SCHEDULE 14A INFORMATION
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, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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[LOGO]
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PRINCIPAL EXECUTIVE OFFICES: PLACE OF MEETING:
1303 East Algonquin Road 1297 East Algonquin Road
Schaumburg, Illinois 60196 Schaumburg, Illinois 60196
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders:
Notice is hereby given that the annual meeting of stockholders of Motorola,
Inc. (the "Company" or "Motorola"), a Delaware corporation, will be held in the
Auditorium at the Company's Galvin Center, 1297 East Algonquin Road, Schaumburg,
Illinois on Tuesday, May 2, 1995 at 5:00 P. M., local time, for the following
purposes:
1. To elect directors for the ensuing year;
2. To consider and vote upon the Non-Employee Directors' Stock Plan; and
3. To transact such other business as may properly come before the meeting.
Only stockholders of the Company of record at the close of business on March
15, 1995 will be entitled to vote at the meeting.
Stockholders are requested to vote, date, sign and mail their proxies in the
form enclosed even though they now plan to attend the meeting. If stockholders
are present at the meeting, their proxies may be withdrawn, and they may vote
personally on all matters brought before the meeting.
By order of the Board of Directors
Richard H. Weise
SECRETARY
March 21, 1995
IMPORTANT
WE HOPE YOU WILL ATTEND THE STOCKHOLDERS' MEETING. IN ORDER THAT THERE MAY
BE A PROPER REPRESENTATION AT THE MEETING, EACH STOCKHOLDER IS REQUESTED TO SEND
IN HIS OR HER PROXY IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES. ATTENTION BY STOCKHOLDERS TO THIS REQUEST WILL REDUCE THE
COMPANY'S EXPENSE IN SOLICITING PROXIES.
PROXY STATEMENT
The annual meeting of stockholders of Motorola, Inc. (the "Company" or
"Motorola") will be held on May 2, 1995 for the purposes set forth in the
accompanying Notice. The only matters which the Board of Directors of the
Company intend to present are the election of directors and the adoption of the
Non-Employee Directors' Stock Plan. It is anticipated that this Proxy Statement
and the enclosed proxy will be first mailed to stockholders on or about March
21, 1995.
Only stockholders of record at the close of business on March 15, 1995 will
be entitled to notice of and to vote at the meeting or any adjournments thereof.
On that date, there were 588,517,254 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. For each matter, including the election of
directors, which may come before the meeting, each share is entitled to one
vote.
The enclosed proxy is solicited by the Board of Directors of the Company. If
the proxy in such form is properly executed and returned, and choices are
specified, the shares represented thereby will be voted at the meeting in
accordance with those instructions. If no choices are specified, the proxy will
be voted--
FOR - Election of directors nominated by the Board of Directors and
FOR - Adoption of the Non-Employee Directors' Stock Plan.
The proxy, if given, may be revoked by the stockholder giving it at any time
before it is voted, and such right is not limited by or subject to compliance
with any specified formal procedure. A proxy may be revoked by written notice of
revocation or by a later proxy, in either case delivered to the Secretary of the
Company. Attendance at the 1995 Annual Meeting will not automatically revoke a
proxy, but a stockholder in attendance may request a ballot and vote in person,
thereby revoking a prior granted proxy.
The Company's Annual Report for the fiscal year ended December 31, 1994 was
first mailed to stockholders on or about March 21, 1995. Stockholders are
referred to that report for financial and other information about the activities
of the Company. The Annual Report is not incorporated by reference into this
Proxy Statement and is not to be deemed a part hereof.
ELECTION OF DIRECTORS
The terms of office of all present directors of the Company will expire on
the day of the annual meeting upon the election of their successors. The number
of directors of the Company to be elected at the annual meeting is eighteen. The
directors elected at the annual meeting will serve until their respective
successors are elected and qualified or until earlier death or resignation.
NOMINEES
Each of the nominees named below is currently a director of the Company and
each was elected at the annual meeting of stockholders held on May 3, 1994,
except for Mr. Fuller and Mr. Pepper who were elected to the Board of Directors
in November, 1994 and Ms. Lewent and Dr. White who are standing for election for
the first time.
Erich Bloch and Wallace C. Doud are not standing for re-election to the
Board of Directors pursuant to the Company's policy on age and tenure of
directors.
At the time of the annual meeting, if any of the nominees named below is not
available to serve as a director (an event which the Board of Directors does not
now anticipate), the proxies will be voted for the election as directors of such
other person or persons as the Board of Directors may designate, unless the
Board of Directors, in its discretion, adopts a resolution reducing the number
of directors.
Set forth below are the names and ages of the nominees, the principal
occupation of each, the year in which first elected a director of the Company,
the business experience of each for at least the past five years and certain
other information concerning each of the nominees.
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[PHOTO] WILLIAM J. WEISZ
PRINCIPAL OCCUPATION: CHAIRMAN OF THE BOARD, MOTOROLA, INC.
DIRECTOR SINCE 1968
AGE AT 12/31/94--67
Mr. Weisz joined the Company in 1948; became vice
president in 1961; general manager of the communications
division in 1965; executive vice president and assistant
chief operating officer in 1969; president in 1970; chief
operating officer in 1972; vice chairman of the board in
1980; chief executive officer in 1986; and officer of the
board in 1988. Mr. Weisz retired as an officer of the Company
in 1989, but remained active with the Company as a
consultant, and a teacher at Motorola University and, in
1993, was elected chairman of the board. He is a member of
the Board of Directors of Harris Bankcorp, Inc. and its wholly-owned subsidiary,
Harris Trust and Savings Bank. Mr. Weisz is a Fellow of the Institute of
Electrical and Electronics Engineers and the Radio Club of America and is past
chairman of the Electronic Industries Association Board of Governors. He is a
member of the Massachusetts Institute of Technology Corporation (Board of
Trustees). He has served on a number of government advisory committees. Mr.
Weisz received a B.S.E.E. degree from the Massachusetts Institute of Technology
and did graduate work at Northwestern University and the University of Chicago.
He has an honorary Doctor of Business Administration degree from St. Ambrose
College and has been given the MIT Corporate Leadership Award and the Electronic
Industries Association Medal of Honor.
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[PHOTO] DAVID R. CLARE
PRINCIPAL OCCUPATION: RETIRED; FORMERLY PRESIDENT,
JOHNSON & JOHNSON
DIRECTOR SINCE 1986; CHAIRMAN OF THE COMPENSATION COMMITTEE
AND MEMBER OF THE EXECUTIVE COMMITTEE
AGE AT 12/31/94--69
Mr. Clare joined Johnson & Johnson, a health-care
products supplier, in 1946 as a manufacturing trainee and
spent his entire career with that company. He served in a
variety of assignments and, in 1971, was elected a Director
and member of the Executive Committee. In 1976, he became
President and Chairman of the Executive Committee. In 1989,
he retired from those positions and became Chairman of the
Finance Committee and, in 1990, he retired from Johnson & Johnson's Board of
Directors. He is a member of the Board of Trustees of the Robert Wood Johnson
Foundation. He is a graduate of the Massachusetts Institute of Technology.
