8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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): July 12, 2006

ZEBRA TECHNOLOGIES CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	000-19406	36-2675536
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
333 Corporate Woods Parkway, Vernon Hills, Illinois		60061
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: 847-634-6700

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13c-4(c))

Item 1.01 Entry into a Material Definitive Agreement

On July 12, 2006, the Compensation Committee of the Board of Directors of Zebra Technologies Corporation (the “Company”) approved (i) the 2006 Management Bonus Plan (the “2006 Plan”), and (ii) the 2006 target bonus awards for named executive officers under the 2006 Plan.

Bonus awards for participants in the 2006 Plan, other than those assigned a job title of Vice President or higher, shall be determined based on a financial component and an individual performance component while bonus awards for those assigned a job title of Vice President or higher shall be based solely on the financial performance component. The financial performance component for the 2006 Plan is the Company’s or business unit’s, as applicable, actual 2006 operating profit, adjusted to remove the effect of foreign currency fluctuations, compared to the budgeted operating profit for 2006 of the Company or business unit, as applicable (the “Financial Performance Goal”). In cases where multiple Financial Performance Goals are used, such as when the target bonus award is tied to the performance of multiple business units, a relative weight is assigned to each of the Financial Performance Goals such that the total of all weights assigned to the multiple Financial Performance Goals for a participant equals 100%.

An officer of the Company that is a participant will be eligible to receive 50% of his target bonus award under the 2006 Plan upon the achievement of a minimum performance level of the Financial Performance Goal, 100% of his target bonus award upon the achievement of 100% of the Financial Performance Goal, and 150% of his target bonus award upon achievement of the maximum performance level of the Financial Performance Goal. The minimum performance level required to receive a bonus award under the Financial Performance Goal shall be 8.1% less than the applicable Financial Performance Goal. The maximum performance level rewarded under the Financial Performance Goal shall be 8.1% greater than the applicable Financial Performance Goal. Bonuses under the 2006 Plan will be interpolated on a straight line basis for achievement of performance levels between the minimum and maximum performance levels. The maximum award payable under the 2006 Plan is 150% of base earnings.

The Compensation Committee of the Board of Directors of the Company also approved the following target bonus percentages (expressed as a percentage of base earnings to be paid in 2006) for the named executive officers: for Edward L. Kaplan, whose base salary commencing April 3, 2006 is $700,000, an 80% target, with a Financial Performance Goal for the Company; for Charles R. Whitchurch, whose base salary commencing April 3, 2006 is $275,800, a 50% target, with a Financial Performance Goal for the Company; for Philip Gerskovich, whose base salary commencing April 3, 2006 is $348,400, a 50% target, with a Financial Performance Goal for the Company; for Hugh K. Gagnier, whose base salary commencing April 3, 2006 is $312,400, a 45% target; and for Michael H. Terzich, whose base salary commencing April 3, 2006 is $248,700, a 45% target. Messrs. Gagnier and Terzich’s target bonus percentages are based on multiple Financial Performance Goals, with 10%, 30% and 60% of their respective target bonus percentages being tied to the operating profit of the Company’s specialty printing operations in Asia Pacific, EMEA and the Americas regions, respectively.

The summary of the 2006 Plan contained herein is qualified in its entirety by reference to the 2006 Plan, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description of Exhibits
10.1	2006 Management Bonus Plan

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.

	ZEBRA TECHNOLOGIES CORPORATION
Date: July 18, 2006	By:	/s/ Edward L. Kaplan
		Chairman of the Board and Chief Executive Officer

Exhibit Index

Exhibit Number	Description of Exhibits
10.1	2006 Management Bonus Plan

EX-10.1

Exhibit 10.1

ZEBRA TECHNOLOGIES CORPORATION

AND ITS SUBSIDIARIES

2006 MANAGEMENT BONUS PLAN

SECTION 1 - - PURPOSE

1.1        Purpose: Zebra Technologies Corporation and its subsidiaries (“Zebra”) sponsors a Management Bonus Plan (the “Plan”) to focus the attention of participants on growing the business based on a specific set of goals and to reward performance in attaining these goals. While Associates play many different roles within the Company, the Company will be successful only if all Associates are focused on achieving common goals, strive individually for functional excellence in their assigned roles, and contribute to organizational excellence as a team.

