ESPP at any time up to
the end of the first business day of the last month of
each offering period. If you withdraw, you will stop
contributing to ESPP and all contributions for the
current offering period will be refunded to you without
interest as soon as is practicable via payroll, after the
processing of your timely online withdrawal. Once you
withdraw, you will not be able to participate in the next
offering period unless you re-enroll.
9
18. When are new hires eligible to participate in
ESPP?
New hires who are eligible Motorola Solutions
employees may join the ESPP during any enrollment
period, provided they are hired on or before March 1
for the April to September offering period and
September 1 for the October to March offering period.
Example: If a new employee starts work on March 2,
he or she will not be able to participate in the April to
September offering period and must wait until the next
enrollment period (September 2-22). However, an
employee who begins his or her employment on March
1 will be able to participate in the April to September
offering period.
19. When can I start participating in ESPP if I join
Motorola Solutions as part of an acquisition?
If you are an eligible Motorola Solutions employee, you
may join the ESPP during any enrollment period,
provided your first day of employment is on or before
March 1 for the April to September offering period and
September 1 for the October to March offering period.
Example: If your employment as a Motorola Solutions
employee begins on March 2, you will not be able to
participate in the April to September offering period
and must wait until the next enrollment period
(September 2-22). However, if your Motorola Solutions
employment begins on March 1, you are eligible to
participate in the April to September offering period.
20. What price will I pay for Shares?
The purchase price of each Share will be 85% (100% 15% discount) of the lower of:
• The closing price of a Share on the first trading
day of the offering period, or
• The closing price of a Share on the last trading
day of the offering period.
The closing price of the Shares will be determined as
reported by the NYSE Composite Transactions as
reported online in the Wall Street Journal at
www.online.wsj.com.
Example: If the closing price of a Share on the first
trading day of the offering period is US$40 and the
closing price of a Share on the last trading day of the
offering period is US$45, your purchase price through
ESPP is US$34.00 (US$40 x 85%). If your ESPP
contributions for the offering period were US$500, you
would purchase 14.7058 shares of Motorola Solutions
stock (US$500 divided by US$34).
The above example is for illustrative purposes only and
does not reflect actual or expected trading prices of the
Shares.
21. What happens to the Shares purchased with
my payroll deductions?
available in your account no later than five
business days after the close of each offering
period. MSSB has been retained by Motorola
Solutions to establish accounts for ESPP participants
to hold and handle sales of Shares acquired through
the ESPP.
22. Who administers ESPP?
The Committee administers ESPP. The Committee, in
its discretion, may delegate its administrative tasks, if
determined to be advisable.
Each member of the Committee will serve for so long
as the Board deems appropriate and may be removed
by the Board at any time.
Information about the members of the Committee and
their contact information is available from HRdirect at
[email protected] or by telephone
at U.S. 888-447-6686(prompt 3).
MSSB is the service provider and coordinates the
efforts of the Company’s’ transfer agent and registrar,
BNY Mellon Shareholder Services, to facilitate your
transactions.
23. When do I own Shares purchased through
ESPP?
On the last trading day of each offering period, all of
your ESPP contributions will be used to purchase
whole and fractional Shares at the discounted
purchase price. You own your Shares once they are
actually purchased and allocated to your account at
MSSB.
24. Will I automatically receive stock certificates
when I purchase Shares through ESPP?
No. You will not be issued stock certificates when you
purchase Shares through ESPP. Instead Shares
purchases through ESPP will be held by MSSB in
“street name” (without charge). The number of Shares
credited to your account will be shown on your account
statement.
25. Will I have the same rights as any other
shareholder of Motorola Solutions?
Yes, if you have at least one full Share in your account.
These rights include the right to vote and receive
dividends (if any are declared) and the right to receive
information generally sent to shareholders, such as the
annual report and proxy statement.
26. Can my rights to purchase Shares with payroll
deductions be assigned to anyone else?
No. You cannot transfer or pledge your right to receive
Shares. You may purchase the Shares in your name
only.