3
[PHOTO] H. LAURANCE FULLER
PRINCIPAL OCCUPATION: CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER, AMOCO CORPORATION
DIRECTOR SINCE 1994
AGE AT 12/31/94--56
Mr. Fuller is Chairman of the Board, President and Chief
Executive Officer of Amoco Corporation, an energy products
company. Mr. Fuller was elected President of Amoco
Corporation in 1983, and its Chairman of the Board and Chief
Executive Officer in 1991. He has been a member of Amoco
Corporation's Executive Committee and a member of the Board
of Directors of Amoco since 1981. Mr. Fuller joined Amoco in
1961, was named President of Amoco Oil Company in 1978, and
was elected Executive Vice President of Amoco Corporation in 1981. He is also a
director of The Chase Manhattan Corporation, The Chase Manhattan Bank, N.A.,
Abbott Laboratories, the American Petroleum Institute, Catalyst, and
Rehabilitation Institute of Chicago. He is a trustee of Northwestern University
and the Chicago Orchestral Association, and a member of the University Council
of Cornell University. Mr. Fuller graduated from Cornell University in 1961 with
a B.S. degree in chemical engineering, and earned a J.D. degree from DePaul
University Law School in 1965.
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[PHOTO] CHRISTOPHER B. GALVIN
PRINCIPAL OCCUPATION: PRESIDENT AND CHIEF OPERATING OFFICER,
MOTOROLA, INC.
DIRECTOR SINCE 1988; MEMBER OF THE EXECUTIVE AND FINANCE
COMMITTEES
AGE AT 12/31/94--44
Mr. Galvin began working for the Company part-time in
1967 and full-time in 1973. Between 1973 and 1988 he served
in a variety of sales, sales management, marketing, product
management, service management and general management
positions in the Company's Communications, Tegal subsidiary
(semiconductor capital equipment products) and Paging
businesses. In 1988, he became Chief Corporate Staff Officer
and was elected to the Motorola's Board of Directors. In
1990, he was appointed to the Office of the Chief Executive as Senior Executive
Vice President and Assistant Chief Operating Officer. He has served as President
and Chief Operating Officer since 1993. Mr. Galvin received a bachelor's degree
from Northwestern University and a master's degree with distinction from the
Kellogg Graduate School of Management at Northwestern. He is a trustee of Rand
Corporation, Northwestern University, and the American Enterprise Institute. Mr.
Galvin is a son of Robert W. Galvin.
4
[PHOTO] ROBERT W. GALVIN
PRINCIPAL OCCUPATION: CHAIRMAN OF THE EXECUTIVE COMMITTEE,
MOTOROLA, INC.
DIRECTOR SINCE 1945
AGE AT 12/31/94--72
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 and recognition.
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[PHOTO] JOHN T. HICKEY
PRINCIPAL OCCUPATION: RETIRED; FORMERLY EXECUTIVE VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER, MOTOROLA, INC.
DIRECTOR SINCE 1974; CHAIRMAN OF THE FINANCE COMMITTEE AND
MEMBER OF THE EXECUTIVE AND AUDIT COMMITTEES
AGE AT 12/31/94--69
Mr. Hickey joined the Company in 1948; became manager of
the semiconductor products division in 1956; assistant to the
president in 1958; vice president for planning in 1965; vice
president for finance and secretary in 1970; senior vice
president and chief financial officer in 1974; and executive
vice president in 1984. He retired in 1985. He also serves as
a director of Trustmark Insurance Company. He is a past
Chairman of the Board of Trustees of Loyola Academy, Wilmette, Illinois. Mr.
Hickey graduated from Loyola University of Chicago and holds an M.B.A. degree
from the University of Chicago.
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[PHOTO] ANNE P. JONES
PRINCIPAL OCCUPATION: CONSULTANT
DIRECTOR SINCE 1984; CHAIRMAN OF THE LEGAL COMMITTEE AND
MEMBER OF THE AUDIT COMMITTEE
AGE AT 12/31/94--59
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. Prior
thereto, she was a Commissioner of the Federal Communications
Commission, General Counsel of the Federal Home Loan Bank
Board, and was on the staff of the Securities and Exchange
Commission from 1968 to 1977. She was Director of the
Division of Investment Management of the Securities and
Exchange Commission in 1976 and 1977. Ms. Jones is a director of the IDS Mutual
Fund Group and C-COR Electronics, Inc. She holds B.S. and L.L.B. degrees from
Boston College and its Law School, respectively.
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[PHOTO] DONALD R. JONES
PRINCIPAL OCCUPATION: RETIRED; FORMERLY EXECUTIVE VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER, MOTOROLA, INC.
DIRECTOR SINCE 1987; MEMBER OF THE FINANCE AND LEGAL
COMMITTEES
AGE AT 12/31/94--64
Mr. Jones joined the Company in 1951; became director of
finance and planning of the communications division in 1968;
treasurer of the Company in 1971; vice president and
assistant chief financial officer in 1974; senior vice
president and assistant chief financial officer in 1984; and
executive vice president and chief financial officer in 1985.
He retired in 1991. He is a trustee of the Kemper Mutual
Funds, Chicago, Illinois. Mr. Jones received a B.S.E.E.
degree from the University of Illinois and did graduate work in Business
Administration at Northwestern University.
6
[PHOTO] JUDY C. LEWENT
PRINCIPAL OCCUPATION: SENIOR VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER, MERCK & CO., INC.
NOMINEE
AGE AT 12/31/94--45
Ms. Lewent has been Senior Vice President and Chief
Financial Officer, Merck & Co., Inc., a pharmaceuticals
company, since 1992 and was formerly its Vice
President--Finance and Chief Financial Officer (1990-1992)
and Vice President and Treasurer (1987-1990). She is also a
director of Astra Merck, Inc.; the DuPont Merck
Pharmaceutical Company; Johnson & Johnson Merck Consumer
Pharmaceuticals Company; The Quaker Oats Company; Rockefeller
Financial Services, Inc.; and Rockefeller & Co., Inc. Ms. Lewent received a B.S.
degree from Goucher College and a M.S. degree from MIT Sloan School of
Management.
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[PHOTO] WALTER E. MASSEY
PRINCIPAL OCCUPATION: PROVOST AND SENIOR VICE PRESIDENT,
ACADEMIC AFFAIRS, UNIVERSITY OF CALIFORNIA SYSTEM
DIRECTOR SINCE 1993; MEMBER OF THE NOMINATING AND
TECHNOLOGY COMMITTEES
AGE AT 12/31/94--56
After being staff physicist and post-doctoral fellow at
Argonne National Laboratory, assistant professor at the
University of Illinois, associate professor and professor of
physics at Brown University, Dr. Massey then joined Argonne
National Laboratory as its director and was named to the
additional position of Vice President for Research at the
University of Chicago in 1982. In 1984, he became Vice
President for Research and for Argonne National Laboratory, the University of
Chicago. In 1991, he was appointed, by President Bush, the Director of the
National Science Foundation, which office he held until April, 1993. Since
April, 1993 he has been Provost and Senior Vice President, Academic Affairs,
University of California System. Dr. Massey received a Ph.D. degree in physics
and Master of Arts degree from Washington University. He also holds a Bachelor
of Science degree in Physics and Mathematics from Morehouse College. He also was
a past President of the American Physical Society. He is a director of Amoco
Corporation and BankAmerica Corporation and its subsidiary, Bank of America,
N.T.S.A.
7
[PHOTO] JOHN F. MITCHELL
PRINCIPAL OCCUPATION: VICE CHAIRMAN AND OFFICER OF THE BOARD,
MOTOROLA, INC.
