Motorola Solutions (MSI) DEF 14A Definitive proxy

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_]	Preliminary Proxy Statement	[_]	CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
[X]	Definitive Proxy Statement
[_]	Definitive Additional Materials
[_]	Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

MOTOROLA

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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Notes:

[MOTOROLA LOGO]	PROXY STATEMENT
	MANAGEMENT ’S DISCUSSION
	AND ANALYSIS
	1999 CONSOLIDATED
	FINANCIAL STATEMENTS
	AND NOTES

PRINCIPAL EXECUTIVE OFFICES: 1303 East Algonquin Road Schaumburg, Illinois 60196 March 23, 2000 PLACE OF MEETING: Hyatt Regency Woodfield 1800 E. Golf Road Schaumburg, Illinois 60173

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders:

         Our Annual Meeting will be held at the Hyatt Regency Woodfield, 1800 E. Golf Road, Schaumburg, Illinois 60173 on Monday, May 1, 2000 at 5:00 P.M., local time.

         The purpose of the meeting is to:

1. elect directors for the next year;

2. approve a proposal to amend Motorola’s Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of Motorola’s common stock from 1.4 billion shares to 4.2 billion shares;

3. consider and vote upon the Motorola Omnibus Incentive Plan of 2000; and

4. act upon such other matters as may properly come before the meeting.

Only Motorola stockholders of record at the close of business on March 15, 2000 will be entitled to vote at the meeting. Please vote in one of these ways:

Ÿ use the toll-free telephone number shown on your proxy card;

Ÿ visit the website shown on your proxy card to vote via the Internet; or

Ÿ mark, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope.

PLEASE NOTE THAT ATTENDANCE AT THE MEETING WILL BE LIMITED TO STOCKHOLDERS OF MOTOROLA AS OF THE RECORD DATE (OR THEIR AUTHORIZED REPRESENTATIVES) HOLDING ADMISSION TICKETS OR OTHER EVIDENCE OF OWNERSHIP. THE ADMISSION TICKET IS DETACHABLE FROM YOUR PROXY CARD. IF YOUR SHARES ARE HELD BY A BANK OR BROKER, PLEASE BRING TO THE MEETING YOUR BANK OR BROKER STATEMENT EVIDENCING YOUR BENEFICIAL OWNERSHIP OF MOTOROLA STOCK TO GAIN ADMISSION TO THE MEETING.

By order of the Board of Directors,

[Signature of A. Peter Lawson]

A. Peter Lawson

Secretary

[MOTOROLA LOGO]

1303 E. Algonquin Road

Schaumburg, IL 60196

Christopher B. Galvin
Chairman of the Board and
Chief Executive Officer

March 23, 2000

Dear Fellow Stockholders:

It has been an exciting year at Motorola. We have worked very hard on meeting the goals we outlined to stockholders last year. We have made a lot of progress in 1999. We know much remains to be done.

We are asking our stockholders to consider two important proposals for our 2000 Annual Meeting. First, we are asking you to approve an increase in the number of authorized shares of Motorola common stock. In February 2000, the Motorola Board of Directors approved a 3-for-1 stock split in the form of a stock dividend, subject to the stockholders approving an increase in the number of the Company’s authorized shares. In addition to enabling the contingent 3-for-1 stock split, additional shares may also be used by the Company to purchase other companies, such as in the recently completed merger with General Instrument, and in connection with our employee benefit plans.

We are also asking for your approval of the Motorola Omnibus Incentive Plan of 2000. The Board adopted the 2000 Plan in response to what can only be called a “war for talent” that is being waged in the information technology industry. The Company has spent the last year reviewing its compensation programs. Motorola ’s programs related to equity-based awards have fallen behind most of our key competition. The Board and senior management believe that competitive compensation programs are crucial for Motorola’s success. The 2000 Plan is integral to our compensation strategies in 2000 and going forward.

Each of these proposals is discussed in greater detail in the Proxy Statement. I appreciate your support of these proposals and your continued support of Motorola.

Very truly yours,

[SIGNATURE OF CHRISTOPHER B. GALVIN]

PROXY STATEMENT

1

PROXY STATEMENT —VOTING PROCEDURES

         Your vote is very important. The Board of Directors is soliciting proxies to be used at the May 1, 2000 Annual Meeting. This proxy statement, the form of proxy and the 1999 Summary Annual Report will be mailed to stockholders on or about March 23, 2000. The Summary Annual Report is not a part of this proxy statement. The proxy statement and Summary Annual Report also are available on the Company’s website at www.motorola.com/investor.

Who Can Vote

         Only stockholders of record at the close of business on March 15, 2000 (the “record date”) will be entitled to notice of and to vote at the Annual Meeting or any adjournments thereof. On that date, there were 717,292,815 issued and outstanding shares of the Company’s common stock, $3 par value per share (“Common Stock ”), the only class of voting securities of the Company.

How You Can Vote

         This year there are three convenient voting methods:

· Voting by Telephone. You can vote your shares by telephone by calling the toll-free telephone number on your proxy card. Telephone voting is available 24 hours a day. If you vote by telephone you should not return your proxy card.

· Voting by Internet. You can also vote via the Internet. The website for Internet voting is on your proxy card, and voting also is available 24 hours a day. If you vote via the Internet you should not return your proxy card.

· Voting by Mail. If you choose to vote by mail, mark your proxy, date and sign it, and return it in the postage-paid envelope provided.

How You May Revoke or Change Your Vote

         You can revoke your proxy at any time before it is voted at the meeting by:

· Sending written notice of revocation to the Secretary.

· Submitting another timely proxy by telephone, Internet or paper ballot.

· Attending the Annual Meeting and voting in person. If your shares are held in the name of a bank, broker or other holder of record, you must obtain a proxy, executed in your favor, from the holder of record to be able to vote at the meeting.

General Information on Voting

         You are entitled to cast one vote for each share of Common Stock you own on the record date. Stockholders do not have the right to vote cumulatively in electing directors.

         In order for business to be conducted, a quorum must be represented at the Annual Meeting. A quorum is a majority of the shares entitled to vote at the Annual Meeting. Shares represented by a proxy in which authority to vote for any matter considered is “withheld ”, a proxy marked “abstain” or a proxy as to which there is a “broker non-vote” will be considered present at the meeting for purposes of determining a quorum.

         There are differing vote requirements for the various proposals. Directors will be elected by a plurality of the votes cast at the Annual Meeting, meaning the 14 nominees receiving the most votes will be elected. Only votes cast for a nominee will be counted. Unless indicated otherwise by your proxy, the shares will be voted for the 14 management nominees. Instructions on the accompanying proxy to withhold authority to vote for one or more of the nominees will result in those nominees receiving fewer votes but will not count as a vote against the nominees.

         The amendment to the Company’s Restated Certificate of Incorporation, as amended, to increase the number of shares of authorized Common Stock to 4.2 billion shares requires an affirmative vote of a majority of the shares outstanding and entitled to vote as of the record date. Abstentions and broker non-votes on this matter will have the same impact as votes against the proposal.

         The adoption of the Motorola Omnibus Incentive Plan of 2000 requires an affirmative vote of a majority of the shares present in person or by proxy and entitled to vote at the Annual Meeting. For this proposal, an abstention will have the same effect as a vote against the proposal. Broker non-votes will not be voted for or against the proposal and will have no effect on the proposal.

         If you are the beneficial owner of shares held in “street name” by a broker, the broker as the record holder of the shares is required to vote those shares in accordance with your instructions. If you do not give instructions to the broker, the broker will be entitled to vote the shares with respect to “discretionary” items but will not be permitted to vote the shares with respect to “non-discretionary” items (those shares are treated as “broker non-votes”).

         All shares that have been properly voted —whether by telephone, Internet or mail—and not revoked will be voted at the Annual Meeting in accordance with your instructions. If you sign your proxy card but do not give voting instructions, the shares represented by that proxy will be voted as recommended by the Board of Directors.

         If any other matters are properly presented at the Annual Meeting for consideration, the persons named in the enclosed proxy card will have the discretion to vote on those matters for you. At the date we began printing this proxy statement, the Board of Directors did not know of any other matter to be raised at the annual meeting.

Voting by Participants in the Company’s Profit Sharing and Investment Plan

         If a stockholder is a participant in the Motorola Profit Sharing and Investment Plan (the “Profit Sharing Plan ”) the proxy card also will serve as a voting instruction for the trustees of that plan where all accounts are registered in the same name. If shares of Common Stock in the Profit Sharing Plan are not voted either by telephone, via the Internet, or by returning the proxy card representing such shares, those shares will be voted by the trustees in the same proportion as the shares properly voted.

PROXY STATEMENT

Voting by Participants in the General Instrument Corporation Savings Plan

         If a stockholder is a participant in the General Instrument Corporation Savings Plan (the “GI Savings Plan ”) the proxy card also will serve as voting instructions for the special fiduciary under that plan for all shares of Common Stock that have been allocated to the participant’s account under the GI Savings Plan. The special fiduciary will instruct the trustee to vote all shares for which the special fiduciary receives timely voting instructions from participants in accordance with such participants’ instructions. The special fiduciary shall direct the trustee to vote all shares for which the special fiduciary has not received timely voting instructions in the special fiduciary’s sole discretion. The trustee will vote the shares in accordance with directions received from the special fiduciary. Please note that participants in the GI Savings Plan are considered named fiduciaries with respect to the shares of Common Stock for which they are entitled to direct the special fiduciary to vote. In directing the special fiduciary how to vote, they should consider the long-term best interests of themselves and the other participants in the GI Savings Plan.

1. ELECTION OF DIRECTORS FOR A ONE-YEAR TERM

         The term of office of all present directors of the Company will expire on the day of the 2000 Annual Meeting upon the election of their successors. The number of directors of the Company to be elected at the Annual Meeting is 14. The directors elected at the Annual Meeting will serve until their respective successors are elected and qualified or until their earlier death or resignation.

NOMINEES

         Each of the nominees named below is currently a director of the Company and was elected at the Annual Meeting of stockholders held on May 3, 1999. The ages shown are as of December 31, 1999. Donald R. Jones is not standing for re-election to the Board because of the Company’s policy on age and tenure of directors.

         If any of the nominees named below is not available to serve as a director at the time of the Annual Meeting (an event which the Board does not now anticipate), the proxies will be voted for the election as director of such other person or persons as the Board may designate, unless the Board, in its discretion, reduces the number of directors.

[photo of CHRISTOPHER B. GALVIN] CHRISTOPHER B. GALVIN, Principal Occupation: Chairman of the Board and Chief Executive Officer, Motorola, Inc. Director since 1988 Age—49 Mr. Galvin began working for the Company in 1967 and he served in sales, sales management, marketing, product management, service management and general management positions in the Company’s various businesses. He served as president and chief operating officer from 1993 until he became Chief Executive Officer on January 1, 1997. In February 1999, Mr. Galvin was elected Chairman of the Board. Mr. Galvin received a bachelor’s degree from Northwestern University and a master’s degree from the Kellogg Graduate School of Management at Northwestern University. Mr. Galvin is the son of Robert W. Galvin.