As soon as administratively feasible after the end of
each offering period, your Shares will be allocated to
an account established for you at MSSB. It is the
Company’s expectation that the Shares will be
Motorola Solutions Employee Stock Purchase Plan (ESPP)
10
27. What statements and/or confirmations will I receive regarding my ESPP account?
You will receive the following documents:
NOTICE
Enrollment confirmation
Welcome email and IVR
PIN*
Account Statements
WHEN YOU WILL RECEIVE IT
Online confirmation following your initial enrollment in ESPP
Prior to your first stock allocation (April/ October)
Each April and October following the stock purchases, after each dividend reinvestment
and after any other activity in your account
U.S. Citizens and Residents
IRS Form 1099-DIV
By January 31 of each year
(Dividends)
IRS Form 1099-B
By January 31 of each year
(Stock Sales)
Non-U.S. Citizens
U.S. IRS Form 1042-S
By March 15 of each year
(Dividends)**
* IVR = Interactive Voice Response system, available via MSSB phone service in U.S only.
**U.S. IRS Form 1042-S is an information statement that displays dividend activity in your account. It should be kept safe by you for the purpose of
completing your tax assessment.
All notices, confirmations, statements, tax forms and checks will be either e-mailed or mailed to your address which
is held on Employee Self Service (ESS). Active employees must change their address in Employee Self Service
(ESS). If you are retired or no longer employed by Motorola Solutions, it is your responsibility to contact MSSB via
phone or postal service to inform them of any address change.
All employees have a responsibility to check their pay slips to ensure that the correct percentage and deduction for
ESPP has been taken. In the event of any error, employees should contact Payroll or HRdirect at their earliest
opportunity to ensure amendments are made in the following month’s pay. Errors that are not reported in a timely
manner will not be corrected retrospectively.
Motorola Solutions Employee Stock Purchase Plan (ESPP)
11
contact them via phone or postal service if you have a
28. Can I call Morgan Stanley Smith Barney with
question about your account.
questions?
Participants should reference the relevant ESPP
Yes. Customer Services Representatives are
Country Supplement(s) for any different policies that
available to walk you through each transaction,
may apply due to local variation.
explain the details of the ESPP, answer your
questions, and produce reports detailing Shares 31. Can I name a beneficiary for my ESPP
purchased and sold.
account?
29. What happens if I go on a leave of absence or No. In the event of your death, payment of funds not
a disability leave?
used to purchase Shares will be refunded, and any
Shares already credited to your ESPP account will be
If you go on an approved leave of absence for any
transferred to your heirs (person or persons to whom
reason your payroll deductions for ESPP will continue
your ESPP interests pass by will or by the laws of
during your leave of absence, if you remain on the
descent or distribution) or the executor of your estate.
payroll of the Company or any of its designated
subsidiaries. If you are not paid through the Company 32. Who should an executor or person inheriting
payroll or any of its designated subsidiaries during rights under the ESPP contact concerning Shares
your leave of absence, your payroll deductions for held at Morgan Stanley Smith Barney?
ESPP will stop. Any current offering period payroll
The executor or personal representative must contact
deductions will still be used to purchase Shares at the
MSSB on 1.877.295.2028 for U.S. citizens or
end of the offering period. Upon reinstatement from a
1.312.419.3327 for non-U.S. citizens (both U.S.
leave of absence, payroll deductions for ESPP will
Permanent Residents and Non U.S. Residents) and
resume automatically unless you withdrew from the
request information to open an estate account. This
ESPP before you were reinstated to active
information may include the following forms: new
employment.
account form, client agreement and affidavit of
You may withdraw from ESPP while you are on a domicile. The executor or personal representative
leave of absence in the same way that active may also need to provide a copy of the Certificate of
employees are permitted to withdraw as explained Appointment naming the executor or personal
under question 17.
representative of the estate and an original death
certificate. Once the estate account is established, the
Participants should reference the relevant ESPP
executor or personal representative can make
Country Supplement(s) for full country specific detail
decisions regarding the disposition of Shares acquired
on this question, due to local variation.
through the ESPP.
You may rejoin ESPP during the next enrollment
33. What happens to my accumulated payroll
period if you are an active employee. If you are unable
deductions if I leave Motorola Solutions (or any
to access the online website to withdraw, please
designated subsidiary) as part of a divestiture*
contact HRdirect for assistance.
prior to the end of an offering period?