DIRECTOR SINCE 1974; MEMBER OF THE EXECUTIVE AND
TECHNOLOGY COMMITTEES
AGE AT 12/31/94--66
Mr. Mitchell joined the Company in 1953; became vice
president of the Company in 1968; general manager of the
communications division in 1972; executive vice president and
assistant chief operating officer in 1975; president in 1980;
chief operating officer in 1986; and vice chairman and
officer of the board in 1988. He is former chairman of the
Electronic Industries Association and a former member of its
Board of Governors. He is a former director of the National Association of
Manufacturers; a member of the President's National Security Telecommunications
Advisory Committee; a Fellow of the Radio Club of America; is a director of
National Material Corporation and is on the Advisory Board of Trustees of the
Foundation for Student Communications, Princeton University. Mr. Mitchell
received a B.S. degree from the Illinois Institute of Technology. He was awarded
an honorary doctorate from Iowa Wesleyan College.
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[PHOTO] THOMAS J. MURRIN
PRINCIPAL OCCUPATION: DEAN OF DUQUESNE UNIVERSITY'S
SCHOOL OF BUSINESS ADMINISTRATION
DIRECTOR SINCE 1991; MEMBER OF THE COMPENSATION AND
NOMINATING COMMITTEES
AGE AT 12/31/94--65
Mr. Murrin is Dean of Duquesne University's School of
Business Administration. He previously was Deputy Secretary
of the U. S. Department of Commerce and served as a U.S.
delegate to the NATO Industrial Advisory Group and as a
member of the Defense Policy Advisory Committee on Trade.
From 1983 to 1987, he was President of the Energy and
Advanced Technology Group of Westinghouse Electric
Corporation, which he joined in 1951. Mr. Murrin also served as chairman of the
Commission on the Federal Appointment Process, the Federal Quality Institute,
the Board of Overseers of the Commerce Department's Malcolm Baldrige National
Quality Award and the Defense Department's Defense Manufacturing Board. He has
also served as Distinguished Service Professor in Technology and Management at
Carnegie Mellon University, as Chairman of the Board of Trustees of Duquesne
University and as a member of the Board of Trustees of Fordham University. He is
a director of Duquesne Light Company and its holding company, DQE, Inc.
8
[PHOTO] JOHN E. PEPPER, JR.
PRINCIPAL OCCUPATION: PRESIDENT OF PROCTER & GAMBLE CO.
DIRECTOR SINCE 1994
AGE AT 12/31/94--56
John E. Pepper, Jr., is President and member of the Board
of Directors of Procter & Gamble Co., a consumer products
company. Mr. Pepper joined Procter & Gamble in 1963, became
General Manager of Procter & Gamble Italia in 1974, and was
named Division Manager - International in 1977. In 1978, he
returned to the U.S. as Vice President-Packaged Soap and
Detergent Division. He was elected Executive Vice President
of Procter & Gamble Co. and named to its Board of Directors
in 1984 and was named President in 1986. Mr. Pepper is also a
director of the Xerox Corporation. He is Co-Chairman of the Governor's Education
Council of the State of Ohio, a member of the Yale School of Management Advisory
Council, and was Chairman of the 1994 Cincinnati United Way Campaign. He is
Co-Chairman of the Cincinnati Youth Collaborative, a trustee of the Christ
Church Endowment Fund and the Cincinnati Art Museum. Mr. Pepper graduated from
Yale University in 1960 and holds honorary doctorate degrees from Mount St.
Joseph College and St. Petersburg University (Russia).
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[PHOTO] SAMUEL C. SCOTT III
PRINCIPAL OCCUPATION: CORPORATE VICE PRESIDENT OF
CPC INTERNATIONAL, INC.
DIRECTOR SINCE 1993; MEMBER OF THE COMPENSATION AND
FINANCE COMMITTEES
AGE AT 12/31/94--50
Mr. Scott is currently a Corporate Vice President of CPC
International, Inc., a consumer foods company, and President
of Corn Products, its North American corn refining business.
Mr. Scott joined Corn Products in 1973 and has held a variety
of increasingly responsible positions with the company since
that time. He received a Bachelor of Science degree in
mechanical engineering and a Master of Business
Administration degree from Fairleigh Dickinson University. Mr. Scott is on the
Boards of Directors of Arancia-CPC, Inroads/Chicago, MERC (Minority Economic
Resources Corporation), Harris Bank Argo, and the Corn Refiners Association.
9
[PHOTO] GARY L. TOOKER
PRINCIPAL OCCUPATION: VICE CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER, MOTOROLA, INC.
DIRECTOR SINCE 1986; MEMBER OF THE EXECUTIVE, FINANCE AND
LEGAL COMMITTEES
AGE AT 12/31/94--55
Mr. Tooker started with the Company in 1962, holding
ascending marketing and operations assignments within the
semiconductor division; he was appointed director of product
operations--MOS in 1974; in 1975, he was elected corporate
vice president and general manager of the discrete
semiconductor division; vice president and general manager of
the group's international semiconductor division in 1980;
vice president and general manager of the semiconductor products sector in 1981;
executive vice president and general manager of the semiconductor products
sector in 1984; senior executive vice president and chief corporate staff
officer in 1986; chief operating officer in 1988; president in 1990; and vice
chairman of the board and chief executive officer in 1993. Mr. Tooker has served
as chairman of the Semiconductor Industry Association Board of Directors, member
of the Arizona Association of Industries Board of Directors, the Scottsdale,
Arizona Boys Club Board of Directors and as a member of the Advisory Council on
Engineering at Arizona State University. He is the past Chairman of the Board of
Directors of the American Electronics Association. He is a member of the Board
of Directors of Junior Achievement of Chicago, the Arizona State University
Alumni Association and the Arizona State University Foundation. He is a director
and deputy international president of the Pacific Basin Economic Council and
chairman of its U.S. Member Committee. He is active in the Chicago United Way.
He is a director of Eaton Corporation and a member of the Electrical
Manufacturers Club, the Chicago Economics Club, the American Management
Association and the Institute of Electrical and Electronics Engineers. In 1983,
he received the Distinguished Alumnus Award from Arizona State University. 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.
10
[PHOTO] GARDINER L. TUCKER
PRINCIPAL OCCUPATION: RETIRED; FORMERLY VICE PRESIDENT FOR
SCIENCE AND TECHNOLOGY, INTERNATIONAL PAPER COMPANY
DIRECTOR SINCE 1980; CHAIRMAN OF THE TECHNOLOGY COMMITTEE AND
MEMBER OF THE EXECUTIVE AND AUDIT COMMITTEES
AGE AT 12/31/94--69
Dr. Tucker joined International Business Machines
Corporation in 1952 as a research scientist. Thereafter, he
served in a variety of research positions for IBM, including
manager of semiconductor and transistor research at an IBM
laboratory. In 1961, he was appointed Director of Development
Engineering for IBM World Trade Corporation and in 1963,
Director of Research for IBM. Starting in 1967, he served in
the Department of Defense as Deputy Director of Defense Research and Engineering
for Electronics and Information Systems; as Principal Deputy Director of Defense
Research and Engineering; and in 1970, as Assistant Secretary of Defense for
Systems Analysis. From 1973 to 1976, he was Assistant Secretary General of NATO
for Defense Support. From 1976 to 1985, he was vice president for science and
technology, International Paper Company, a paper and building materials
producer. Dr. Tucker received an A.B. degree from Columbia College in New York
City and a Ph.D. in Physics from Columbia University.
