We were going to write about something else this morning, but the big news that Google (GOOG) agreed to buy Motorola Mobility (MMI) in a $12.5 billion deal prompted us to change our plans. The WSJ live-blogged the conference call and there’s plenty of other breathless coverage pointing out that this is Google’s biggest deal ever.

But we thought it was more interesting to dive into Motorola Mobility’s filings. As footnoted regulars know, we like to plunge head-first into the filings, especially following a big deal. And it didn’t take us long to find this severance plan that was attached to the 10-Q that Motorola filed just over two weeks ago. Of course, it’s really only with the benefit of today’s news that the agreement stands out at all. As is the case with most of these, the attorneys who write this stuff seem to go out of their way to scream “ignore me” with their overly soporific prose. Here’s a snip from the very beginning. Be sure to have coffee in hand as you read this:

The Board of Directors of Motorola Mobility Holdings, Inc. considers the maintenance of a sound management to be essential to protecting and enhancing the best interests of the Company (as hereinafter defined) and its stockholders. In this connection, the Company recognizes that the possibility of a Change in Control (as hereinafter defined) may exist from time to time, and that this possibility, and the uncertainty and questions it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders. Accordingly, the Board (as hereinafter defined) has determined that appropriate steps should be taken to encourage the continued attention and dedication of members of the Company’s management to their assigned duties without the distraction which may arise from the possibility of a Change in Control.

The rest of the agreement seems pretty routine too. The only thing that sort of sticks out to us is the timing, since it was effective Feb. 15. But the actual plan was not filed until the July 29 Q. The 10-K that MMI filed back on Feb. 18 had a lot of other employment-related agreements attached to and the company also filed this 10-Q back on April 26, which was well-after the effective date of the agreement. There was a brief description of the details of the severance plan in the proxy that the company filed on March 15, which makes the timing seem all the more odd.

Diving into the proxy, the amount that Chairman and CEO Sanjay Jha stands to make is pretty eye-popping: over $90 million, although that number includes a $22 million gross-up for taxes — something that Jha and other Motorola executives apparently agreed to give up earlier this year.

Of course, finding these sort of nuances in advance is what really counts since the company’s stock is up nearly 60% on news of the deal. Indeed that was the main focus of our  Jan. 14 footnotedPro report on 2011 M&A targets and we’re pretty pleased that three of those deals have been announced, leaving seven more to go. Motorola Mobility wasn’t on that list — or even the updated list we put out in late March. But in hindsight, it was clearly an interesting signal that we often look for as we’re doing our diving.

For more information or to inquire about a subscription to footnotedPro, please contact Todd Serpico.

Image source: Aixcracker

Posted in Urge to merge Tags: 10-Q, M&A, severance

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