30. What happens to my ESPP account if I retire,
If the divestiture occurs within the first 3 months of an
am otherwise no longer employed by the
offering period, you will be withdrawn from the ESPP
Company, die or become ineligible to participate
and any accumulated payroll deductions will be
in the ESPP?
returned to you without interest, via payroll. If the
If you retire, are otherwise no longer employed by divestiture occurs in the last 3 months of an offering
Motorola Solutions or one of its qualified subsidiaries, period, your accumulated payroll deductions will be
die or become ineligible to participate in the ESPP used to purchase Shares on the last trading day of
prior to the end of an offering period, you will be the offering period unless you withdraw from the
withdrawn from the ESPP. Any accumulated payroll ESPP as described in question 17.
deductions for the current offering period will be * For purposes of the ESPP, “divestiture” refers to a sale, lease,
returned to you without interest, via payroll. In the outsourcing arrangement or any other type of asset transfer or
event of your death the accumulated funds will be transfer of any portion of a facility or any portion of a discrete
paid directly to your heirs or estate. If the date of your organizational unit of Motorola Solutions or a designated subsidiary
under ESPP.
retirement/termination is the last trading day of an
offering period, your contributions for the current 34. What happens to my accumulated payroll
offering period will be used to purchase Shares. Your deductions if I make a permanent transfer of pay
ESPP account will be retained with MSSB until it is country during an offering period?
closed (e.g. you sell your Shares or transfer your
Subject to certain exceptions, if you change country
account to another broker or the funds or Shares held
payroll during an offering period, on your date of
in the account are distributed to your estate).
transfer you will be automatically withdrawn from the
MSSB will not charge a maintenance fee for retaining ESPP for that offering period and any accumulated
your ESPP account. MSSB does not communicate payroll deductions will be returned to you without
with participants via e-mail after they are no longer interest via payroll. You will be eligible to participate
Motorola Solutions employees. However, you may in the offering period following your transfer, if you are
Motorola Solutions Employee Stock Purchase Plan (ESPP)
12
eligible under the terms of the ESPP in the new
country.
prohibited from selling Shares while in possession of
material non-public information about the Company.
You should review your obligations under the
35. What happens to any dividends that I may
Motorola Solutions insider trading policy in connection
receive on my Shares?
with any sale. The policy can be found at
Any dividends you receive will be automatically http://compass.mot-solutions.com/go/OECG17. It
reinvested (in additional Shares purchased at the is the Company’s expectation that the Shares will
current market value), subject to local law. You will be available in your account no later than five
receive a confirmation of the reinvestment from business days after the close of each offering
MSSB. A MSSB Customer Service Representative period.
can assist participants who prefer to receive dividends
See the relevant ESPP Country Supplement(s) for a
in cash (via a US dollar check). Unless otherwise
general guide to the taxation consequences of
provided, any dividends you receive are taxable to
participating in the ESPP, including selling Shares
you in the year you receive them whether reinvested
you purchased under ESPP. Please consult your tax
or paid in cash. See the relevant ESPP Country
advisor before making any decisions that will affect
Supplement(s) for a general guide to the taxation
your taxes.
consequences of participating in the ESPP.
39. What is the stock symbol for the Shares and
36. What happens in the event of a stock split or
where can I check the current Share price?
stock dividend?
The stock symbol for the Shares is “MSI” and you can
A stock split or stock dividend results in a stockholder
check the price of a Share in a variety of different
owning a different number of shares but does not
ways including:
change the stockholder’s proportionate ownership of
• Access
the
MSSB
website
at
the company. As a result, you may own a different
www.benefitaccess.com (stock price is 20
number of Shares even though your proportionate
minutes delayed).
ownership of the Company remains the same.
• Call MSSB
For example, in the event of a 2 for 1 stock split a
• Check the financial section of most major daily
stockholder who owned 100 shares of stock trading at
newspapers, which list the closing stock prices
US$40 per share prior to a 2 for 1 stock split would
on the NYSE Composite Transactions for the
own 200 shares trading at an adjusted price of US$20
preceding trading day.
per share immediately after the stock split.