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[PHOTO] B. KENNETH WEST
PRINCIPAL OCCUPATION: CHAIRMAN OF THE BOARD, HARRIS BANKCORP,
INC.
DIRECTOR SINCE 1976; CHAIRMAN OF THE NOMINATING COMMITTEE AND
MEMBER OF THE EXECUTIVE AND FINANCE COMMITTEES
AGE AT 12/31/94--61
Mr. West is Chairman of the Board of Harris Trust and
Savings Bank and its holding company, Harris Bankcorp, Inc.
He had been employed at Harris since 1957, and was elected
President of Harris in 1980 and Chairman and Chief Executive
Officer in 1984. In September 1993 he retired as chief
executive officer and as an employee, retaining his position
as Chairman of the Board. He is also a director of The Pepper
Companies, Inc. A native of Carthage, Illinois, Mr. West
joined Harris after two years of service as a U.S. Navy Officer. He is a 1955
Phi Beta Kappa graduate of the University of Illinois and after joining the bank
completed night classes to receive an M.B.A. with honors in 1960 from the
University of Chicago. He is a member of and past chairman of the board of
trustees of the University of Chicago and in 1988 was awarded the University's
honorary Doctor of Laws degree. He is immediate past President of the University
of Illinois Foundation and is the immediate past Chairman of the Civic Committee
of the Commercial Club of Chicago of which he is a past President.
11
[PHOTO] DR. JOHN A. WHITE
PRINCIPAL OCCUPATION: DEAN OF ENGINEERING,
GEORGIA INSTITUTE OF TECHNOLOGY
NOMINEE
AGE AT 12/31/94--55
Dr. White has served since July 1, 1991, as Dean of
Engineering at Georgia Institute of Technology, having been a
member of the faculty since 1975. During the period from July
1988 to September 1991, he served as Assistant Director of
the National Science Foundation in Washington, D.C. through
an Intergovernmental Personnel Agreement with Georgia Tech.
He is a director of Eastman Chemical Company and Russell
Corporation. Dr. White received a B.S.I.E. from the
University of Arkansas, a M.S.I.E. from Virginia Tech and a Ph.D from Ohio State
University.
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INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick served as the Company's independent public accountants for
the fiscal year ended December 31, 1994 and are serving in such capacity for the
current fiscal year. The appointment of independent public accountants is made
annually by the Board of Directors. The decision of the Board of Directors is
based on the recommendation of the audit committee, which reviews both the audit
scope and estimated audit fees. Representatives of KPMG Peat Marwick are
expected to be present at the annual meeting and will have the opportunity to
make a statement if they desire to do so and to respond to appropriate questions
of stockholders.
MEETINGS OF THE BOARD OF DIRECTORS OF THE COMPANY
During 1994, the Board of Directors of the Company met in person four times.
Two of the meetings were of two days duration.
All incumbent directors attended 75% or more of the combined total of
meetings and actions of the Board of Directors and the committees on which they
served during 1994.
COMMITTEES OF THE BOARD OF DIRECTORS OF THE COMPANY
The Company has standing audit, compensation, nominating, executive,
finance, legal and technology committees of the Board of Directors.
The present members of the audit committee are Messrs. Doud, CHAIRMAN,
Hickey and Tucker and Ms. A. Jones. This committee held two meetings during
1994. The principal functions of the audit committee are as follows:
1. Recommend to the Board of Directors the selection of independent public
accountants;
2. Review and approve the scope of the examinations to be conducted by the
independent public accountants;
12
3. Review the reports and evaluations of the independent public accountants
and monitor progress toward correction of any important deficiencies
specified by such accountants;
4. Review the accounting standards and principles followed by the Company,
and in this connection, receive annually from the independent public
accountants a report describing any material item affecting the financial
statements which might be given alternative treatment;
5. Receive internal audit reports directly from the Company's internal
auditors and monitor progress in the correction of any important
deficiencies; and
6. Monitor adherence to established corporate practices, including such
matters as conflict of interest, political contributions, questionable
payments and standards of business conduct, and arrange for any special
investigations or audits that may be deemed necessary.
The present members of the compensation committee are Messrs. Clare,
CHAIRMAN, Murrin and Scott. This committee met seven times during 1994. The
compensation of executive officers is reviewed by the committee and the
compensation of other elected officers of the Company is reviewed and fixed by
the compensation committee. In addition, the compensation committee administers
the Motorola Executive Incentive Plan, the Long Range Incentive Program, the
Long Range Incentive Plan of 1994, the Share Option Plans, and generally
exercises the authority of the Board of Directors with respect to other benefit
plans of the Company.
The present members of the nominating committee are Messrs. West, CHAIRMAN,
Massey and Murrin. This committee held three meetings in 1994. The principal
functions of the nominating committee are as follows:
1. Provide written criteria to be used as a guideline in selecting and
reviewing candidates for the Board;
2. Develop and maintain a list of potential candidates for the Board;
3. Provide an indoctrination and education program for new members of the
Board;
4. Review the performance and contribution of outside members of the Board;
and
5. Determine the need for, and qualification of, any corporate officer to
be a candidate for nomination.
The nominating committee will consider individuals recommended by
stockholders of the Company as potential future nominees. The names of such
individuals together with a full statement of their qualifications to serve as
directors of the Company should be submitted to the nominating committee in care
of the Secretary of the Company at 1303 East Algonquin Road, Schaumburg,
Illinois 60196.
Messrs. R. Galvin, CHAIRMAN, Clare, Doud, C. Galvin, Hickey, Mitchell,
Tooker, Tucker, and West are the present members of the executive committee
which reviews the Company's strategic
13
planning process and the allocation of resources and exercises the authority of
the Board on specific matters assigned by the Board from time to time. This
committee did not hold any meetings in 1994.
Messrs. Hickey, CHAIRMAN, C. Galvin, D. Jones, Scott, Tooker and West are
the present members of the finance committee, which discusses and makes
recommendations with respect to the overall financial posture of the Company.
This committee held three meetings in 1994.
Messrs. Tucker, CHAIRMAN, Bloch, Doud, Massey and Mitchell are the present
members of the technology committee, which identifies and assesses significant
technological issues and needs affecting the Company. This committee held two
meetings in 1994.
Ms. A. Jones, CHAIRMAN, and Messrs. Bloch, D. Jones and Tooker are the
present members of the legal committee, which is responsible for maintaining an
overview of the Company's legal affairs and its relationship with all internal
and external attorneys. This committee held two meetings in 1994.
DIRECTOR COMPENSATION
The standard arrangement during 1994 for compensating directors who are not
employees ("non-officer directors") of the Company was the payment of an annual
retainer of $35,000 to each director. The annual retainer was increased to
$40,000, effective January 1, 1995. Each non-officer director who is chairman of
a committee receives an additional $4,000 per annum. In addition, each
non-officer director receives $1,500 per day for directors' meetings attended,
$1,000 per day for full or partial days devoted to assigned work on behalf of
committees of the Board, including attendance at committee meetings which are
not held in conjunction with, and on the same day as, directors' meetings; $500
per day for committee meetings attended which are held in conjunction with, and
on the same day as, directors' meetings and $1,000 per day for certain other
services for the benefit of the Company or any subsidiary which are requested by
the Board, any committee of the Board or a member of the Chief Executive Office
(currently, Gary L. Tooker and Christopher B. Galvin). Non-officer directors may
elect to defer receipt of all or any portion of their annual retainer and their
per meeting fees until the year after that in which 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. The Company also reimburses its directors and spouses who
accompany directors, in certain instances, for travel, lodging and related
expenses they incur in attending Board and committee meetings. In addition,
non-officer directors participate in a retirement plan which will pay the
director, upon retirement on or after age 65, an annual benefit equal to 10
percent of the annual retainer in effect on the date of his or her retirement
for each year of service with a maximum benefit equal to 80 percent of such
retainer. Benefits will continue for the life of the retired director and the
director's spouse. Directors who are full time employees of the Company do not
accrue benefits under this plan unless they remain on the Board of Directors
after retiring from the Company. Non-officer directors are covered by insurance
which provides accidental death and dismemberment
14
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, 1994 was approximately $2,760.