SECTION 2 - DEFINITIONS

2.1        Definitions: Wherever used herein, the following terms shall have the respective meanings set forth below, unless otherwise expressly provided. When the defined meaning is intended, the term is capitalized.

(a) “Associate” shall mean an employee of Zebra Technologies Corporation or one of its subsidiaries.

(b) “Base Earnings” shall mean the actual gross base pay received, while an eligible Participant, during the Plan Year. Base Earnings shall exclude payments of all other bonuses, commissions, imputed income, and any other non-base pay forms of compensation.

(c) “Bonus Award” shall mean the award earned by a Participant based on a comparison of actual year-end results against the Financial Performance Goals and Individual Performance Goals established at the beginning of the Plan Year.

(d) “Cause” shall mean a Participant’s failure to follow directives and policies of the Company, the failure to follow the reasonable directives of a superior, willful malfeasance, gross negligence, acts of dishonesty, or conduct injurious to the Company.

(e) “Committee” shall mean the Compensation Committee of the Board of Directors of Zebra Technologies Corporation.

(f) “Company” shall mean Zebra Technologies Corporation and its subsidiaries.

(g) “Financial Performance Goal” shall mean the budgeted level of operating profit, adjusted to remove the effect of foreign currency fluctuations, for the Company or applicable business unit, for the Plan Year.

(h) “Individual Performance Goals” shall mean clear, specific, and measurable goals that are established at the beginning of the Plan Year, are aligned with the overall goals of the Company or applicable business unit, and are approved by the applicable business unit or functional Vice President.

(i) “Participant” shall mean an Associate of the Company who is in a position meeting the defined eligibility criteria for participation in the Plan, as stated in Sections 3.1 and 3.2., for a specified Plan Year.

(j) “Performance Payout Percentage” shall mean the amount of Target Bonus Percentage awarded based on the level of goal achievement.

(k) “Plan” shall mean the Zebra Technologies Corporation and Its Subsidiaries 2006 Management Bonus Plan in the form established and defined herein.

(l) “Plan Year” shall mean the fiscal year of Zebra Technologies Corporation, which extends from January 1, 2006 through December 31, 2006.

(m) “Section 16 Officers” shall mean any officers of the Company as defined in Rule 16a-1 under the Securities Exchange Act of 1934, as amended.

(n) “Target Bonus Percentage” shall mean the percent of Base Earnings which would be paid to a Participant if the respective target levels of the Financial Performance Goals and Individual Performance Goals applicable to such Participant in a particular Plan Year were achieved.

SECTION 3 - ELIGIBILITY AND PARTICIPATION

3.1        Eligibility: Eligibility for participation in the Plan will be limited to those Associates who, by the nature and scope of their position, regularly and directly make or influence policy or operating decisions which impact the growth, profitability, and earnings results of the Company. For purposes of this Plan, such Associates are limited to Vice Presidents, Directors, and Managers, by job title, provided they are assigned a salary grade of E-12 or above. Department supervisors also may be considered eligible for participation provided they are in an exempt salaried position and regularly supervise no less than four direct reports. Any Associate participating in a sales incentive or commission arrangement shall be excluded from participation in this Plan.

3.2        Participation: Participation in the Plan shall be determined annually by the Vice President, Human Resources; provided, however, that participation by Section 16 Officers of the Company shall be determined by the Committee. Associates approved for participation shall be notified of their selection.