• Access various financial and securities websites.
If the Company stock splits, the price of Shares will be
adjusted to reflect the split. The following is an
example of the effect on your purchase price under
ESPP if the Company stock splits 2 for 1 during an
ESPP offering period:
PREPOSTSPLIT
SPLIT
Closing price of a Share US$40 US$20
($40/2= $20)
on first trading day of
offering period:
Closing price of a Share US$45 US$22.50
($45/2=$22.
on the last trading day of
50)
offering period:
Your purchase price under ESPP is US$17.00
(US$40/2 x 85%).
40. Who may sell my Shares?
The above example is for illustrative purposes only
and does not reflect actual or expected trading prices
of the Shares.
In addition to the fees above, there is a MSSB standard confirm
fee of US$5 and an Other Fee imposed on the transfer of
Shares. The Other Fee is paid to the SEC at the time of sale and
is required for all equity trades. Currently, the Other Fee is equal
to US$0.000018 multiplied by the total principal amount of the
proceeds. This fee is subject to periodic changes. For additional
information about this fee contact MSSB.
37. Will I be charged fees or commissions for
Shares purchases?
No. Motorola Solutions will pay all fees to purchase
Shares and maintain your account. However, you will
be charged fees in connection with the sale of Shares
in your ESPP account. See question 41.
38. Can I sell my Shares right away?
Yes. You may sell full and fractional Shares once they
are credited to your account subject to Securities and
Exchange Commission insider trading rules. You are
Motorola Solutions Employee Stock Purchase Plan (ESPP)
Authorization to sell Shares will only be accepted
directly from ESPP participants. Spouses, brokers
and financial advisors may not initiate sale
transactions.
41. Are there any fees or commissions for the
sale of Shares in my ESPP account?
MSSB will charge a sales commission based on the
following schedule:
Sales Commission
1 – 500 shares
501-5000 shares
5,001+ shares
US$25 flat fee
US$0.05 per share
US$0.04 per share
Example of fees on a sale of 100 Shares trading
at US$45, and employee requests to receive a
wire transfer:
Flat
US$25
= US$25
Fee:
Confirm
US$5
= US$5
Fee:
13
Other
Fee:
(100shares x US$45)
=US$4,500x
US$0.000018
Wire
Transfer US$5
Fee:
TOTAL US$25+ US$5+
FEES: US$0.081 + US$5
= US$0.081
= US$5
=US$35.081
NOTE: your bank may charge you fees for
check encashment and currency exchange
conversions.
42. What is a market sell order?
A market sell order is an order to immediately sell
your Shares based on the current market price of a
Share. The order will be placed immediately (during
the NYSE market hours) after the request to sell is
received and accepted by MSSB.
(U.S. dollars or local currency) and US$10 fee for
local currency checks.
MSSB must have your wire transfer instructions on
file before your sale proceeds can be transferred.
The method you use to initiate your wire transfer
will determine how your proceeds are distributed.
IF YOU PLACE YOUR
YOUR SALE
INSTRUCTIONS:
PROCEEDS
WILL BE IN:
Online
Local Currency or
www.benefitaccess.com
U.S. Dollars
Customer Service
U.S. Dollars
Representative*
43. What is a limit sell order?
A limit sell order is an order to immediately sell your
Shares based on a specified limit price (above the
current market price) set by you. When the Share
price reaches the limit established by you, your
order is submitted for execution. This type of order
remains in effect until it is either executed (Shares
are sold) or canceled by you. You can place a limit
sell order, either online or by telephone.
44. How do I access my brokerage account or
sell Shares acquired through ESPP?
Once you have purchased Shares through ESPP,
you can access your brokerage account and initiate
transactions in the following ways:
• Access
the
MSSB
website
at
www.benefitaccess.com.
• Call MSSB and speak to a Customer Service
Representative.
• If you are experiencing difficulty accessing your
MSSB ESPP account online, call a Customer
Service Representative.
45. If I sell my Shares will I receive a
confirmation?