Mr. Robert W. Galvin, a director and executive officer, owns an airplane
which he used on business travel for the Company for approximately 82.9% of its
miles flown in 1994. The Company employs pilots and mechanics for airplanes
which it owns. 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 1994, and
historically, the percentage of the total expenses of the airplane which has
been paid by the Company has been less than the percentage of usage of the
airplane for Company business. In 1994, a company wholly-owned by the wife of
Mr. Christopher B. Galvin performed interior design and related services, at
cost, for a multiple of clients in the Company. Payments totalling approximately
$90,000 have been or are to be made to her company. No profit was made by her
company from these services. The Company considers these arrangements to be
economically beneficial to it.
Mr. Erich Bloch, a director, had a consulting agreement with the Company
under which he performed services as a consultant to the Company on various
matters. He received $30,000 plus expenses under this arrangement in 1994. Mr.
John Hickey, a director, had a consulting agreement with the Company under which
he consulted with investment professionals within the Company on an as-needed
basis. He received $32,000 plus expenses under this arrangement in 1994. In
addition, Mr. Donald Jones, a director, had a consulting agreement with the
Company under which he served as Chairman of the Advisory and Retirement
Committees and received $8,000 per quarter. Mr. Jones received during 1994,
$38,000 for his services which included $6,000 for consulting fees for the
fourth quarter of 1993, and was reimbursed for his expenses. Dr. Gardiner
Tucker, a director, also had a consulting agreement with the Company under which
he was compensated $15,000 in 1994 for his services which included $5,000 for
consulting fees for the second half of 1993, and was also reimbursed for his
expenses connected with his services. Mr. William J. Weisz has an agreement with
the Company under which he performs services as a consultant to the Company on
various matters, the majority of which are related to his duties as Chairman of
the Board of Directors. In 1994 he was paid $75,000 for the month of January and
$25,000 a month thereafter. Thus Mr. Weisz received $350,000 plus expenses in
1994 in addition to the other payments he receives as a director. Additionally,
Mr. Weisz was awarded a bonus of $175,000 in recognition of his performance as
Chairman of the Board of Directors as well as other activities he performs
frequently. Ms. Anne Jones was a partner in the law firm of Sutherland, Asbill &
Brennan which furnished legal services to the Company in 1994 and she may serve
as a consultant to the Company from time to time.
15
APPROVAL BY STOCKHOLDERS
In order to be elected, a nominee must receive the vote of a plurality of
the outstanding shares of Common Stock represented at the meeting and entitled
to vote. Shares may be voted for or withheld from each nominee. Shares that are
withheld and broker non-votes will have no effect on the outcome of the election
because directors will be elected by a plurality of the shares voted for
directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION AS DIRECTORS
OF THE NOMINEES NAMED HEREIN. UNLESS INDICATED OTHERWISE ON THE PROXY, THE
SHARES WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF SUCH NOMINEES.
16
SECURITY OWNERSHIP OF MANAGEMENT OF THE COMPANY
The following table sets forth information as of January 31, 1995 (except as
indicated below) regarding the beneficial ownership of Common Stock by each
director and nominee for director of the Company, by the persons named in the
Summary Compensation Table on page 19, and by all current directors, nominees
and current executive officers of the Company as a group.
SHARES UNDER TOTAL SHARES
SHARES EXERCISABLE BENEFICIALLY
NAME OWNED(1) OPTIONS(2) OWNED(3)
- ----------------------------------------- ------------ ------------- -----------------
Gary L. Tooker 157,326 424,000 582,841(4)
Christopher B. Galvin (5) 2,586,477 300,000 2,900,018(6)
John F. Mitchell 216,318 186,000 407,733
Edward F. Staiano 20,000 260,000 280,265
James A. Norling 40,632 304,000 345,730
William J. Weisz 379,322 -- 411,382(7)
Erich Bloch 5,000 -- 5,000(8)
David R. Clare 40,232 -- 40,232
Wallace C. Doud 4,682 -- 4,682
H. Laurance Fuller (9) 2,000 -- 2,000
Robert W. Galvin (5) 15,245,741 -- 15,279,740(10)
John T. Hickey 53,525 -- 57,125(11)
Anne P. Jones 3,779 -- 3,779
Donald R. Jones 51,202 50,000 152,404(12)
Judy C. Lewent (13) 0 -- 0
Walter E. Massey 646 -- 646
Thomas J. Murrin 13,000 -- 15,000(14)
John E. Pepper, Jr. 0 -- 1,020(15)
Samuel C. Scott III 4,340 -- 4,340
Gardiner L. Tucker 4,084 -- 4,084
B. Kenneth West 10,000 -- 10,000
John A. White (13) 2,000 -- 2,000
All current directors, nominees and
current executive officers as a group
(33 persons)(16)(17) 17,819,636 2,564,173 20,570,766(18)
<FN>
- --------------------------
(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 and Employee Stock Ownership Plan Trusts and
the shares listed under "Shares Under Exercisable Options."
(2) Includes shares under options exercisable on January 31, 1995 and options
which become exercisable within 60 days thereafter.
(3) Includes interests, if any, in shares held in the Company's Profit Sharing
and Employee Stock Ownership Plan Trusts, which are subject to some
investment restrictions, and the shares listed under "Shares Under
Exercisable Options." Unless otherwise indicated, each person has sole
voting and investment power over the shares reported. Each director, other
than Mr. R. Galvin, owns less than 1% of the Common Stock. Mr. R. Galvin
beneficially owns 2.6% of the Common Stock. All directors, nominees and
current executive officers as a group own 3.5%.
17
(4) Mr. Tooker has shared voting and investment power over 157,326 of these
shares.
(5) As of February 23, 1995.
(6) Mr. C. Galvin has or shares investment and voting power with respect to
these shares as follows: sole voting and investment power, 1,178,098
shares; sole voting power, 199 shares; shared voting and investment power,
1,408,574 shares. Included in Mr. C. Galvin's shares are 1,408,574 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 and
of 13,147 shares owned by his wife which are included for him under "Total
Shares Beneficially Owned."
(7) Mr. Weisz disclaims beneficial ownership of 32,060 shares owned by his wife
which are included for him under "Total Shares Beneficially Owned."
(8) Mr. Bloch has shared voting and investment power over these shares.
(9) As of February 1, 1995.
(10) Mr. R. Galvin has or shares investment and voting power with respect to
these shares as follows: sole voting and investment power, 9,943,446
shares; sole voting power only, 230 shares; sole investment power only,
3,896,268 shares; and shared voting and investment power, 1,408,574 shares.
Included in Mr. R. Galvin's shares are 1,408,574 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."
(11) Mr. Hickey disclaims beneficial ownership of 3,600 shares owned by his wife
which are included for him under "Total Shares Beneficially Owned."