[photo of RONNIE C. CHAN] RONNIE C. CHAN, Principal Occupation: Chairman, Hang Lung Development Group Director since 1997 Age—50 Mr. Chan has been the Chairman of Hong Kong-based Hang Lung Development Group since 1991. Hang Lung Development Group is involved in property development, property investment and hotels. In 1986, Mr. Chan co-founded the private Morningside/Springfield Groups. The Morningside Group directs investments in private companies. The Springfield Group engages in financial trading, fund management and investment consulting. He is a member of the Board of Directors of Enron Corporation and Standard Chartered PLC. Mr. Chan obtained his first two degrees in biology from California State University and an MBA from the University of Southern California. Mr. Chan is a U.S. citizen residing in Hong Kong.

PROXY STATEMENT

3

[photo of H. LAURANCE FULLER] H. LAURANCE FULLER, Principal Occupation: Co-Chairman of the Board, BP Amoco, p.l.c. Director since 1994 Age—61 Mr. Fuller will be retiring as Co-Chairman and a director of BP Amoco, p.l.c., an energy company, on March 31, 2000. He is a director of The Chase Manhattan Corporation, The Chase Manhattan Bank, N.A., Abbott Laboratories, Security Capital Group and Catalyst. Mr. Fuller graduated from Cornell University with a B.S. degree in chemical engineering and earned a J.D. degree from DePaul University Law School.

[photo of ROBERT W. GALVIN] ROBERT W. GALVIN, Principal Occupation: Chairman of the Executive Committee, Motorola, Inc. Director since 1945 Age—77 Mr. Galvin started his career at the Company in 1940. He held the senior officership position in the Company from 1959 until 1990, when he became Chairman of the Executive Committee. He continues to serve as a full time officer of the Company. He attended the University of Notre Dame and the University of Chicago, and is currently a member of the Board of Trustees of Illinois Institute of Technology. Mr. Galvin has been awarded a number of honorary degrees as well as industrial, professional and national awards.

[photo of Robert L. GROWNEY] ROBERT L. GROWNEY, Principal Occupation: President and Chief Operating Officer, Motorola, Inc. Director since 1997 Age—57 Mr. Growney began his career with Motorola in 1966, holding various positions in the Company ’s wireless communications businesses including president and general manager of the Messaging, Information and Media Sector from 1994 until he was elected President and Chief Operating Officer on January 1, 1997. Mr. Growney received both his bachelor’s degree in mechanical engineering and his master’s degree in business administration from Illinois Institute of Technology and is currently a member of the Board of Trustees of Illinois Institute of Technology.

[photo of ANNE P. JONES] ANNE P. JONES, Principal Occupation: Consultant Director since 1984 Age—64 Ms. Jones is currently working as a consultant. She was a partner in the Washington, D.C. office of the Sutherland, Asbill & Brennan law firm from 1983 until 1994. Before that, she was a Commissioner of the Federal Communications Commission. Ms. Jones is a director of the American Express Mutual Fund Group. She holds B.S. and L.L.B. degrees from Boston College and its Law School, respectively.

[photo of JUDY C. LEWENT] JUDY C. LEWENT, Principal Occupation: Senior Vice President and Chief Financial Officer, Merck & Co., Inc. Director since 1995 Age—50 Ms. Lewent has been Senior Vice President and Chief Financial Officer, Merck & Co., Inc., a pharmaceuticals company, since 1992. She is also a director of Johnson & Johnson Merck Consumer Pharmaceuticals Company, The Quaker Oats Company, Merial Limited, and the National Bureau of Economic Research. Ms. Lewent is also a trustee of the Rockefeller Family Trust, a trustee board member of the University of Pennsylvania Health System, and a Massachusetts Institute of Technology Corporation member. Ms. Lewent received a B.S. degree from Goucher College and a M.S. degree from the MIT Sloan School of Management.

PROXY STATEMENT

[photo of DR. WALTER E. MASSEY] DR. WALTER E. MASSEY, Principal Occupation: President of Morehouse College Director since 1993 Age—61 Dr. Massey is President of Morehouse College. He has been director of the Argonne National Laboratory and vice president for research at the University of Chicago. In 1991 he was appointed by President Bush as the Director of the National Science Foundation after which he was Provost and Senior Vice President for the University of California System. Dr. Massey received a Ph.D. degree in Physics and a Master of Arts degree from Washington University. He also holds a Bachelor of Science degree in Physics and Mathematics from Morehouse College. He is a director of BP Amoco p.l.c., BankAmerica Corporation and McDonalds, Inc. Dr. Massey previously served as a director of the Company from May 1984 until May 1991 when he accepted his appointment to the National Science Foundation.

[photo of NICHOLAS NEGROPONTE] NICHOLAS NEGROPONTE, Principal Occupation: Director of the Massachusetts Institute of Technology Media Laboratory Director since 1996 Age—56 Mr. Negroponte is a co-founder and director of the Massachusetts Institute of Technology Media Laboratory, an interdisciplinary, multi-million dollar research center focusing on the study and experimentation of future forms of human and machine communication. He founded MIT’s pioneering Architecture Machine Group, a combination lab and think tank responsible for many radically new approaches to the human-computer interface. He joined the MIT faculty in 1966 and became a full professor in 1980. Mr. Negroponte received a B.A. and M.A. in Architecture from Massachusetts Institute of Technology.

[photo of JOHN E. PEPPER, JR.] JOHN E. PEPPER, JR., Principal Occupation: Chairman of the Executive Committee of the Board of Directors, Procter & Gamble Co. Director since 1994 Age—61 Mr. Pepper is Chairman of the Executive Committee of the Board of Directors of Procter & Gamble Co., a consumer products company, and its former chairman of the board and chief executive officer. Mr. Pepper is also a director of the Xerox Corporation and Boston Scientific Corporation. Mr. Pepper graduated from Yale University in 1960.

[photo of SAMUEL C. SCOTT III] SAMUEL C. SCOTT III, Principal Occupation: President and Chief Operating Officer, Corn Products International Director since 1993 Age—55 Mr. Scott is President and Chief Operating Officer of Corn Products International, a corn refining business. Mr. Scott serves on the Board of Directors of Corn Products International, Reynolds Metals Company, the Corn Refiners Association Inroads Chicago and Russell Reynolds Associates. Mr. Scott graduated from Fairleigh Dickinson University, with a bachelor’s degree in engineering in 1966 and an MBA in 1973.

[photo of GARY L. TOOKER] GARY L. TOOKER, Principal Occupation: Retired; formerly Chairman of the Board, Motorola, Inc. Director since 1986 Age—60 Mr. Tooker started with the Company in 1962, holding ascending marketing and operations assignments within the semiconductor business and the Company, including chief executive officer from 1993 through 1996 and chairman of the board from January 1997 through May 1999. He retired as an officer of the Company on December 31, 1999. He is a member of the Board of Directors of Eaton Corporation, Atlantic Richfield Company (ARCO) and Catalyst and the Morehouse College Board of Trustees. He is a graduate of Arizona State University where he received a bachelor’s degree in Electrical Engineering and did post-graduate studies in Business Administration.

PROXY STATEMENT

5

[photo of B. KENNETH WEST] B. KENNETH WEST, Principal Occupation: Senior Consultant for Corporate Governance to Teachers Insurance and Annuity Association-College Retirement Equities Fund Director since 1976 Age—66 Mr. West is serving as Senior Consultant for Corporate Governance to TIAA-CREF, a major pension fund company. He retired as chairman of Harris Bankcorp, Inc. in 1995 where he had been employed since 1957. He is also a director of The Pepper Companies, Inc. Mr. West graduated from the University of Illinois and received an MBA degree from the University of Chicago.

[photo of DR. JOHN A. WHITE] DR. JOHN A. WHITE, Principal Occupation: Chancellor, University of Arkansas Director since 1995 Age—60 Dr. White is currently Chancellor of the University of Arkansas. Dr. White served as Dean of Engineering at Georgia Institute of Technology from 1991 to early 1997, having been a member of the faculty since 1975. He is a director of Eastman Chemical Company, J.B. Hunt Transport Services, Inc., Logility, Inc., and Russell Corporation. Dr. White received a B.S.I.E. from the University of Arkansas, a M.S.I.E. from Virginia Polytechnic Institute and State University and a Ph.D. from The Ohio State University.

PROXY STATEMENT

MEETINGS OF THE BOARD OF DIRECTORS OF THE COMPANY

         During 1999 the Board had nine meetings. All incumbent directors attended 75% or more of the combined total meetings of the Board and the committees on which they served during 1999 except Mr. Chan.

COMMITTEES OF THE BOARD OF DIRECTORS

Audit and Legal Committee

Members: Directors A. Jones (Chair), Chan, Fuller, D. Jones and White

Number of Meetings in 1999: Four

Functions:

· Oversees internal controls, audits and compliance programs

· Recommends independent auditors and oversees the scope of their activities

· Oversees health, safety and environmental audit functions and business ethics

· Oversees internal legal practice and policy

Compensation Committee

Members: Directors Scott (Chair), Fuller and Pepper

Number of Meetings in 1999: Seven

Functions:

· Establishes elected officers compensation

· Administers or monitors compensation and benefit plans

Executive Committee

Members: Directors R. Galvin (Chair), C. Galvin, Growney, Scott, Tooker and West

Number of Meetings in 1999: None

Functions:

· Reviews strategic planning process, allocation of resources and other specific matters assigned by the Board

Finance Committee

Members: Directors D. Jones (Chair), Chan, Growney, Lewent and West

Number of Meetings in 1999: Seven

Functions:

· Reviews current and long-range financial strategy and planning, including dividends and borrowings

Management Development Committee

Members: Directors West (Chair), C. Galvin, Scott and Tooker

Number of Meetings in 1999: Three

Functions:

· Reviews the process and results of the Company’s organization and management development program

Nominating Committee

Members: Directors Pepper (Chair), A. Jones, Massey and Negroponte

Number of Meetings in 1999: Four

Functions:

· Recommends candidates for membership on the Board based on committee-established guidelines

· Consults with the Chairman of the Board on committee assignments

· Considers candidates for the Board recommended by stockholders

· Considers matters of corporate governance

This Committee will consider a candidate for director proposed by a stockholder. A candidate must be highly qualified and be both willing and expressly interested in serving on the Board. A stockholder wishing to propose a candidate for the Committee’s consideration should forward the candidate’s name and information about the candidate’s qualifications to the Company ’s Secretary as described on page 23.

Technology Committee

Members: Directors Massey (Chair), Growney, Lewent, Negroponte and White

Number of Meetings in 1999: Three

Functions:

· Identifies and assesses significant technological issues and needs affecting the Company

DIRECTOR COMPENSATION

         In 1999, non-employee directors were paid an annual retainer of $40,000. This fee has not increased over the last four years. Employee directors receive no additional compensation for serving on the Board or its Committees.