You will receive a MSSB confirmation, or “confirm”,
after each sale. You can elect to have your
confirmation mailed via regular U.S. mail and/or
emailed to you. If emailed, you will receive a
notification that a new document has been posted
to your MSSB online account. Confirms are mailed
/posted the next business day following the date of
the sale.
46. What alternatives are available for the
delivery of my sale proceeds?
You may choose to have your sale proceeds sent to
you via wire transfer or U.S. dollar check. You may
also choose to have your sale proceeds sent to you
via a local (non-U.S. ) currency check except if you
are located in Argentina, Brazil, Czech Republic,
Israel, Malaysia, Poland, South Korea and Taiwan.
There is an additional US$5 fee for wire transfers
Motorola Solutions Employee Stock Purchase Plan (ESPP)
14
*You must complete the U.S. Dollar Wire Instructions or
Currency Wire Instructions online at www.benefitaccess.com.
Alternatively, complete a Letter of Authorization to Transfer
Funds form and fax to MSSB. This form and pre-filled fax cover
sheet are available from the forms library located in the
Customer Service Section of the MSSB website.
NOTE: Employees in Argentina, Brazil, Czech
Republic, Israel, Malaysia, Poland, South Korea
and Taiwan should reference the relevant ESPP
Country Supplement(s) for full country specific
detail on this question, due to local variation.
47. Is there a guarantee against loss through
ESPP?
No. There is no guarantee against loss. The
value of Shares your purchase could go up or
down. The value may also be influenced by the
volatility of the stock market. In addition to
considering the potential value of this investment, it
is also important to consider the possible risks
described in Item 1A of the Company’s latest
annual report on Form 10-K and its other SEC
filings available free of charge on the SEC’s website
at www.sec.gov and on Motorola Solutions’
website
at
http://investors.motorolasolutions.com/.
Additional risks and uncertainties not presently
known to us or that we currently believe to be
immaterial may also adversely affect our business
and, accordingly, the price of our Shares. In
addition, past financial performance of the
Company may not be a reliable indicator of future
Motorola Solutions Employee Stock Purchase Plan (ESPP)
performance and historical trends of Shares trading
prices should not be used to anticipate results or
trend in future periods.
48. What records do I need to keep for tax
purposes?
It is very important to keep all statements that
MSSB emails or sends to you because the
information on the statements verifies your actual
cost of the Shares. You can access your personal
account information at www.benefitaccess.com or
on the ESPP statements and purchase/sales
confirmations you receive from MSSB.
When you sell the stock, you may need to know
your cost in order to determine the proper amount
of gain or loss on the sale.
Historical information about ESPP offering periods
is available at http://myhr.mot-solutions.com
under “Pay & Finances” (please note that
documents or other information available on this
website are not part of this ESPP Participation
Guide unless expressly incorporated as such).
49. What are the tax consequences for me of
participating in the ESPP?
See the relevant ESPP Country Supplement(s) for
a general guide to the taxation consequences of
participating in the ESPP. Please consult your tax
advisor before making any decisions that will affect
your taxes.
15
U.S. Country Supplement
MOTOROLA SOLUTIONS AMENDED AND RESTATED EMPLOYEE STOCK
PURCHASE PLAN OF 1999 (ESPP)
THIS ESPP U.S. COUNTRY SUPPLEMENT IS TO BE READ WITH THE ESPP
PARTICIPATION GUIDE FOR ALL ELIGIBLE EMPLOYEES OF MOTOROLA
SOLUTIONS, INC. DATED MARCH 2, 2012. BOTH DOCUMENTS CONTAIN
IMPORTANT INFORMATION ABOUT PARTICIPATION IN THE ESPP AND ARE
AVAILABLE AT http://compass.mot-solutions.com/go/136259347. A PAPER
COPY OF THESE DOCUMENTS MAY BE OBTAINED BY CONTACTING
HRDIRECT AT [email protected] OR BY TELEPHONING U.S.
888-447-6686 (PROMPT 3). ALTERNATIVELY WRITE TO MOTOROLA
SOLUTIONS REWARDS ADMINISTRATION CENTRE, ATTN: ESPP, P.O. BOX
29005, PHOENIX, AZ 85038-09005, U.S.A. PLEASE READON BOTH
DOCUMENTS.