(12) Mr. Jones disclaims beneficial ownership of 51,202 shares held by his wife
which are included for him under "Total Shares Beneficially Owned."
(13) Director Nominee.
(14) Mr. Murrin disclaims beneficial ownership of 2,000 shares held by his wife
as trustee which are included for him under "Total Shares Beneficially
Owned."
(15) Mr. Pepper disclaims beneficial ownership of 670 shares held by his wife,
200 shares held by his son and 150 shares held by his daughter which are
included for him under "Total Shares Beneficially Owned."
(16) As of February 2, 1995.
(17) Each director and officer (as defined) of the Company is required to report
to the Securities and Exchange Commission, by a specified date, his or her
transactions related to Common Stock. During the period January 1, 1994
through December 31, 1994, to the Company's knowledge, all filing
requirements were timely complied with.
(18) All directors, nominees and current executive officers as a group have
shared voting and investment power over 1,636,823 of these shares.
18
PRINCIPAL SHAREHOLDERS
As of December 31, 1994, 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:
NUMBER OF SHARES AND
NAME AND ADDRESS NATURE OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ----------------------------- --------------------------------------- ------------------
FMR Corp. (1) 30,028,776 shares of Common Stock 5.12%
82 Devonshire Street
Boston, MA 02109
<FN>
- --------------------------
(1) As of December 31, 1994, FMR Corp. had sole voting power over 1,524,714
shares of Common Stock and sole dispositive power over 30,014,276 shares of
Common Stock and shared voting and dispositive power over 14,500 shares of
Common Stock.
SUMMARY COMPENSATION TABLE
Furnished below is a summary concerning the compensation awarded and/or paid
to each of the following current executive officers during each of the Company's
last three fiscal years:
ANNUAL COMPENSATION LONG TERM COMPENSATION
---------------------------------------- -----------------------------------------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND COMPENSATION UNDERLYING LTIP COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($)(1) BONUS ($)(2) ($)(3)(4) OPTIONS (#)(5) PAYOUTS ($)(6) ($)(7)(8)
- -------------------- --------- ----------- ------------ ------------- ------------- ----------------- -------------
Gary L. Tooker 1994 900,000 1,080,000 4,780 80,000 N/A* 14,048
Vice Chairman and 1993 770,000 847,000 3,750 76,000 -0- 10,350
Chief Executive 1992 715,000 415,000 5,331 120,000 -0- 5,106
Officer
John F. Mitchell 1994 600,000 720,000 5,897 -0- N/A 15,625
Vice Chairman and 1993 600,000 660,000 5,596 30,000 -0- 13,061
Officer of the Board 1992 600,000 294,000 8,128 40,000 -0- 6,588
Christopher B. 1994 676,667 812,000 1,452 60,000 N/A 9,546
Galvin 1993 515,000 566,500 1,062 54,000 -0- 6,047
President and Chief 1992 472,500 275,000 1,169 80,000 -0- 3,251
Operating Officer
Edward F. Staiano 1994 513,000 750,000 3,669 40,000 N/A 12,470
Executive Vice 1993 479,000 503,800 2,869 36,000 -0- 9,031
President 1992 446,333 218,700 4,380 68,000 -0- 4,470
James A. Norling 1994 513,333 640,000 2,506 40,000 N/A 10,922
Executive Vice 1993 478,333 499,900 1,898 40,000 -0- 7,649
President 1992 441,667 242,900 2,679 80,000 -0- 3,815
<FN>
- ------------------------------
* Not currently available. See footnote (6).
(1) Including amounts deferred pursuant to salary reduction arrangements under
the Motorola Employees' Savings and Profit Sharing Plan ("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.
19
(3) These amounts are the Company's reimbursements for the federal 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.
(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) The amounts shown for options granted in 1993 and 1992 reflect a
two-for-one split of Common Stock in the form of a 100% stock dividend paid
in April, 1994.
(6) No payments were made for 1993 or 1992 under the Long Range Incentive
Program or the Long Range Incentive Plan of 1994. The 1994 payments under
the Long Range Incentive Program are not calculable at this time but are
expected to be very substantial.
(7) These figures for 1994 include the following amounts for the premiums paid
under the term life portion of the split-dollar life insurance: for Mr.
Tooker, $6,537; for Mr. Mitchell, $8,065; for Mr. C. Galvin, $2,094; for
Mr. Staiano, $5,018; and for Mr. Norling, $3,427.
(8) These figures include the following contributions made by the Company to
the Profit Sharing Plan for 1994: for Mr. Tooker, $7,511; for Mr. Mitchell,
$7,560; for Mr. C. Galvin, $7,452; for Mr. Staiano, $7,452; and for Mr.
Norling, $7,495.
STOCK OPTION GRANTS IN 1994
INDIVIDUAL GRANTS
------------------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF (4) AT ASSUMED ANNUAL
SECURITIES RATES OF STOCK PRICE
UNDERLYING APPRECIATION FOR
OPTIONS GRANTED % OF TOTAL OPTIONS EXERCISE OR OPTION TERM
(# OF GRANTED TO BASE PRICE EXPIRATION --------------------------
NAME SHARES)(1)(2) EMPLOYEES IN 1994 ($/SH) DATE (3) 5% ($)(4) 10% ($)(4)
- ---------------------- --------------- ------------------- ----------- ---------- ------------ ------------
Gary L. Tooker 80,000 2.1% $ 57.69 12/22/04 $ 2,902,440 $ 7,355,200
John F. Mitchell -0- 0% -- -- -- --
Christopher B. Galvin 60,000 1.6% $ 57.69 12/22/04 $ 2,176,880 $ 5,516,400
Edward F. Staiano 40,000 1.0% $ 57.69 12/22/04 $ 2,176,880 $ 3,677,600
James A. Norling 40,000 1.0% $ 57.69 12/22/04 $ 2,176,880 $ 3,677,600
<FN>
- --------------------------
(1) These are options granted under the Share Option Plan of 1991 to acquire
shares of Common Stock.
(2) These options were granted at fair market value at the time of the grant,
are generally not exercisable until one year after grant and carry with
them the right to elect to have shares withheld upon exercise and/or to
deliver previously owned shares of Common Stock to satisfy tax withholding
requirements. The options granted in 1994 to these four individuals
represent well less than 0.1% of the shares of Common Stock outstanding.
(3) These options could expire earlier in certain situations.
(4) The potential realizable value of the options, if any, granted in 1994 to
each of these executive officers was calculated by multiplying those
options by the excess of (a) the assumed market value, at December 22,
2004, of Common Stock if the market value of Common Stock were to increase
5% or 10% in each year of the option's 10-year term over (b) the base price
shown. This calculation does not take into account any taxes or other
expenses which might be owed. The assumed market value at a 5% assumed
annual appreciation rate over the 10-year term is $93.97 and such value at
a 10% assumed annual appreciation rate over that term is $149.63. At $93.97
the total market value of the 588,517,254 shares of Common
20
Stock outstanding on March 15, 1995 would be $55,302,966,358, which would
be an increase of $21,351,405,975 from the market value of such shares at
the close of business on December 22, 1994. At $149.63, the total market
value of the 588,517,254 shares of Common Stock outstanding on March 15,
1995 would be $88,059,836,716, which would be an increase of
$54,108,276,333 from the market value of such shares at the close of
business on December 22, 1994. The 5% and 10% appreciation rates are set
forth in the Securities and Exchange Commission rules and no representation
is, of course, made that the Common Stock will appreciate at these assumed
rates or at all.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY (2) OPTIONS
ACQUIRED ON OPTIONS AT END OF 1994 (#) AT END OF 1994 ($)(3)
EXERCISE (# VALUE -------------------------- ----------------------------
NAME OF SHARES) REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------- ------------- ------------- ----------- ------------- ------------- -------------
Gary L. Tooker -0- -0- 424,000 80,000 $ 14,905,680 $ 24,800
John F. Mitchell 40,000 $ 1,635,600 186,000 -0- $ 6,773,920 -0-
Christopher B. Galvin 75,600 $ 2,963,692 300,000 60,000 $ 9,982,320 $ 18,600
Edward F. Staiano -0- -0- 260,000 40,000 $ 8,298,960 $ 12,400
James A. Norling -0- -0- 304,000 40,000 $ 11,176,500 $ 12,400
<FN>
- --------------------------
(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, 1994.