         In addition to the annual retainer, non-employee directors are paid for each meeting attended as follows: (i) $1,500 per day for directors’ meetings; (ii) $1,000 per day for committee meetings (unless on the same day as another meeting, then $500); and (iii) $1,500 per day and a pro-rata portion thereof for partial days, for assigned work for the benefit of the Company or any subsidiary. Each non-employee director who is a chair of a committee receives an additional $4,000 per annum. The Company also reimburses its directors, and in certain instances spouses who accompany directors, for travel, lodging and related expenses they incur in attending Board and committee meetings.

         Directors are required to accept half of all their board compensation in Common Stock or restricted Common Stock, and may elect to accept up to 100% of their compensation in Common Stock or restricted Common Stock. Restricted Common Stock is Common Stock that may not be transferred until (i) the holder does not stand for re-election or is not re-elected or (ii) the holder’s disability or death.

         In 1999, each non-employee director received an option to acquire 2,500 shares of Common Stock at the fair market value of the shares on the date of grant.

         Non-employee directors may elect to defer receipt of all or any portion of their compensation until the year after they cease being a director, become disabled or reach a designated age. Such deferred amounts are credited with interest at a rate based on the discount rate for ninety-day Treasury bills. Payments generally may be made in a lump sum or in annual installments over a period not exceeding ten years. The entire undistributed deferred amount (plus interest) will be distributed in a lump sum upon a participating director’s death.

         In 1996, the Board terminated its retirement plan. Non-employee directors elected after the termination are not entitled to benefits under this plan, and non-employee directors already participating in the plan accrued no additional benefits for services after May 31, 1996. In 1998, some directors converted their accrued benefits in the retirement plan into shares of restricted Motorola Common Stock. They may not sell or transfer these shares until they are no longer members of the Board because (i) they did not stand for re-election or were not re-elected or (ii) their disability or death. Directors who did not convert their accrued benefits in the retirement plan are entitled to receive payment of such benefits in accordance with the applicable payment terms of the plan, including payments to spouses in the event of death. For each year of service on the Board prior to the date the plan was terminated, these directors are entitled to receive annual payments equal to 10% of the annual retainer for directors in effect on the date the plan was terminated, with a maximum annual payment equal to 80% of the retainer. Directors who had served on the Board for 8 or more years prior to the termination of the plan are fully vested and entitled to an annual payment of $32,000.

         Non-employee directors are covered by insurance that provides accidental death and dismemberment coverage of $500,000 per person. The spouse of each such director is also covered by such insurance when traveling with the director on business trips for the Company. The Company pays the premiums for such insurance. The total premiums for coverage of all such directors and their spouses during the year ended December 31, 1999 was $3,500.

         Robert W. Galvin, a director and executive officer, owns an airplane, which he used on business travel for the Company for approximately 77% of its miles flown in 1999. The Company employs pilots and mechanics for Company-owned airplanes. They also devote a portion of their time to Mr. Galvin’s airplane, including those times when it is not being used on Company business. The Company pays the salaries and the cost of fringe benefits of these employees. Mr. Galvin pays all of the other expenses of his airplane, except that the cost of fuel, oil and relatively minor incidental crew and flight expenses incurred solely in connection with Company business flights are paid by the Company. Mr. Galvin does not charge the Company when other Company personnel accompany him on his airplane on business trips. In 1999, and historically, the percentage of Company-paid expenses of the airplane has been less than the percentage of usage of the airplane for Company business.

         Gary Tooker retired as an officer of the Company on December 31, 1999. In connection with his retirement, the Company entered into a consultant agreement with Mr. Tooker, which began on January 1, 2000. Under this consultant agreement, Mr. Tooker has agreed to make available to Motorola consulting services that are specifically requested by Motorola’s CEO. Those services are expected to include:

· Representing Motorola at meetings with U. S. and foreign governments and with councils and committees associated with U.S. and foreign governments

· Representing Motorola at various international meetings and trade shows

· Representing Motorola at meetings of charitable and educational organizations and institutions

· Continued involvement with Motorola University activities, both in teaching and in fostering external relationships

· Other topics as may from time-to-time be decided upon by consultant and the CEO.

         Mr. Tooker did not receive any payments in 1999 under this consultant agreement. The Company expects to pay Mr. Tooker approximately $2,727,000 in 2000 and approximately $270,000 in 2001 under the agreement. In addition, during the term of the consultant agreement, Mr. Tooker will receive secretarial and computer support and be entitled to use the Company-owned aircraft in connection with his consulting services. He will also be entitled to home security services and tax preparation services comparable to those offered to elected officers of the Company. The Company also will pay for annual physical examinations and medical insurance premiums. Mr. Tooker will also receive regular director compensation paid to non-employee directors.

RECOMMENDATION OF THE BOARD OF DIRECTORS

         THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED HEREIN AS DIRECTORS. UNLESS INDICATED OTHERWISE BY YOUR PROXY VOTE, THE SHARES WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF SUCH NOMINEES.

2. APPROVAL OF INCREASE IN AUTHORIZED COMMON STOCK

         The Board of Directors of the Company has proposed the adoption by the stockholders of an amendment to the Company ’s Restated Certificate of Incorporation, as amended, to increase the number of shares of authorized Common Stock of the Company to 4.2 billion shares from the presently authorized number of 1.4 billion shares. The Board of Directors has declared that the proposed amendment be submitted to a vote by the stockholders at the Annual Meeting.

         On February 29, 2000, the Board of Directors declared a contingent 3-for-1 stock split in the form of a stock dividend. If, and only if, the proposed amendment to the Company’s Restated Certificate of Incorporation, as amended, is adopted by the stockholders at the Annual Meeting and the number of shares of authorized Common Stock is increased to 4.2 billion, the stock dividend will be distributed on June 1, 2000 to holders of Common Stock of record on May 15, 2000. The Company reserves the right to rescind the stock dividend.

         If the proposed amendment is adopted by the stockholders, the Company plans to file a Certificate of Amendment to the Restated Certificate of Incorporation, as amended, as soon as practicable following the Annual Meeting and the number of shares of authorized Common Stock will thereby be increased to 4.2 billion.

         On March 15, 2000, of the 1.4 billion authorized shares of Common Stock, a total of 717.3 million shares were outstanding, approximately 32 thousand shares were held in treasury and approximately 69.2 million shares were reserved for issuance in connection with the Company’s obligations to issue stock in connection with outstanding options, warrants, convertible debt securities and other exchangeable securities. The remainder of the shares of authorized common stock were not issued or subject to reservation.

PROXY STATEMENT

         In addition to enabling the contingent 3-for-1 stock split in the form of a stock dividend that is described above, the additional shares will enhance the Company’s flexibility in connection with possible future actions, such as stock splits, stock dividends, future acquisitions of property and securities of other companies, financings and other corporate purposes. The Board of Directors will determine whether, when and on what terms the issuance of shares of Common Stock may be warranted in connection with any of the foregoing purposes. The Board of Directors believes that it is beneficial to the Company to have the additional shares available for such purposes without delay or the necessity of a special shareholders’ meeting. Other than the contingent 3-for-1 stock split in the form of a stock dividend that is described above, the Company has no immediate plans, arrangements, commitments or understandings with respect to the issuance of any of the additional shares of common stock which would be authorized by the proposed amendment.

         If the proposed amendment is adopted by the stockholders, the additional shares will be available for issuance from time to time without further action by the stockholders (unless required by applicable law, regulatory agencies or by the rules of any stock exchange on which the Company’s securities may then be listed) and without first offering such shares to the stockholders. Stockholders do not have preemptive rights with respect to the Common Stock. The issuance of Common Stock, or securities convertible into Common Stock, on other than a pro-rata basis would result in the dilution of a present stockholder’s interest in the Company.

         The Company has not proposed the increase in the authorized number of shares with the intention of using the additional shares for anti-takeover purposes, although the Company could theoretically use the additional shares to make it more difficult or to discourage an attempt to acquire control of the Company. As of this date, the Company is unaware of any pending or threatened efforts to acquire control of the Company.

         The affirmative vote of a majority of the shares outstanding and entitled to vote as of the record date is required for the adoption of the proposed amendment to the Company’s Restated Certificate of Incorporation, as amended.

RECOMMENDATION OF THE BOARD OF DIRECTORS

         THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK. UNLESS OTHERWISE INDICATED BY YOUR PROXY, THE SHARES WILL BE VOTED FOR APPROVAL OF THE PROPOSED AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK.

3. ADOPTION OF THE MOTOROLA OMNIBUS INCENTIVE PLAN OF 2000

         The Board has adopted the Motorola Omnibus Incentive Plan of 2000 (the “2000 Plan”) and is recommending that stockholders approve the 2000 Plan at the Annual Meeting. The 2000 Plan is integral to the Company’s compensation strategies and programs. There is an ongoing “war for talent” within the information technology industry where the Company competes. In order to retain and secure employees in this intensely competitive employment environment, the Company must have competitive compensation programs, particularly with respect to equity-based awards. The use of stock options and other stock awards among information technology companies is widely prevalent and continues to increase. The Company has found that its use of stock options falls behind the usage by others in the industry. The 2000 Plan will give Motorola more flexibility to keep pace with competitors.

         With stockholder approval of the 2000 Plan, the Company expects to continue its efforts to expand the use of stock options as the Company’s most widely-used form of long-term incentive. The 2000 Plan will also permit annual management incentive awards, stock grants, restricted stock grants, performance stock grants, performance unit grants, stock appreciation rights grants (“SARs”), and cash awards. Stockholder approval of the 2000 Plan also will permit the performance-based awards discussed below to qualify for deductibility under Section 162(m) of the Internal Revenue Code.

         Awards and grants under the 2000 Plan are referred to as “Benefits.” Those eligible for Benefits under the 2000 Plan are referred to as “Participants.” Participants include all employees of the Company and its subsidiaries and all non-employee directors.

         The Company’s existing incentive plan, the Motorola Incentive Plan of 1998 (the “1998 Plan”), by its terms, expires on May 4, 2002, and no benefits will be granted under the 1998 Plan after that date. As of December 31, 1999, approximately 25.8 million shares were available for new grants under the 1998 Plan and there were approximately 31.3 million shares subject to outstanding options under the 1998 Plan and it predecessors. As of March 15, 2000, approximately 6.6 million shares were available for new grants under the 1998 Plan. This number reflects grants made under the 1998 Plan after December 31, 1999, including grants of stock options to approximately 30,000 employees on January 31, 2000 based on 1999 performance. While the 1998 Plan will remain in place, it does not provide sufficient shares for the grants which will occur prior to the 2001 stockholder meeting. Rather than request that stockholders approve additional shares for the 1998 Plan, the Board of Directors approved for submission to the stockholders the new 2000 Plan. The Board recommends a vote for adoption of the 2000 Plan, so the Company can effectively recruit, motivate, and retain the caliber of employees essential for achievement of the Company’s success.