3.3        Partial Plan Year Participation: The Vice President, Human Resources may allow an Associate who becomes eligible during the Plan Year, either as a new hire or as a result of an internal promotion, to participate in the Plan provided, however, that participation by Section 16 Officers of the Company shall be determined by the Committee. In such case, only Base Earnings received, while an eligible Participant, in the Plan Year shall be used in calculating the Bonus Award. Newly hired Associates must have a hire date prior to November 1, 2006.

3.4        Changes In Participation Level and/or Organizational Unit: A Participant who changes positions and/or is assigned to a different organizational unit (as defined by their reporting relationship), during the Plan Year, shall have their Bonus Award calculated on a prorated basis using the time eligible in each situation to account for changes in the calculation components.

3.5        No Right to Participate: Participation by an Associate in a prior Plan Year does not provide a right or entitlement to be selected for participation in a current or future Plan Year.

SECTION 4 – BONUS AWARD DETERMINATION

4.1        Financial Performance Goals: The Financial Performance Goals for the Company and for designated business units shall be based on the applicable budgeted level of operating profit, adjusted to remove the effect of foreign currency fluctuation, for the Plan Year. The Financial Performance Goals shall represent the target level of performance required to earn one hundred percent (100%) of the Target Bonus Percentage. The minimum performance level required to receive a bonus award under the financial performance component of this Plan shall be 8.1% less than the applicable Financial Performance Goal. The maximum performance level rewarded under terms of this Plan shall be 8.1% greater than the applicable Financial Performance Goal.

4.2        Individual Performance Goals: All Participants, except those assigned a job title of Vice President and above, shall be required to establish Individual Performance Goals for the Plan Year. Individual Performance Goals shall be clear, specific, measurable, aligned with overall Company goals and approved by their functional Vice President.

4.3        Bonus Components: All Participants, except those assigned a job title of Vice President and above, shall have their individual Bonus Award calculated on the basis of two independent bonus components: a financial performance component and an individual performance component. These two bonus components will be calculated separately and added together to determine the Participant’s Bonus Award. Participants assigned a job title of Vice President or higher shall have their individual Bonus Award calculated on the basis of the financial performance component only, with no individual performance component. The assignment and weighting of bonus components shall be communicated to Participants at the same time as their eligibility notification.

4.4        Performance Payout Percentage: The performance level, for each bonus component, shall be determined by dividing actual results by the applicable Financial Performance Goal or Individual Performance Goal. The Performance Payout Percentage for various achievement levels shall be determined in accordance with the following scale:

Maximum performance level = Maximum Performance Payout Percentage (150%)

Target performance level = Target Performance Payout Percentage (100%)

Minimum performance level = Minimum Performance Payout Percentage (50%)

Performance Payout Percentages for achievement between these levels shall be calculated on a linear basis. In no case shall the maximum Performance Payout Percentage be exceeded for achievement in excess of the maximum performance level, nor shall payment be made for achievement that falls below the minimum performance level, as defined in Section 4.1 hereof.

4.5        Bonus Award Calculation: At the end of each Plan Year, the Company shall evaluate actual results against Financial Performance Goals and, where applicable, against Individual Performance Goals, and compute Bonus Awards for each Participant. These computations shall be made using the following formula:

BONUS AWARD = (A x B x C x D) + (A x B x E x F)

Where:
	A = Base Earnings
	B = Target Bonus Percentage
	C = Financial Performance Goal Performance Payout Percentage
	D = Financial Performance Goal weighting percentage
	E = Individual Performance Goal Performance Payout Percentage (where applicable)
	F = Individual Performance Goal weighting percentage (where applicable)

4.6        Illustrative Example: The following example is provided for illustrative purposes only. If a Participant’s 2006 Base Earnings were equal to $80,000, and the Participant’s Target Bonus Percentage was equal to 10%, and the applicable Financial Performance Goal Performance Payout Percentage were equal to 95% with a 60% weighing percentage, and the Participant’s Individual Performance Goal Performance Payout Percentage were equal to 110% with a 40% weighing percentage; then the amount of Bonus Award earned would be equal to:

($80,000 X .10 X .95 X .60) + ($80,000 X .10 X 1.10 X .40) = $8,080

4.7        Multiple Financial Performance Goals: In cases where multiple Financial Performance Goals are used, each Financial Performance Goal achievement percentage will be calculated separately and adjusted by applying the assigned weighting to each Financial Performance Goal used. The results of these independent calculations will then be added together to determine a single consolidated Financial Performance Goal achievement percentage.