(3) Assuming a stock price of $58.00 per share, which was the closing price of
a share of Common Stock reported for the New York Stock Exchange--Composite
Transactions on December 31, 1994.
LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR
PERFORMANCE OR
OTHER PERIOD ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF UNTIL NON-STOCK PRICE-BASED PLANS (1)(2)(5)
RIGHTS MATURATION OR ----------------------------------------------
NAME (#)(2) PAYOUT THRESHOLD ($)(3) TARGET ($)(4) MAXIMUM ($)
- ---------------------- ------------ -------------- ------------------- ----------- ------------
Gary L. Tooker 1 4 Years $ 1 $ 962,500 $1,925,000
John F. Mitchell 1 4 Years $ 1 $ 750,000 $1,500,000
Christopher B. Galvin 1 4 Years $ 1 $ 643,750 $1,287,500
Edward F. Staiano 1 4 Years $ 1 $ 612,500 $1,225,000
James A. Norling 1 4 Years $ 1 $ 612,500 $1,225,000
<FN>
- --------------------------
(1) All the payments shown are potential assumed amounts. There is no assurance
that Motorola will achieve results that would lead to payments under the
Company's Long Range Incentive Plan of 1994 ("LRIPL") or that any payments
will be made under this plan.
(2) Under the LRIPL, 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
21
assets ("RONA"), shareholder return and sales growth over a four year
period, each weighted at 25%,
compared to a selected competitive 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 (1) 125% of the
executive officer's annualized base salary on January 1 of the first year
of the four year cycle, or (2) 100% of the executive officer's annualized
base salary on December 31 of the last year of the four year cycle. No
payments are made unless the minimum specified RONA floor is exceeded by
Motorola.
(3) At the performance threshold--which is that point at which a payment could
be made under the LRIPL-- each listed current executive officer who
participates in the LRIPL could receive $1 under the LRIPL.
(4) At the performance target--which is that point at which 50% of the maximum
award under the LRIPL would be payable--the indicated payments would be
made under the LRIPL.
(5) These figures were calculated using the annualized base salary in effect on
January 1, 1994 for each participating executive officer.
PENSION AND SUPPLEMENTARY RETIREMENT PLANS
The Company maintains a retirement income plan known as the Motorola, Inc.
Pension Plan (the "Pension Plan"). The Company's general objective is for the
after-tax payments from the Pension Plan and Social Security to provide
non-elected officer employees who have 35 years of service under the present
Pension Plan formula, with approximately 80% to 100% of their final after-tax
salary after their normal retirement. The Company has established a Supplemental
Pension Plan ("Supplemental Plan") for participants in the Pension Plan who are
not elected officers and who receive compensation in excess of the reduced
compensation limit imposed by changes to the Internal Revenue Code (the "Code").
The purpose of the Supplemental Plan is to restore the benefits that otherwise
would have been provided by the Pension Plan if the compensation limit of the
Code had not been reduced.
The Company also maintains a supplementary retirement plan in which elected
officers, including the named executive officers, participate. If the benefit
payable annually (computed on a single life annuity basis) to any named
executive 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 at age 60 or later. The total annual payments to such officer
from both plans will, generally, 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, as
disclosed in the Summary Compensation Table on page 19. 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
22
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.
Based on salary levels at January 1, 1995, 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: Mr. Tooker, $636,636;
Mr. C. Galvin, $490,000; Mr. Mitchell, $440,379; Mr. Staiano, $368,625; and Mr.
Norling, $367,739.
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 solely 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.
23
THE FOLLOWING GRAPH AND RELATED DISCLOSURE AND THE REPORT OF COMPENSATION
COMMITTEE ON EXECUTIVE COMPENSATION 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.
PERFORMANCE GRAPH
The following graph compares the cumulative total return of Motorola, Inc.,
the S&P 500 Index and a composite S&P Electronic Subgroups Index composed of the
following six S&P indices, weighted by market value at each measurement point:
the S&P Communications-Equipment/ Manufacturers Index, the S&P Computer Systems
Index, the S&P Electrical Equipment Index, the S&P Electronics Defense Index,
the S&P Electronics (Instrumentation) Index, and the S&P Electronics
(Semiconductors) Index. The S&P Communications-Equipment/Manufacturers Index
currently consists of Andrew Corporation, DSC Communications Corp., M/A-Com
Inc., Northern Telecom Limited and Scientific-Atlanta, Inc. The S&P Computer
Systems Index currently consists of Amdahl Corporation, Apple Computer, Inc.,
Compaq Computer Corporation, Control Data Corporation, Cray Research, Inc., Data
General Corp., Digital Equipment Corp., Intergraph Corp., International Business
Machines Corporation, Tandem Computers, Inc., Unisys Corporation and Wang
Laboratories, Inc. "B". The S&P Electrical Equipment Index currently consists of
AMP Inc., Emerson Electric Co., General Electric Company, W.W. Grainger, Inc.,
Honeywell Inc., Raychem Corp., Thomas & Betts Corp. and Westinghouse Electric
Corporation. The S&P Electronics Defense Index currently consists of EG&G, Inc.,
E-Systems, Inc. and Loral Corporation. The S&P Electronics (Instrumentation)
Index currently consists of Hewlett-Packard Co., Perkin-Elmer Corp. and
Tektronix, Inc. The S&P Electronics (Semiconductors) Index currently consists of
Advanced Micro Devices, Inc., Intel Corporation, Motorola, Inc., National
Semiconductor Corp. and Texas Instruments Incorporated. These assume $100 was
invested in the stock or the Index on December 31, 1989 and also assume the
reinvestment of dividends.
24
FIVE YEAR CUMULATIVE TOTAL RETURN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
MOTOROLA S&P 500 SUB-GROUPS
1989 100.00 100.00 100.00
1990 91.02 96.90 99.30
1991 114.71 126.55 114.49
1992 185.05 136.04 119.07
1993 328.29 149.78 141.70
1994 414.69 151.75 158.77
25
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
OBJECTIVES OF EXECUTIVE COMPENSATION PROGRAM
The objective of Motorola's executive compensation program is to attract and
retain key executives critical to the long-term success of the Company. It is
designed to align compensation with business strategy and success, and with
Company values. This means having an integrated executive compensation program
that is intended to balance short-term performance with the achievement of
long-range strategic goals and that is designed to result in continuously
improving total shareholder value. The program rewards executives not only for
achieving Company goals, but also in relationship to the Company's performance
compared to peer industry company performance.