PROXY STATEMENT

9

         A summary of the principal features of the 2000 Plan is provided below, but is qualified in its entirety by reference to the full text of the 2000 Plan which was filed electronically with this proxy statement with the Securities and Exchange Commission. Such text is not included in the printed version of this proxy statement.

Shares Available for Issuance

         The aggregate number of shares of Common Stock that may be issued under the 2000 Plan will not exceed 35.7 million (subject to the adjustment provisions discussed below). The 35.7 million new shares represent slightly less than 5 percent of the currently outstanding shares.

         The number of shares which may be issued under the 2000 Plan for Benefits other than stock options will not exceed a total of 3 million shares (subject to the adjustment provisions discussed below).

Administration and Eligibility

         The 2000 Plan will be administered by a Committee of the Board (the “Committee”) consisting of two or more directors, each of whom will qualify as a “non-employee director” within the meaning set forth in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Committee will approve the aggregate Benefits and the individual Benefits for the most senior elected officers and non-employee directors.

         No Participant may receive in any Plan Year: (i) stock options relating to more than 1,000,000 shares; (ii) restricted stock that is subject to the attainment of Performance Criteria (as described below) relating to more than 100,000 shares; (iii) SARs relating to more than 1,000,000 shares; or (iv) performance shares relating to more than 100,000 shares (all of these limits subject to the adjustment provisions discussed below). The maximum amount that may be earned under Performance Unit awards by any Participant who is a “covered employee ” in any calendar year may not exceed $5,000,000.

Stock Options

Grants of Options

         The Committee is authorized to grant stock options to Participants (“Optionees”), which may be either incentive stock options (“ISOs”) or nonqualified stock options ( “NSOs”). NSOs and ISOs are collectively referred to as “Stock Options.” The exercise price of any Stock Option must be equal to or greater than the fair market value of the shares on the date of the grant. The term of an ISO cannot exceed 10 years, and it is anticipated that NSOs will have a term of 10 years, although the Committee retains the discretion to establish different terms for NSOs, as long as the term does not exceed 10 years. ISOs may not be granted more than 10 years after the date of adoption of the 2000 Plan by the Board.

         For purposes of the 2000 Plan, fair market value shall be determined in such manner as the Committee may deem equitable, or as required by applicable law or regulation. Generally, however, fair market value means the average of the high and low sale price as reported on the New York Stock Exchange—Composite Transactions.

Exercisability and Termination

         At the time of grant, the Committee in its sole discretion will determine when Options are exercisable and when they expire.

Payment of Option Price

         Payment for shares purchased upon exercise of a Stock Option must be made in full at the time of purchase. Payment may be made in cash, by the transfer to the Company of shares owned by the Participant for at least six months valued at fair market value on the date of transfer (including a certification of ownership of shares owned by the Participant, delivery of a properly executed exercise notice to a broker to deliver to the Company proceeds to pay the option exercise price and any withholding taxes due to the Company) or in such other manner as may be authorized by the Committee.

Restricted Stock Grants

         Restricted Stock consists of shares which are transferred or sold by the Company to a Participant, but are subject to substantial risk of forfeiture and to restrictions on their sale or other transfer by the Participant (“Restricted Stock”). The Committee determines the eligible Participants to whom, and the time or times at which, grants of Restricted Stock will be made, the number of shares to be granted, the price to be paid, if any, the time or times within which the shares covered by such grants will be subject to forfeiture, the time or times at which the restrictions will terminate, and all other terms and conditions of the grants. Restrictions could include, but are not limited to, Performance Criteria (as described below), continuous service with the Company, the passage of time or other restrictions.

Performance Stock

         Performance Stock is the right of a Participant to whom a grant of such stock is made to receive shares or cash or a combination of shares and cash equal to the fair market value of such shares at a future date in accordance with the terms of such grant and upon the attainment of Performance Criteria specified by the Committee.

         The award of Performance Stock to a Participant will not create any rights in such Participant as a stockholder of the Company until the issuance of Common Stock with respect to an award.

Performance Units

         Performance Units are the right of a Participant to whom a grant of such Performance Units is made to receive a payment in cash upon the attainment of Performance Criteria. The Committee may substitute actual shares of Common Stock for the cash payment otherwise required to be made pursuant to a Performance Unit award.

Performance Criteria

         Awards of Restricted Stock, Performance Stock, Performance Units and other incentives under the 2000 Plan may be made subject to the attainment of performance goals relating to one or more business criteria within the meaning of Section 162(m) of the Code, including, but not limited to, cash flow; cost; ratio of debt to debt plus equity; profit before tax; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per share; operating earnings; economic value added; ratio of operating earnings to capital spending; free cash flow; net profit; net sales; price of the Company ’s Common Stock; return on net assets, equity, or stockholders’ equity; market share; or total return to stockholders (“Performance Criteria”).

         Any Performance Criteria may be used to measure the performance of the Company as a whole or any business unit of the Company, and any Performance Criteria may be adjusted to include or exclude extraordinary items.

SARs

         The Committee has the authority to grant SARs to Participants and to determine the number of shares subject to each SAR, the term of the SAR, the time or times at which the SAR may be exercised, and all other terms and conditions of the SAR. An SAR is a right, denominated in shares, to receive, upon exercise of the right, in whole or in part, without payment to the Company an amount, payable in shares, in cash or a combination thereof, that is equal to the excess of: (i) the fair market value of Common Stock on the date of exercise of the right; over (ii) the fair market value of Common Stock on the date of grant of the right multiplied by the number of shares for which the right is exercised. It is anticipated that SARs primarily will be used in place of stock options, and any appreciation in value will be paid in cash, in order to comply with the laws and regulations of foreign jurisdictions or to make the grant a more effective form of compensation in a foreign jurisdiction.

Annual Management Incentive Awards

         The Committee has the authority to grant Management Incentive Awards to designated executive officers of the Company or any subsidiary.

         Management Incentive Awards will be paid out of an incentive pool equal to 5 percent of the Company’s consolidated operating earnings for each calendar year. The Committee will allocate an incentive pool percentage to each designated Participant for each calendar year. In no event, may the incentive pool percentage for any one Participant exceed 30 percent of the total pool. For purposes of the 2000 Plan, “consolidated operating earnings” will mean the consolidated earnings before income taxes of the Company, computed in accordance with generally accepted accounting principles, but shall exclude the effects of extraordinary items. Extraordinary items mean: (i) extraordinary, unusual, and/or nonrecurring items of gain or loss; (ii) gains or losses on the disposition of a business; (iii) changes in tax or accounting regulations or laws; or (iv) the effect of a merger or acquisition. The Participant’s incentive award then will be determined by the Committee based on the Participant’s allocated portion of the incentive pool subject to adjustment in the sole discretion of the Committee.

Stock Awards

         The Committee may award shares of Common Stock to Participants without payment therefor, as additional compensation for service to the Company or a subsidiary.

Cash Awards

         A cash award consists of a monetary payment made by the Company to an employee as additional compensation for his or her services to the Company or a subsidiary. A cash award may be made in tandem with another Benefit or may be made independently of any other Benefit. Cash awards may be subject to other terms and conditions, which may vary from time to time and among employees, as the Committee determines to be appropriate.

Amendment of the 2000 Plan

         Except as may be required for compliance with Rule 16b-3 under the Exchange Act and Section 162(m) of the Code, the Board or the Committee has the right and power to amend the 2000 Plan, provided, however, that neither the Board nor the Committee may amend the 2000 Plan in a manner which would impair or adversely affect the rights of the holder of a Benefit without the holder’s consent. If the Code or any other applicable statute, rule or regulation, including, but not limited to, those of any securities exchange, requires stockholder approval with respect to the 2000 Plan or any type of amendment thereto, then to the extent so required, stockholder approval will be obtained.

Termination of the 2000 Plan

         The 2000 Plan may be terminated at any time by the Board. Termination will not in any manner impair or adversely affect any Benefit outstanding at the time of termination.

Committee’s Right to Modify Benefits

         Any Benefit granted may be converted, modified, forfeited, or canceled, in whole or in part, by the Committee if and to the extent permitted in the 2000 Plan, or applicable agreement entered into in connection with a Benefit grant or with the consent of the Participant to whom such Benefit was granted. The Committee may grant Benefits on terms and conditions different than those specified in the 2000 Plan to comply with the laws and regulations of any foreign jurisdiction, or to make the Benefits more effective under such laws and regulations.

         Neither the Board nor the Committee may cancel any outstanding Stock Option for the purpose of reissuing the option to the Participant at a lower exercise price, or reduce the option price of an outstanding option.

Change in Control

Stock Options

         Upon the occurrence of a Change in Control, each Stock Option outstanding on the date on which the Change in Control occurs will immediately become exercisable in full for the remainder of its term.

PROXY STATEMENT

11

Restricted Stock

         Upon the occurrence of a Change in Control, the restrictions on all shares of Restricted Stock outstanding on the date on which the Change in Control occurs will be automatically terminated.

Performance Stock

         Upon the occurrence of a Change in Control, any Performance Criteria with respect to any Performance Stock previously granted, but still considered outstanding (as a right to receive shares or cash at a future date) will be deemed to have been attained at target levels, and shares of Common Stock or cash will be paid to the Participant in an amount or amounts determined in accordance with the terms and conditions set forth in the applicable agreement relating to the Performance Stock.

Performance Units

         Upon the occurrence of a Change in Control, any Performance Criteria with respect to any Performance Units previously granted, but still considered outstanding (as a right to receive shares or cash at a future date) will be deemed to have been attained at target levels, and the cash (or shares of Common Stock) will be paid to the Participant in an amount or amounts determined in accordance with the terms and conditions set forth in the applicable agreement relating to the Performance Units.

SARs

         Upon the occurrence of a Change in Control, each SAR outstanding on the date on which the Change in Control occurs will immediately become exercisable in full for the remainder of its term.

Management Incentive Awards

         Upon the occurrence of a Change in Control, all Management Incentive Awards will be paid out based on the consolidated operating earnings of the immediately preceding year, or such other method of payment as may be determined by the Committee (prior to the Change in Control).

Other Stock or Cash Awards

         Upon the occurrence of a Change in Control, any terms and conditions with respect to other stock or cash awards previously granted under the 2000 Plan will be deemed to be fully satisfied and the other stock or cash awards will be paid out immediately to the Participants, in amounts determined in accordance with the terms and conditions set forth in the applicable grant, award, or agreement relating to such Benefits.