This U.S. Country Supplement dated March 2, 2012 (“Supplement”) to the ESPP
Participation Guide for all Eligible Employees of Motorola Solutions, Inc. dated March
2, 2012 (“ESPP Participation Guide”) is a summary of additional information relating
to participation by U.S. employees in the Motorola Solutions Amended and Restated
Employee Stock Purchase Plan of 1999 (“ESPP”). Motorola Solutions, Inc.
(“Company” or “Motorola Solutions”) is providing you with this Supplement because
your participation in the ESPP is governed by the laws of the U.S. The ESPP became
effective for U.S. eligible employees on October 1, 1999. This Supplement is based
on legal documents. If there is a disagreement between this Supplement and the
legal documents, the legal documents always govern. Capitalized terms used but not
otherwise defined herein shall have the meanings given to them in the ESPP
Participation Guide.
The offering of the ESPP in the United States is intended to be qualified under
Section 423(b) of the Internal Revenue Code (“Code”). However, the ESPP is not
qualified under Section 401(a) of the Code and is not subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended.
This Supplement constitutes part of a U.S. Prospectus covering shares of Motorola
Solutions common stock (“Shares”) that have been registered under the U.S.
Securities Act of 1933.
Motorola Solutions Employee Stock Purchase Plan (ESPP)
16
Frequently Asked Questions – U.S. Only
S.1. How are ESPP contributions calculated?
Example: Assuming a 10% ESPP election:
Bi-weekly ESPP eligible pay*
Less pre-tax deductions, e.g., 401(k) (estimate)
Sub-total
Less payroll taxes (at 20%)
Sub-total
Less:
ESPP Contributions ($5,000 x 10%=$500)
Total bi-weekly net pay
$5,000.00
$250.00
$4,750.00
$950.00
$3,800.00
- $500.00
$3,300.00
* The above example is for illustrative purposes only. Please refer to the definition of "eligible pay" in the
ESPP Participation Guide question 10.
S.2. Are my ESPP contributions deducted on a pretax basis?
No. The Internal Revenue Service (“IRS”) requires that discounted stock purchase
plan contributions be made on an after-tax basis. This means ESPP contributions are
subject to federal, state and local tax withholding (where applicable) and will be
included as taxable wages on your year-end W-2 form.
Taxation
The statements set out in the following questions and answers are based on the tax
and other laws concerning the purchase of shares of the Company’s common stock
(“Shares”) under the ESPP in the United States as of January 26, 2012. Such laws
are often complex and change frequently. As a result, the information contained in
this Supplement may be out of date at the time you purchase or sell Shares you
acquire under the ESPP.
In addition, this Supplement is general in nature and does not discuss all of the
various laws, rules and regulations that may apply. It may not apply to your particular
tax or financial situation, and the Company is not in a position to assure you of any
particular tax result. Accordingly, you are strongly advised to seek appropriate
professional advice as to how the tax or other laws in the country(ies) you are
subject to tax in apply to your specific situation.
If you are a citizen or resident of another country (or are considered as such for local
law purposes) or if you transferred employment to another country after enrolling in
the ESPP, the information contained in this Supplement may not be applicable to you.
This Supplement is not and was not intended or written to be used, and it cannot be
used, for the purposes of avoiding penalties that may be imposed on the taxpayer.
S.3. If I enroll in the ESPP, what are the tax implications?
You will not be subject to tax when you enroll in the ESPP. Amounts deducted from
your payroll continue to form part of your taxable income. Amounts applied to
purchase Shares under the ESPP are therefore after-tax amounts.
Motorola Solutions Employee Stock Purchase Plan (ESPP)
17
S.4. When I purchase Shares under the ESPP, what are the tax implications?
When Shares are purchased for you under the ESPP, you will not be subject to tax as
the ESPP is intended to be a qualified plan under Code Section 423.
S.5. If dividends are paid on the Shares, what are the tax implications?