4.8        Minimum Performance Standard: Participants whose personal performance is rated as “Unacceptable” as part of the Zebra Technologies Corporation Annual Performance Management Review process shall not be eligible to receive an award under this Plan, including any bonus resulting from the achievement of Financial Performance Goals and / or Individual Performance Goals.

SECTION 5 – PAYMENT OF BONUS AWARDS

5.1        Form and Timing of Payment: Payment of Bonus Awards shall be made in cash, subject to applicable payroll tax and benefit plan withholdings, as soon as administratively feasible after the end of the Plan Year following the final determination of the fiscal year’s financial results.

SECTION 6 – TERMINATION OF EMPLOYMENT

6.1        Termination of Employment Due to Voluntary Resignation: In the event a Participant’s employment is terminated due to voluntary resignation prior to the end of the Plan Year, the Participant shall not be entitled to an award for the Plan Year in which the termination occurs.

6.2        Termination of Employment for Cause: In the event a Participant’s employment is terminated for Cause prior to the end of the Plan Year, the Participant shall not be entitled to an award for the Plan Year in which the termination occurs.

6.3        Termination of Employment Due to Death: In the event a Participant’s employment is terminated by reason of death, the Bonus Award shall be calculated on a prorated basis.

6.4        Termination of Employment for Reasons Other Than Voluntary Resignation, Cause, or Death: In the event a Participant’s employment is terminated for reasons other than voluntary resignation, Cause or death prior to the end of the Plan Year, a prorated Bonus Award may be paid in the sole discretion of the Vice President, Human Resources.

SECTION 7 – RIGHTS OF PARTICIPANTS

7.1        Employment: Nothing in this Plan shall interfere with or limit in any way the right of the Company to terminate or change a Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company. Nothing herein contained shall limit or affect in any manner or degree the normal and usual powers of management, exercised by the officers and the Board of Directors of the Company to change the duties or the character of employment of any Associate or to remove the individual from the employment of the Company at any time, all of which rights and powers are expressly reserved by the Company.

SECTION 8 – ADMINISTRATION

8.1        Administration: This Plan shall be administered by the Vice President, Human Resources in accordance with the provisions contained herein; subject to the direction and approval of the Committee with respect to matters relating to any Section 16 Officers of the Company.

8.2        Questions of Construction and Interpretation: The determination of the Vice President, Human Resources in construing or interpreting this Plan or making any decision with respect to the Plan shall be final, binding, and conclusive upon all persons. The Vice President, Human Resources’ interpretative responsibility shall include any and all definitions in the Plan, including, but not limited to, interpretations of Cause.

8.3        Amendments: The Company, in its absolute discretion, without notice, at any time and from time to time, may modify or amend, in whole or in part, any or all of the provisions of this Plan, or suspend or terminate it entirely; provided, however, that no such modification, amendment, suspension, or termination, may without the consent of the Participant (or the Participant’s beneficiary in the case of death) reduce after the end of the Plan Year the right of a Participant (or the Participant’s beneficiary as the case may be) to a payment or distribution in accordance with the provisions contained in this Plan.

8.4        Governing Law: This Plan shall be construed in accordance with, and governed by, the laws of the State of Illinois without giving effect to conflicts of laws principles.

8.5        Committee Authority: Notwithstanding anything herein to the contrary, any and all determinations or actions to be taken with respect to the Plan that relate to a Section 16 Officer of the Company shall be determined or taken by the Committee.