         For purposes of the 2000 Plan, the term “Change in Control” is defined as: (i) any change in the person or group that possesses, directly or indirectly, the power to direct or cause the direction of the management and the policies of the Company, whether through the ownership of voting securities, by contract or otherwise; (ii) the acquisition, directly or indirectly, of securities of the Company representing at least 20 percent of the combined voting power of the outstanding securities of the Company (other than by the Company, or any employee benefit plan of the Company); (iii) the consummation of certain mergers and consolidations involving the Company; (iv) the consummation of the sale or other disposition of all or substantially all of the Company ’s assets; (v) a liquidation or dissolution of the Company approved by its stockholders; and (vi) a change in the majority of the board in existence prior to the first public announcement relating to any cash tender offer, exchange offer, merger or other business combination, sale of assets, proxy or consent solicitation (other than by the Board of the Company), contested election or substantial stock accumulation.

Adjustments

         If there is any change in the Common Stock by reason of any stock split, stock dividend, spin-off, split-up, spin-out, recapitalization, merger, consolidation, reorganization, combination, or exchange of shares, the number and class of shares available for Benefits, and the number of shares subject to outstanding Benefits, and the price of each of the foregoing, as applicable, will be equitably adjusted by the Committee in its discretion. The Board has approved a 3-for-1 stock split in the form of a stock dividend contingent upon stockholder approval of the increase of authorized shares described in Proposal 2 in this proxy statement. If the contingent 3-for-1 stock split in the form of a stock dividend occurs, then the number of shares of Common Stock reserved for issuance under the 2000 Plan will be adjusted to reflect the stock split and will increase from 35.7 million shares to 107.1 million shares.

         Subject to the Change-in-Control provisions, without affecting the number of shares reserved or available hereunder, either the Board or the Committee may authorize the issuance or assumption of Benefits in connection with any merger, consolidation, acquisition of property or stock, or reorganization upon such terms and conditions as it deems appropriate.

         In the event of any merger, consolidation, or reorganization in which the Company is not the continuing corporation, there shall be substituted on an equitable basis as determined by the Committee, for each share of common stock subject to a Benefit, the number and kind of shares of stock, other securities, cash, or other property to which holders of Common Stock of the Company are entitled pursuant to the transaction.

Reusage

         If a Stock Option expires or is terminated, surrendered or canceled without having been fully exercised or if Restricted Stock, Performance Shares or SARs are forfeited or terminated without the issuance of all of the shares subject thereto, the shares covered by such Benefits (as long as such Benefits were issued under the 2000 Plan) will again be available for use under the 2000 Plan. Shares covered by a Benefit granted under the 2000 Plan will not be counted as used unless and until they are actually and unconditionally issued and delivered to a Participant. The number of shares which are transferred to the Company by a Participant to pay the exercise or purchase price of a Benefit will be subtracted from the number of shares issued with respect to such Benefit for the purpose of counting shares used. Shares withheld to pay withholding taxes in connection with the exercise or payment of a Benefit will not be counted as used. Shares covered by a Benefit granted under the 2000 Plan which is settled in cash will not be counted as used.

Federal Income Tax Consequences

         The Company has been advised by counsel that the federal income tax consequences as they relate to Benefits are as follows:

ISOs

         An Optionee does not generally recognize taxable income upon the grant or upon the exercise of an ISO. Upon the sale of ISO shares, the Optionee recognizes income in an amount equal to the difference, if any, between the exercise price of the ISO shares and the fair market value of those shares on the date of sale. The income is taxed at long-term capital gains rates if the Optionee has not disposed of the stock within two years after the date of the grant of the ISO and has held the shares for at least one year after the date of exercise and the Company is not entitled to a federal income tax deduction. The holding period requirements are waived when an Optionee dies.

         The exercise of an ISO may in some cases trigger liability for the alternative minimum tax.

         If an Optionee sells ISO shares before having held them for at least one year after the date of exercise and two years after the date of grant, the Optionee recognizes ordinary income to the extent of the lesser of: (i) the gain realized upon the sale; or (ii) the difference between the exercise price and the fair market value of the shares on the date of exercise. Any additional gain is treated as long-term or short-term capital gain depending upon how long the Optionee has held the ISO shares prior to disposing of them in a disqualifying disposition. In the year of disposition, the Company receives a federal income tax deduction in an amount equal to the ordinary income which the Optionee recognizes as a result of the disposition.

NSOs

         An Optionee does not recognize taxable income upon the grant of an NSO. Upon the exercise of such a Stock Option, the Optionee recognizes ordinary income to the extent the fair market value of the shares received upon exercise of the NSO on the date of exercise exceeds the exercise price. The Company receives an income tax deduction in an amount equal to the ordinary income which the Optionee recognizes upon the exercise of the Stock Option. If an Optionee sells shares received upon the exercise of an NSO, the Optionee recognizes capital gain income to the extent the sales proceeds exceed the fair market value of such shares on the date of exercise.

Restricted Stock

         A Participant who receives an award of Restricted Stock does not generally recognize taxable income at the time of the award or payment. Instead, the Participant recognizes ordinary income in the first taxable year in which his or her interest in the shares becomes either: (i) freely transferable; or (ii) no longer subject to substantial risk of forfeiture. On the date the restrictions lapse, the Participant includes in taxable income the fair market value of the shares less the cash, if any, paid for the shares.

         A Participant may elect to recognize income at the time he or she receives Restricted Stock in an amount equal to the fair market value of the Restricted Stock (less any cash paid for the shares) on the date of the award.

         The Company receives a compensation expense deduction in the taxable year in which restrictions lapse (or in the taxable year of the award if, at that time, the Participant had filed a timely election to accelerate recognition of income).

Other Benefits

         In the case of an exercise of an SAR or an award of Performance Stock, Performance Units, or Common Stock or cash, the Participant will generally recognize ordinary income in an amount equal to any cash received and the fair market value of any shares received on the date of payment or delivery. In that taxable year, the Company will receive a federal income tax deduction in an amount equal to the ordinary income which the Participant has recognized.

Million Dollar Deduction Limit

         The Company may not deduct compensation of more than $1,000,000 that is paid to an individual who, on the last day of the taxable year, is either the Company’s chief executive officer or is among one of the four other most highly-compensated officers for that taxable year. The limitation on deductions does not apply to certain types of compensation, including qualified performance-based compensation. The Company believes that Benefits in the form of Stock Options, Performance Stock, Performance Units, SARs, performance-based Restricted Stock and cash payments under Management Incentive Awards constitute qualified performance-based compensation and, as such, will be exempt from the $1,000,000 limitation on deductible compensation.

Miscellaneous

A new benefits table is not provided because no grants have been made under the 2000 Plan and all Benefits are discretionary. As of March 15, 2000, the closing price of Motorola’s Common Stock was $150.88.

Approval by Stockholders

         In order to be adopted, the 2000 Plan must be approved by the affirmative vote of a majority of the outstanding shares represented at the meeting and entitled to vote.

RECOMMENDATION OF THE BOARD OF DIRECTORS

         THE BOARD RECOMMENDS A VOTE FOR ADOPTION OF THE MOTOROLA OMNIBUS INCENTIVE PLAN OF 2000. UNLESS OTHERWISE INDICATED ON THE PROXY, THE SHARES WILL BE VOTED FOR ADOPTION OF THE MOTOROLA OMNIBUS INCENTIVE PLAN OF 2000.

PROXY STATEMENT

13

OWNERSHIP OF SECURITIES

         The following table sets forth information as of February 29, 2000 regarding the beneficial ownership of shares of Common Stock by each director and nominee for director of the Company, by the persons named in the Summary Compensation Table on page 15, and by all current directors, nominees and executive officers of the Company as a group.

Name	Shares Owned(1)	Shares Under Exercisable Options(2)		Total Shares Beneficially Owned(3)(4)
Christopher B. Galvin	3,287,573	553,334		3,841,313	(5)
Gary L. Tooker	167,799	606,920	(6)	776,280	(6)
Robert L. Growney	129,972	295,667		426,272	(7)
Merle L. Gilmore	106,533	274,667		381,919	(8)
Carl F. Koenemann	31,308	163,644		198,226	(9)
Ronnie C. Chan	5,476	—		5,476	(10)
H. Laurance Fuller	9,878	6,000		15,878	(11)
Robert W. Galvin	15,129,932	—		15,164,176	(12)
Anne P. Jones	3,085	6,000		9,843	(13)
Donald R. Jones	51,906	6,000		109,108	(14)
Judy C. Lewent	4,641	6,000		10,641	(15)
Walter E. Massey	3,957	3,500		7,457	(16)
Nicholas Negroponte	7,628	6,000		13,628
John E. Pepper, Jr.	8,200	6,000		18,550	(17)
Samuel C. Scott III	8,196	6,000		14,196	(18)
B. Kenneth West	9,132	6,000		15,132	(19)
John A. White	6,707	—		6,707	(20)
All current directors, nominees and current executive officers as a group (30 persons)	17,362,380	4,086,448		21,599,524	(21)

 (1) Includes shares over which the person currently holds or shares voting and/or investment power but excludes interests, if any, in shares held in the Company’s Profit Sharing Trust and the shares listed under “Shares Under Exercisable Options.”

 (2) Includes shares under options exercisable on February 29, 2000 and options which become exercisable within 60 days thereafter.

 (3) Unless otherwise indicated, each person has sole voting and investment power over the shares reported.

 (4) Includes interests, if any, in shares held in the Company’s Profit Sharing Trust, which is subject to some investment restrictions, and the shares listed under “Shares Under Exercisable Options. Each director, other than Mr. R. Galvin, owns less than 1% of the Common Stock. Mr. R. Galvin beneficially owns 2.1% of the Common Stock. All current directors, nominees and current executive officers as a group own 3.0%.

 (5) Mr. C. Galvin has or shares investment and voting power with respect to these shares as follows: sole voting and investment power, 889,151 shares; shared voting and investment power, 1,611,860 shares; sole voting power only, 403,669 shares; and shared voting power only, 382,893 shares. Included in Mr. C. Galvin’s shares are 1,986,593 shares, which are shown in this table to be owned by Mr. R. Galvin. Mr. C. Galvin disclaims beneficial ownership of all shares not held directly by him.

 (6) Mr. Tooker has shared voting and investment power over 167,799 of these shares. Mr. Tooker disclaims beneficial ownership of 51,285 shares held in certain trusts and of 9,108 shares under exercisable options which are indirectly held by he and family members.

 (7) Mr. Growney does not have investment power over 90,000 of these shares.

 (8) Mr. Gilmore has shared voting and investment power over 23,778 of these shares, and does not have investment power over 80,000 of these shares.

 (9) Mr. Koenemann has shared voting and investment power over 30,864 of these shares.

(10) Mr. Chan does not have investment power over 1,225 of these shares.

(11) Mr. Fuller does not have investment power over 312 of these shares.