In the event that the Company exercises its discretion to pay a dividend on the
Shares, any dividends paid will be subject to U.S. federal tax at a maximum rate of
15%. The dividends will be taxable in this manner regardless of whether you
automatically reinvest the dividends in the purchase of additional Shares.
S.6. When I sell my Shares, what are the tax implications?
When you subsequently sell the Shares acquired under the ESPP, the tax treatment
applicable to you as a result of the sale will depend on how long you held the Shares
prior to selling the Shares.
-
Qualifying Disposition: If you held the Shares for (i) more than two years after
the beginning of the offering period pursuant to which you acquired such Shares,
and (ii) more than one year after the date such Shares were transferred to you
(which will generally occur at the time of purchase), you will recognize ordinary
income at the time of sale in an amount equal to the lesser of (i) the difference
between the sales proceeds and the purchase price of the Shares, and (ii) the
purchase price discount computed as of the first day of the offering period (i.e.,
15% of the fair market value of the Shares on the first day of the offering period in
which the Shares were purchased). This amount is included in your taxable
income for the year of sale and is subject to federal income tax at your ordinary
income tax rate (up to 35%). Any additional gain (or loss) will be treated as longterm capital gain (or loss). Long-term capital gains are taxed at a flat rate of 15%
(for 2011). The Company is not entitled to a tax deduction if you meet the holding
period requirements.
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Disqualifying Disposition: If the holding period requirements described above
are not met, you will recognize ordinary income at the time of sale in an amount
equal to the difference between the fair market value of the Shares on the date of
purchase and the purchase price. This amount is included in your taxable income
for the year of sale and subject to federal income tax at your ordinary income tax
rate (up to 35%), regardless of whether you actually realize any gain on the sale
of Shares. The difference, if any, between the sale proceeds and the fair market
value of the Shares on the date of purchase will be treated as a capital gain (or
loss), which is long-term if the stock has been held more than one year. Shortterm capital gains (i.e., gains realized on Shares held one year or less) will be
taxed at your ordinary income tax rate. Long-term capital gains are taxed at a flat
rate of 15% (for 2011). In the case of a disqualifying disposition, the Company is
entitled to a tax deduction in the amount and at the time you recognize ordinary
income.
Regardless of whether your disposition of the Shares is qualifying or disqualifying,
you will not be subject to employment tax (i.e., FICA contributions) on any income
realized under the ESPP. However, state and local taxes may apply depending on
where you live. State tax rules may be different from the U.S. federal income tax rules
and you should confirm your state tax obligations, if any, with a personal tax advisor.
If you realize a capital loss upon the sale of Shares, you may offset it against other
capital gains you realize in the same tax year. To the extent that your capital losses
for a given tax year exceed your capital gains realized in the same tax year, you may
deduct up to $3,000 ($1,500 if you are married, but file separately from your spouse)
of capital losses each year against your ordinary income for the tax year. Any capital
losses in excess of these limits may be carried forward to future tax years.
Your employer is not required to withhold any taxes due at the time of sale. However,
the Company will report information related to your purchase of Shares under the
ESPP on Form 3922 in the year following the year in which the Shares are
purchased. You will receive a copy of the Form 3922 in the beginning of the calendar
year following the calendar year in which the purchase was made – this Form will
provide you with information to assist in computing your tax liability and proper
Motorola Solutions Employee Stock Purchase Plan (ESPP)
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reporting of the ordinary income portion of the taxable amount from the sale of your
Shares.
Further, to the extent you perform a Disqualifying Disposition (as explained above),
the Company will report the ordinary income you realize upon the sale of Shares on
your Form W-2 for the year of sale. The Company will also provide you with a copy of
your Form W-2 which you will use to prepare your personal tax return for the
applicable year.
If you perform a Qualifying Disposition, the Company will not report the ordinary
income you realize upon the sale of Shares on your Form W-2 for the year of sale.
You will need to report this income on your individual income tax return. Retain the
Form 3922 provided by the Company and the statements provided to you by MSSB
for this purpose.
Ultimately, you are solely responsible for reporting the income you realize upon the
sale of Shares you acquire under the ESPP (ordinary income and capital gains or
losses) in your annual tax return and paying all applicable taxes associated with such
income.
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