(12) Mr. R. Galvin has or shares investment and voting power with respect to these shares as follows: sole voting and investment power, 9,762,446 shares; sole investment power only, 4,067,455 shares; and shared voting and investment power, 1,300,031 shares. Included in Mr. R. Galvin’s shares are 1,986,593 shares, which are shown in this table to be owned by Mr. C. Galvin. Mr. R. Galvin disclaims beneficial ownership of all shares not directly held by him and of 31,222 shares owned by his wife, which are included for him under “Total Shares Beneficially Owned.” Christopher B. Galvin presently serves as co-trustee with his father, Robert W. Galvin, and his mother, Mary B. Galvin, under certain trusts established for their benefit, estate planning and charity and holds an executed general power of attorney from them to manage their assets, including the voting or selling of Motorola shares, if that becomes necessary.

(13) Ms. Jones does not have investment power over 696 of these shares, and disclaims beneficial ownership of 758 shares held by her husband, which are included for her under “Total Shares Beneficially Owned.”

(14) Mr. Jones disclaims beneficial ownership of 51,202 shares held by his wife, which are included for him under “Total Shares Beneficially Owned.”

(15) Ms. Lewent does not have investment power over 88 of these shares.

(16) Mr. Massey has shared voting and investment power over 768 of these shares, and does not have investment power over 654 of these shares.

(17) Mr. Pepper does not have investment power over 1,571 of these shares, and disclaims beneficial ownership of 4,350 shares held by his family members, which are included for him under “Total Shares Beneficially Owned.”

(18) Mr. Scott does not have investment power over 1,202 of these shares.

(19) Mr. West does not have investment power over 4,632 of these shares.

(20) Mr. White does not have investment power over 180 of these shares.

(21) All directors, nominees and current executive officers as a group have shared voting and investment power over 1,873,964 of these shares, and do not have investment power over 385,560 of these shares.

Principal Shareholders

         As of December 31, 1999, no person was known by the Company to be the beneficial owner of more than 5% of the Company ’s Common Stock, except that FMR Corp. filed a Schedule 13G with the Securities and Exchange Commission containing the following information:

Name and Address	Number of shares and Nature of Beneficial Ownership	Percent of Class
FMR Corp. 82 Devonshire Street Boston, MA 02109	49,983,620 shares of Common Stock (1)	8.206%

(1) As of December 31, 1999, FMR Corp. had sole voting power over 3,912,440 shares of Common Stock and sole dispositive power over 49,983,620 shares of Common Stock.

PROXY STATEMENT

15

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

	Annual Compensation					Long Term Compensation
Name and Principal Position	Year	Salary ($) (1)	Bonus ($)(2)	Other Annual Compen- sation ($)(3)(4)		Restricted Stock Awards ($)(6)	Securities Underlying Options (#)(7)(8)	LTIP Payouts ($)(9)	All Other Compen- Sation ($)(10)(11)
Christopher B. Galvin	1999	1,275,000	1,900,000	7,973		13,153,000	300,000	0	6,419
Chairman of the Board and	1998	1,200,000	600,000	13,476		0	250,000	0	8,179
Chief Executive Officer	1997	990,000	955,000	5,615		0	80,000	505,260	7,661
Gary L. Tooker	1999	1,080,000	500,000	13,048		0	0	0	10,062
Vice Chairman of the Board	1998	1,080,000	250,000	25,884		0	100,000	0	15,999
	1997	1,080,000	760,000	14,901		0	80,000	692,928	15,732
Robert L. Growney	1999	975,000	1,200,000	7,066		11,837,700	275,000	0	8,971
President and Chief	1998	920,000	450,000	5,289		0	215,000	0	6,056
Operating Officer	1997	720,000	695,000	4,428,617	(5)	0	60,000	256,640	7,225
Merle L. Gilmore	1999	750,000	900,000	2,288		10,522,400	250,000	0	5,422
Executive Vice President	1998	646,558	400,000	4,074		0	200,000	0	5,058
	1997	565,000	495,000	2,064		0	40,000	232,580	6,252
Carl F. Koenemann	1999	570,000	500,000	2,555		0	110,000	0	6,918
Executive Vice President	1998	550,000	180,000	4,531		0	100,000	0	7,500
and Chief Financial Officer	1997	485,000	325,000	3,916		0	40,000	195,488	7,500

 (1) Including amounts deferred pursuant to salary reduction arrangements under the Profit Sharing Plan.

 (2) These amounts were earned in each of these years under the Motorola Executive Incentive Plan ( “MEIP”) for performance during that year.

 (3) These amounts are the Company’s reimbursements for the income tax liability resulting from the income imputed to that executive officer as a result of coverage by a group life insurance policy for elected officers and the use of Company aircraft.

 (4) The aggregate amount of perquisites and other personal benefits, securities or property, given to each named executive officer valued on the basis of aggregate incremental cost to the Company, was less than either $50,000 or 10% of the total of annual salary and bonus for that executive officer during each of these years.

 (5) Elected officers participate in a supplementary retirement plan and generally become vested in the plan at age 55. A discussion of the Company’s pension and retirement plans is on page 18. At the time of vesting the Company makes a contribution to the trust for that plan. The purpose of that contribution is to enable the trust to make payments of the benefits under the plan due to the participant after retirement. Federal and state tax laws require that the participant include in income the amount of any contribution in the year it was made even though the participant receives no cash in connection with such contribution or any payments from the retirement plan. Because the participant receives no cash yet incurs a significant income tax liability, the Company believes that it is appropriate to reimburse the participant so that he or she is not paying additional taxes as a result of a contribution. This is the Company’s policy with respect to elected officers all of whom participate in the plan, including those named in the Summary Compensation Table. In 1997, Mr. Growney was reimbursed for such a tax liability of $4,423,360.

 (6) This column shows the market value of restricted stock awards on the date of grant. The closing price of the Common Stock on January 31, 2000, the date on which the shares of restricted stock were granted, was $131.53. The shares of restricted stock were granted to these executives in recognition of their successful efforts to significantly improve the Company’s performance during 1999 and to provide them with strong incentive to continue to increase the value of the Company during their employment as follows: 100,000 shares to Mr. Galvin; 90,000 shares to Mr. Growney; and 80,000 shares to Mr. Gilmore. The restrictions on 50% of the restricted stock lapse upon the executive officer’s retirement. The restrictions on the remaining 50% of the shares lapse on a scheduled basis over the executive officer’s career as long as he is employed by the Company or a subsidiary. These restrictions lapse on 25% of the shares in 4 years and on 25% of the shares in 6 years after the date of grant. In certain circumstances, those restrictions could all lapse at retirement. In addition, for the shares held by these three executives, if total shareholder return from the date of grant is 125% or greater before the restrictions on the time-vesting 50% of their shares lapse, the restrictions on these shares would automatically lapse. Upon death or total and permanent disability, all restrictions lapse. Regular quarterly dividends or dividend equivalents are paid on restricted stock held by these individuals.

PROXY STATEMENT

 (7) Stock options granted in 1997 vested and became exercisable after one year. In 1998, the Committee granted stock options to key employees at the Company that vest and become exercisable over a 3-year period. Other than Mr. Tooker’s options, the options in the 1998 grant to the named executives vest and become exercisable as follows: 33.3% on 11/05/99; 33.3% on 11/05/00; and 33.4% on 11/05/01. Mr. Tooker’s options vested on 11/05/99.

 (8) The Committee granted stock options to these executives in recognition of their successful efforts to significantly improve the Company’s performance during 1999 and to provide them with strong incentive to continue to increase the value of the Company during their employment. Traditionally, grants of stock options were made in November or December of each year. The Committee delayed the 1999 grant to January 31, 2000 so that it could fully assess the full year 1999 performance of the Company. These options were granted at fair market value at the time of grant. Other than Mr. Koenemann’s options, the options vest and become exercisable over 4 years as follows: 25% on 1/31/01; 25% on 1/31/02; 25% on 1/31/03; and 25% on 1/31/04. Mr. Koenemann’s options vest and become exercisable as follows: 60% on 1/31/01 and 40% on 1/31/02.

 (9) No payments under this plan will be made for the cycle ending with 1999.

(10) These figures for 1999 include the following amounts for the premiums paid under the term life portion of the split-dollar life insurance for: Mr. C. Galvin, $2,995; Mr. Tooker, $6,638; Mr. Growney, $5,547; Mr. Gilmore, $1,998; and Mr. Koenemann, $3,494.

(11) These figures include the following contributions made by the Company to the Profit Sharing Plan for 1999 for: Mr. C. Galvin, $3,424; Mr. Tooker, $3,424; Mr. Growney, $3,424; Mr. Gilmore, $3,424; and Mr. Koenemann, $3,424.

STOCK OPTION GRANTS IN 1999

Individual Grants
Name	Number of Securities Underlying Options Granted (# of shares) (1) (2)	% of Total Options Granted to Employees in 1999		Exercise or Base Price ($/Sh)	Expiration Date (3)
						Potential Realizable Value (4) at Assumed Annual Rates of Stock Price Appreciation for Option Term
						5% ($) (4)	10% ($) (4)
Christopher B. Galvin	300,000	1.6	%	$131.53	1/31/15	42,573,427	125,371,036
Gary L. Tooker	0	0	%	$131.53	1/31/15	0	0
Robert L. Growney	275,000	1.5	%	$131.53	1/31/15	39,025,641	114,923,449
Merle L. Gilmore	250,000	1.4	%	$131.53	1/31/15	35,477,856	104,475,863
Carl F. Koenemann	110,000	0.6	%	$131.53	1/31/15	15,610,257	45,969,380

(1) These are options granted under the Motorola Incentive Plan of 1998 to acquire shares of Common Stock. Options were granted on January 31, 2000 relating to performance during 1999. Traditionally, grants of stock options were made in November or December of each year. The Committee delayed the 1999 grant to January 31, 2000 so that it could fully assess the full year 1999 performance of the Company.

(2) These options were granted at fair market value at the time of the grant, and carry with them the right to elect to have shares withheld upon exercise and/or to deliver previously-acquired shares of Common Stock to satisfy tax withholding requirements. Other than Mr. Koenemann’s options, the options vest and become exercisable over 4 years as follows: 25% on 1/31/01; 25% on 1/31/02; 25% on 1/31/03; and 25% on 1/31/04. Mr. Koenemann’s options vest and become exercisable as follows: 60% on 1/31/01 and 40% on 1/31/02. Options may be transferred to family members or certain entities in which family members have an interest. In the aggregate, the options described in this table are exercisable for approximately 0.13% of the shares of Common Stock outstanding on March 15, 2000.

(3) The option term is 15 years from the date of grant. The option term is the same for substantially all of the options granted to employees on January 31, 2000. These options could expire earlier in certain situations.

(4) These hypothetical gains are based entirely on assumed annual growth rates of 5% and 10% in the value of the Company’s stock price over the entire 15-year life of these options. This equates to an increase in stock price of 108% and 318%, respectively. These assumed rates of growth are selected by the Securities and Exchange Commission for illustration purposes only and are not intended to predict future stock prices, which will depend upon market conditions and the Company’s future performance. This calculation does not take into account any taxes or other expenses which might be owed. For example, the options granted to Mr. Galvin would produce a pre-tax gain of $125,371,036 only if the Company’s stock price appreciates by 10% per year for 15 years and rises to more than $549 per share before Mr. Galvin exercises the stock options. Based on the number of shares of Motorola Common Stock outstanding as of January 31, 2000, such an increase would produce a corresponding aggregate pre-tax gain of more than $298 billion for the Company’s stockholders. In other words, Mr. Galvin’s gain from the options would equal .042% of the potential gain to all stockholders.

PROXY STATEMENT

17

AGGREGATED OPTION EXERCISES IN 1999

AND 1999 YEAR-END OPTION VALUES

Name	Shares Acquired on Exercise (# of shares)		Value Realized ($) (1)		Number of Securities Underlying Unexercised Options at end of 1999 (#)			Value of Unexercised In-The- Money (2) Options at end of 1999 ($) (3)
					Exercisable		Unexercisable  (4)	Exercisable		Unexercisable  (4)
Christopher B. Galvin	0		0		553,334		466,666	55,239,009		20,284,271
Gary L. Tooker	63,080	(5)	4,549,363	(5)	660,920	(6)	0	66,372,819	(6)	0
Robert L. Growney	30,373		1,647,233		295,667		418,333	26,614,554		17,711,736
Merle L. Gilmore	0		0		274,667		383,333	25,976,044		16,384,636
Carl F. Koenemann	69,690		5,286,278		163,644		176,666	14,872,980		7,956,471

(1) The “value realized” represents the difference between the base (or exercise) price of the option shares and the market price of the option shares on the date the option was exercised. The value realized was determined without considering any taxes which may have been owed.

(2) “In-the-Money ” options are options whose base (or exercise) price was less than the market price of Common Stock at December 31, 1999.

(3) Assuming a stock price of $147.25 per share, which was the closing price of a share of Common Stock reported for the New York Stock Exchange-Composite Transactions on December 31, 1999.

(4) Includes options granted on January 31, 2000 relating to performance during 1999. Traditionally, grants of stock options are made in November or December of each year. The Committee delayed the grant to January 31, 2000 so that it could fully assess the full year 1999 performance of the Company.

(5) Includes 18,000 shares acquired upon exercise of options that were previously transferred by Mr. Tooker to a limited partnership indirectly held by Mr. Tooker and his family members.

(6) Includes 27,108 shares under exercisable options that were transferred by Mr. Tooker to a limited partnership indirectly held by Mr. Tooker and his family members.

LONG-TERM INCENTIVE PLANS-AWARDS IN 1999

Name	Performance or Other Period Until Maturation or Payout Maximum ($)	Estimated Future Payouts Under Non-Stock Based Plans
		(1)(2)(4)
		Target $(3)	Maximum ($)
Christopher B. Galvin	4 Years	1,593,750	3,187,500
Gary L. Tooker	4 Years	1,350,000	2,700,000
Robert L. Growney	4 Years	1,218,750	2,437,500
Merle L. Gilmore	4 Years	937,500	1,875,000
Carl F. Koenemann	4 Years	712,500	1,425,000

(1) Under the Company ’s Long Range Incentive Plan of 1994 (“LRIP”), at the beginning of each four-year cycle, the Compensation Committee determines the objective measures/metrics for that cycle. The measures/metrics used for this purpose are return on net assets (“RONA”), stockholder return and sales growth over a four-year period, each weighted at 25%, compared to a selected comparator group of companies. The fourth measurement is fundable growth weighted at 25%. An award is earned only when Company performance exceeds the minimum specified RONA floor, notwithstanding superior performance versus the comparator group of companies, and can range from 0% to 200% of the lesser of (i) 125% of the executive officer’s annualized base salary on January 1 of the first year of the four year cycle, or (ii) 100% of the executive officer’s annualized base salary on December 31 of the last year of the four year cycle.

(2) All the payments shown are potential assumed amounts. There is no assurance that Motorola will achieve results that would lead to payments under LRIP or that any payments will be made under this plan.

(3) At the performance target, which is that point at which 50% of the maximum award under the LRIP would be payable, the indicated payments would be made under the LRIP.

(4) These figures were calculated using the January 1, 1999 annualized base salary for each participating executive officer.

PROXY STATEMENT

RETIREMENT PLANS

         The Motorola, Inc. Pension Plan (the “Pension Plan”) may provide pension benefits to the named executive officers in the future. Most regular U.S. employees who have completed one year of employment with the Company or certain of its subsidiaries are eligible to participate in the Pension Plan. They become vested after five years of service. Normal retirement is at age  65.

         The Company also maintains supplementary retirement plans for employees, including the executive officers named in the Compensation Table, who receive compensation in excess of the reduced compensation limit imposed under the Internal Revenue Code. The plan applicable to the named executives provides that if the benefit payable annually (computed on a single life annuity basis) to any officer under the Pension Plan (which is generally based on varying percentages of specified amounts of final average earnings, prorated for service, as described in the Pension Plan) is less than the benefit calculated under the supplementary plan, that officer will receive supplementary payments upon retirement. Generally, the total annual payments to such officer from both plans will aggregate a percentage of the sum of such officer’s rate of salary at retirement plus an amount equal to the highest average of the Motorola Executive Incentive Plan (“MEIP”) awards paid to such officer for any five years within the last eight years preceding retirement. Such percentage ranges from 40% to 45%, depending upon such officer’s years of service and other factors. However, the total annual pension payable on the basis of a single life annuity to any named executive officer from the Pension Plan and supplementary retirement plan is subject to a maximum of 70% of that officer’s base salary prior to retirement. If the officer is vested and retires at or after age 57 but prior to age 60, he or she may elect to receive a deferred unreduced benefit when he or she attains age 60, or an actuarially reduced benefit when that officer retires contingent upon entering into an agreement not to compete with the Company. If a change in control (as defined) of the Company occurs, the right of each non-vested elected officer to receive supplementary payments will become vested on the date of such change in control.

         Participants in the supplementary retirement plan generally become vested in the plan at age 55. At the time of vesting the Company makes a contribution to the trust for that plan. The purpose of that contribution is to enable the trust to make payments of the benefits under the supplementary retirement plan due to the participant after retirement. Federal and state tax laws require that the participant include in income the amount of any contribution in the year it was made even though the participant receives no cash in connection with such contribution or any payments from the retirement plan. Because the participant receives no cash yet incurs a significant income tax liability, the Company believes that it is appropriate to reimburse the participant so that he or she is not paying additional taxes as a result of a contribution. This is the Company’s policy with respect to elected officers, all of whom participate in the plan, including those named in the Compensation Table.

         Based on salary levels at December 31, 1999, and the average of the MEIP awards paid for the highest five years out of the last eight years, for the named executive officers in the Summary Compensation Table, the estimated annual benefit payable upon retirement at normal retirement age from the Pension Plan, as supplemented pursuant to the officers’ supplementary retirement plan described above and a previous retirement income plan, is as follows: Mr. C. Galvin, $1,608,367; Mr. Tooker, $762,636; Mr. Growney, $778,846; Mr. Gilmore, $780,200, and Mr. Koenemann, $419,401.

TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS

         The Company has adopted a policy (the “salary protection policy”) which generally provides that most employees of the Company and its subsidiaries would receive a lump sum payment, based on years of service and salary, in the event their employment is involuntarily terminated (except for specific reasons) during a two-year period following an unsolicited change in control (as defined) of the Company. This policy, which is subject to specified amendment and termination, also provides for continuation of medical plan benefits. In addition, the Company has entered into Termination Agreements with certain key employees, including the named executive officers, who are not covered by the salary protection policy because of the Termination Agreements. Each Termination Agreement provides for the payment of benefits in the event that (i) the executive officer terminates his or her employment for any reason within one year of a change in control (as defined), (ii) the executive officer terminates his or her employment for “good reason” (as defined) within two years of a change in control, or (iii) the executive officer’s employment is terminated for any reason other than termination for “good cause” (as defined), disability, death or normal retirement within two years of a change in control. In the case of (ii) and (iii) above, accumulation by a person or group of a 20 percent stock position would constitute a change in control, although, in the case of (i) above, a 51 percent stock position would be required. No benefits are payable under the Termination Agreements in the case of any change in control which the Company’s Chairman of the Board determines to be the result of a transaction which was initiated by the Company. The amount of the benefits payable to an executive officer entitled thereto would be equal to, in addition to unpaid salary for accrued vacation days and accrued salary and annual bonus through the termination date, an amount equal to three times the greater of the executive officer’s highest annual base salary in effect during the three years immediately preceding the change in control and the annual base salary in effect on the termination date, plus an amount equal to three times the highest annual bonus received during the immediately preceding five fiscal years ending on or before the termination date. Benefits are subject to offset to the extent that such offset would improve the executive officer’s after-tax position by eliminating any excise taxes otherwise imposed on the employee under the “parachute payment” provisions of the Internal Revenue Code. The term of each Termination Agreement is subject to automatic one-year extensions unless the Company gives 12 months prior notice that it does not wish to extend. In addition, if a change in control occurs during the term, the Termination Agreement continues for an additional two years.

         The following “Report of Compensation Committee on Executive Compensation” and “Performance Graphs” and related disclosure shall not be deemed incorporated by reference by any general statement incorporating this proxy statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.

REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

Objectives of Executive Compensation Program

         Motorola’s executive compensation program is designed to attract and retain key executives critical to the long-term success of the Company. The design is centered around three focal points —a) providing competitive base pay, b) delivering excellent pay when results warrant, and c) generating outstanding returns to shareholders over the long term. The programs were redesigned during 1999 for implementation during 2000 to create stronger links to performance and shareholder value.

Summary of Compensation Plans

         Base pay levels are compared to a competitive peer group within each country and region. In the U.S., the peer group consists of 23 companies which, in the aggregate, the Committee believes fairly represent the Motorola portfolio of businesses. Outside the U.S., the same companies are compared unless other, more compelling competitors for executive talent are present.

         Overall, base salary levels for each executive position are set at the 50th percentile of similar positions in the competitive peer group. When a position does not readily match those found in the data, judgment is applied to determine a fair competitive salary. Some variation above and below the competitive median is allowed when, in the judgment of management and the Committee, the value of the individual ’s experience and specific skill set justifies. Variations are permitted in order to place more emphasis on performance-related rewards that generate significant income to those individuals and businesses that demonstrate their ability to produce strong results. In this way, competitively superior pay goes to those that earn it. As a result, the greatest retention value has been invested in the strongest performers.

         The major executive compensation programs are as follows:

         1. Participants in the Motorola Executive Incentive Plan (the “MEIP”) include elected and appointed vice presidents (including the executives named in the Compensation Table) and employees at certain levels of management and specific professionals who are deemed individual contributors. In 1999, approximately 1,050 people participated in MEIP.

         The MEIP awards are generally earned and paid annually. Awards are determined as a percentage of the participant’s base salary earnings. The Company may provide up to 7% of its annual consolidated pretax earnings after deducting 5% of capital employed, each as defined in the MEIP, for awards under this Plan. The MEIP award for each participant is based on the achievement of a mixture of financial, strategic non-financial and individual goals set for each calendar year. The MEIP sets no limits on the amount of awards to individual participants, except that the aggregate amounts awarded under the MEIP cannot exceed the amount reserved. In addition, the Committee has established target and upper limit MEIP award levels which vary by salary range and which are upgraded periodically based on competitive survey information. For exceptional performance, the upper limit guidelines can be exceeded.

         2. The second program is the Long Range Incentive Plan of 1994 (the “LRIP”). In 1999, 37 of the Company ’s most senior elected officers (including the executives named in the Compensation Table) were eligible for awards, but no awards will be paid.

         The LRIP award is determined, in part, by the Company’s RONA (Return On Net Assets), sales growth and stockholder return over a four-year period, compared to an average of a similar calculation for a group of selected competitive companies chosen by the Committee (the “comparator group index”) and to Company targets. The comparator group index is a group of approximately 20 companies, generally in one or more of the same lines of business as the Company, and believed by the Committee to be appropriate for measuring comparative performance on the basis of the factors in the LRIP over a four-year period. An award is earned only when Company performance exceeds a minimum specified RONA floor, notwithstanding superior performance versus the comparator group index and Company targets. Additionally, the award is determined, in part, by the Company’s fundable growth.

         The LRIP or a predecessor plan has been in effect in 18 succeeding four-year cycles, the first of which began in 1982. Since inception of the LRIP and its predecessor plan, payments have only been made four times, for the cycles ending with 1994, 1995, 1996 and 1997, because the Company’s overall RONA performance had not previously exceeded the required RONA floor. For the four-year cycle ending with 1997, the Company exceeded the Company-wide RONA floor set in the LRIP but payments were less than the maximum award. For the four-year cycles ending with 1998 and 1999, the Company did not meet the Company-wide RONA floor set in the LRIP and no payments were or will be made.

PROXY STATEMENT

        3. A wide range of managerial and individual contributors participate in the Company’s stock option plans. Recipients of stock options for 1999 performance numbered approximately 30,000. There are approximately 36,000 current option holders. Stock options are typically awarded annually to encourage optionees to own Common Stock to align their own personal financial worth to the Company ’s share price growth. The option exercise price is the market price at the time of grant. Options are granted in quantities as low as 50 shares to mid-range and lower-level Company employees, and in substantially higher numbers to senior managers. Traditionally, grants of stock options were made in November or December of each year. The Committee delayed the 1999 grant until January 31, 2000 so that it could fully assess the full year 1999 performance of the Company.

         Beginning with the stock option grant in December 1993, the Company established higher stock ownership guidelines for executive officers, including the Chief Executive Office. Under those guidelines, if a Chief Executive Office member does not own shares of Common Stock representing four times his base salary or if other executive officers do not own shares of Common Stock representing three times their base salaries, then such officers must retain fifty percent of the shares that remain from any exercise of the stock option grant received after December 1993 (after deducting the number of shares of Common Stock that could be surrendered to cover the cost of such exercise and any required tax withholdings, even if he or she does not actually surrender shares), until the minimum stock ownership level is reached. Additionally, these guidelines set a minimum stock ownership level of 5,000 shares of Common Stock for all other elected officers, 1,000 shares of Common Stock for all appointed vice-presidents and 300 shares for all other MEIP participants. Under these additional guidelines, if an elected officer or appointed vice-president does not own shares of Common Stock representing the minimum stock ownership level, then he or she must retain fifty percent of the shares that remain from any exercise of any stock option granted after June 30, 1994, or after the date he or she becomes an elected officer or appointed vice-president if later (after deducting the number of shares of Common Stock that could be surrendered to cover the cost of such exercise and any required tax withholdings, even if he or she does not actually surrender shares), until the minimum Common Stock ownership level is reached.

         On one basis or another, the rewards under each of these major plans depend on overall Company performance, with some also taking account of sector, group, division, small team or individual performance. There have been years when the employees of entire sectors, groups, or divisions, as well as executive officers (including one or more of the five most highly compensated at that time) have received no payments under these plans.

         The description of the Motorola Omninbus Incentive Plan of 2000, which the Board is recommending that stockholders approve at the Annual Meeting, begins on page 8. As noted there, the 2000 Plan will give Motorola the flexibility to keep pace with other “high tech” and industrial companies in a very competitive employment environment.

Chief Executive Office

         The compensation for the Chief Executive Office members consists of base salary, annual MEIP award eligibility, LRIP award eligibility, stock options, restricted stock and certain other benefits. Christopher B. Galvin, Chairman of the Board and Chief Executive Officer, and Robert L. Growney, President and Chief Operating Officer, are the current members of the Chief Executive Office.

         The Committee studied the data gathered from the 23-company peer group mentioned earlier to assess the appropriate competitive compensation levels for members of the Chief Executive Office.

Chief Executive Office Base Salary

         In determining the Chief Executive Office members’ base salaries, the Committee considered the results of the study together with the Company’s performance on its own financial and non-financial strategic goals and the individual performance of the Chief Executive Office members. No particular weight was given to any one of these goals in setting base salaries for the Chief Executive Office members. The competitive study gave the Committee a base from which to modify salary and/or incentive compensation based upon performance. In 1999, the Committee reviewed, and recommended for approval to the Board, the base salaries of the Chief Executive Office members and the full Board approved them.

Chief Executive Office Annual MEIP

         For the 1999 MEIP awards, the Committee assessed performance to the business plan, results from the Company’s Performance Excellence Scorecard and the outstanding results achieved from the restructuring implemented beginning in the second half of 1998. On this basis, the Committee granted awards at the planned levels determined under the competitive study.

Chief Executive Office Stock Options and Restricted Stock Grants

         Options to purchase 300,000 shares of Common Stock at $131.53 per share, the market price on January 31, 2000, the date of grant, were awarded to Christopher B. Galvin as part of the Company ’s annual option program. Options to purchase 275,000 shares were similarly awarded to Robert L. Growney. These stock options vest and become exercisable over four years as follows: 25% on 1/31/01; 25% on 1/31/02; 25% on 1/31/03; and 25% on 1/31/04. 100,000 shares of restricted stock were awarded to Mr. Galvin and 90,000 shares of restricted stock were awarded to Mr. Growney on January 31, 2000. The restrictions on 50% of the shares of restricted stock lapse upon the executive officer’s retirement. The restrictions on the remaining 50% of the shares lapse on a scheduled basis over the executive officer’s career as long as he is employed by the Company or a subsidiary. These restrictions lapse on 25% of the shares in 4 years and on 25% of the shares in 6 years after the date of grant. In certain circumstances, those restrictions could all lapse at retirement. In addition, for the shares held by these executives, if total shareholder return from the date of grant is 125% or greater before the restrictions on the time-vesting 50% of their shares lapse, the restrictions on these shares would automatically lapse. Upon death or total and permanent disability all restrictions lapse.

         Options and restricted stock were granted to these executives in recognition of their successful efforts to significantly improve the Company’s performance during 1999 and to provide them with strong incentive to continue to increase the value of the company during their employment. The level of option awards and restricted stock were made using the Committee’s judgment considering the vesting schedule and restrictions and the Company’s performance in 1999. The Committee also considered the options granted to and exercised by these Chief Executive Office members from 1989 to 1999 and their stock ownership as of January 1, 2000.

Chief Executive Office LRIP

          The minimum corporate four-year RONA percentage required to be met for payment under the LRIP was not met for the four-year periods ending with 1998 and 1999 and no payments were or will be made for these periods. For the four-year period ending 1997, performance met plan criteria and the CEO and COO were awarded $505,260 and $256,640, respectively, under the LRIP. This represented 25.5% and 17.85% of the maximum awards.

Section 162(m) of the Internal Revenue Code

         Section 162(m) of the Internal Revenue Code generally limits the corporate tax deduction to one million dollars for compensation paid to named executive officers unless certain requirements are met. The Company has not been entitled to deduct some amount of payments under the Motorola Executive Incentive Plan in the past. The 1999 MEIP awards will not be deductible to the extent they cause the applicable employee remuneration to exceed one million dollars during 1999. MEIP awards fail to qualify as “performance based compensation” exempt from the limitation on deductions that is imposed by Section 162(m) because the Committee exercises discretion in making these awards. The Committee believes that the discretionary component of this plan permits the Committee to make decisions in the best interests of the Company and its stockholders and it intends, therefore, to continue the process by which it determines MEIP awards. The Stock Option Plan of 1996 and the Long Range Incentive Plan of 1994 meet the requirements for exemption under Section 162(m) and compensation paid under these plans in 1999, if any, also will be deductible. The Motorola Incentive Plan of 1998 permits various types of awards, some of which qualify for exemption under Section 162(m) and some of which do not. Stock options, performance shares and stock appreciation rights that are granted under the plan qualify as “performance based compensation” and, as such, are exempt from the limitation on deductions. Outright grants of common stock, restricted stock and/or cash do not qualify for exemption and are subject to the Section 162(m) limitation on deductions.

         Overall, the Committee believes that the Chief Executive Office members are being appropriately compensated in a manner that relates to performance and is in the long-term interests of the stockholders.

Respectfully submitted,

Samuel C. Scott III, Chairman

H. Laurance Fuller

John E. Pepper, Jr.

PROXY STATEMENT

PERFORMANCE GRAPHS

The following graphs compare the five-year and one-year cumulative total returns of Motorola, Inc., the S&P 500 Index and a composite S&P Electronic Subgroups Index composed of the following nine S&P indices, weighted by market value at each measurement point: the S&P Communications Equipment/Manufacturers Index, the S&P Computers (Peripherals) Index, the S&P Electrical Equipment Index, the S&P Electronics (Component Distributors) Index, the S&P Electronics Index, the S&P Computers (Hardware) Index, the S&P Computers (Networking) Index, the S&P Electronics (Semiconductors) Index and the S&P Equipment (Semiconductors) Index. This composite index contains a total of 48 electronics companies. The graphs assume $100 was invested in the stock or the Index on December 31, 1994 or December 31, 1998, respectively, and also assume the reinvestment of dividends.

Comparison of Five-Year Cumulative Total Return

                               [LINE CHART]

Measurement Period                          S&P
(Fiscal Year Covered)        MOTOROLA       500 INDEX    SUB-GROUPS INDEX
- -------------------          --------       ---------    ----------------
1994                         $100           $100         $100
1995                         $ 99.0         $136.5       $137.5
1996                         $107.1         $169.5       $192.4
1997                         $100.9         $226.0       $251.6
1998                         $108.6         $291.0       $418.0
1999                         $262.7         $352.3       $733.9