The compensation committee of the Board of Directors met seven times in
1994. It discussed and reviewed in detail the compensation for the members of
the Chief Executive Office (the "CEO"), currently Gary L. Tooker and Christopher
B. Galvin, and the 13 other most-senior executives and recommended to the Board
of Directors for its approval changes in compensation for those 15 executives.
It reviews and approves compensation changes for all elected officers that are
proposed by the CEO.
SUMMARY OF COMPENSATION PLANS
For many years, Motorola has participated in a number of compensation
surveys for all job categories, exempt and non-exempt, which it believes can be
"benchmarked." One of these surveys is a "consolidated industries" report on the
compensation for executive job categories in what are currently 335 companies,
of which 22 are in the S&P Electronic Subgroups Index shown on pages 24 and 25.
Another survey is a report on the compensation for executive job categories in
what are currently 38 "high tech" and major industrial companies, selected for
their being in some of the same general lines of business as the Company or as
being viewed as generally important to the overall high tech industry. This
"high tech" survey includes 16 of the companies in the S&P Electronic Subgroups
Index shown in the graph on pages 24 and 25. Because Motorola intends to attract
and retain substantially above-average executives, the determination of base
salaries includes a factor that raises salary range midpoints approximately 10%
above the salary levels projected using the "consolidated industries" report, as
appropriately adjusted to reflect any higher compensation for positions
indicated in the "high tech" survey, on the basis of the Company's size and
organization level (determined using regression analysis) for directly
comparable and equivalent jobs. Where Company positions are broader or narrower
than other comparable positions in other companies, appropriate judgmental
adjustments are made to recognize these differences. Where Company positions are
not comparable to others studied, the Company positions are assigned salary
ranges which provide relative equity in relation to other Motorola positions.
Using this method, salary grades for each elected officer position (including
the CEO, discussed below) in the Company are developed for, and approved by, the
compensation committee.
26
It is also the Company's general intention that, where allowed by law and
local custom, all its employees should have the opportunity to increase their
base compensation by participating in one or more incentive compensation plans,
where the payments are based on Company, unit, team, or individual performance.
In addition to a number of localized incentive programs, such as
salespersons' commissions, Motorola has four major incentive compensation
programs in operation. All four of these relate in one way or another to Company
performance and in most cases, to sector, group, division or team performance.
1. The first such program is the RONA (Return On Net Assets employed)
Incentive Program. This is generally available to eligible employees who are
not participating in the Motorola Executive Incentive Plan and is an
outgrowth of the Company's Participative Management Process. Participants in
the second half of 1994 numbered approximately 117,000. RONA awards are
earned and paid semi-annually to participants and depend, first, on the
Company and, in most cases, the major business unit for which the
participant works, exceeding a minimum RONA percentage (as determined by the
Company) during the six-month period and, second, the extent to which such
minimum percentage was exceeded. RONA combines profit after tax with more
efficient utilization of assets to help achieve sales growth. The RONA
percentage is calculated as:
Profit After Sales Profit After
Tax X -------------- = Tax
- -------------- --------------
Sales Net Assets Net Assets
2. The second such program is the Motorola Executive Incentive Plan
(MEIP). This is participated in by elected and appointed officers (including
the named executive officers) and employees at certain levels of management
and by specific professionals who are deemed individual contributors.
Participants in 1994 numbered 776. MEIP awards are generally earned and paid
annually and are determined and awarded as a percentage of the participant's
base salary earnings. For each year, a percentage, not to exceed seven
percent, of the Company's consolidated net earnings (as determined under the
MEIP, but generally on a pre-tax basis after specified deductions) for that
year which remains after deducting an amount equal to five percent of
average capital employed (as determined under the MEIP) is added to the
reserve available for payment of MEIP awards. Amounts were added to the
reserve for 1994. 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 amounts awarded
under the MEIP cannot exceed the amount reserved.
3. The third such program is the Long Range Incentive Plan of 1994
(LRIPL), which for the cycle that began with 1994 is participated in to
varying degrees by 33 of the Company's elected officers (including the named
executive officers) and which shareholders approved in 1994. The LRIPL award
is determined by the Company's RONA, 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 compensation
committee (the "comparator
27
group index"). The comparator group index is a group of what is now thirteen
companies, generally in one or more of the same lines of the business as the
Company, and believed by the compensation committee to be appropriate for
measuring comparative performance on the basis of the factors in the LRIPL
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. Additionally the award is determined, in
part, by the Company's fundable growth.
The LRIPL or a predecessor plan has been in effect in fourteen
succeeding four-year cycles, the first of which began in 1982. Under the
most recent predecessor plan, the Long Range Incentive Program ("LRIPR"), no
payments have been made since its inception because the Company's RONA
performance had not previously exceeded the RONA floor set in the LRIPR.
This was the case before 1994 even though in the previous four completed
four-year cycles the Company's financial performance (as measured by LRIPR)
exceeded the comparator group index. For the four year cycle ending with
1994, the RONA floor set in the LRIPR was exceeded by the Company and very
substantial payments are expected.
4. The last such program is the Share Option Plans. The Share Option
Plans are participated in by a wide range of managerial and individual
contributors. Recipients of Share Options in 1994 numbered approximately
7,300. There are approximately 8,700 total current Share Option holders.
Share Options are typically awarded annually to encourage optionees to own
Common Stock, thus aligning their own personal financial worth to the
Company s share price growth. They are granted with option prices at the
then-market price in quantities as low as 40 shares to mid-range and lower
level Company employees, and in substantially higher numbers to senior
managers. The final worth of Share Options depends wholly on the increase in
the value of the Common Stock, which, over time, reflects the Company's
performance, as viewed by the market.
Beginning with the Share Option grant in December, 1993, the Company
established higher minimum stock ownership level guidelines for executive
officers, including the CEO. Under those guidelines, if a CEO member does not
own shares of Common Stock representing four times his base salary and if other
executive officers do not own shares of Common Stock representing three times
their base salaries, then he must retain fifty percent of the shares that remain
from any exercise of the December, 1993 Share Option grant and any future Share
Option grants, including the 1994 Share Option grant (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 does not actually
surrender shares) until the minimum stock ownership level is reached.
Additionally, these new guidelines set a minimum stock ownership level of 5,000
shares of Common Stock for all other elected officers and 1,000 shares of Common
Stock for all appointed vice-presidents. 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 Share Option
granted after June 30, 1994, or after the date he or she becomes an elected
officer or appointed vice-president if later, respectively, and from any future
Share Option grants, after deducting the number of shares of
28
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 four 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 the RONA Incentive Program or under the
MEIP or LRIPR.
CHIEF EXECUTIVE OFFICE COMPENSATION
The compensation for the CEO members consists of base salary, annual MEIP
award eligibility, LRIPR and LRIPL award eligibility, Share Options, and certain
other benefits. In addition to the studies mentioned earlier, a special Chief
Executive Officer and Chief Operating Officer ("COO") compensation study is
conducted periodically for the compensation committee of 34 major industrial
companies, 17 of which are in the S&P Electronic Subgroups Index shown in the
graph on pages 24/25 and 29 of which are included in "high tech" industry survey
discussed on page 26. This study uses regression analysis techniques, which
relate Motorola's size to these other companies' size to approximate the
appropriate base salary, other components of compensation and the total
compensation levels which should be paid for the CEO members, before taking into
account the financial and non-financial strategic performance of the Company and
the individual performance of the CEO members. In determining the CEO members'
base salaries, the compensation committee considers the results of these studies
and the salary range midpoints that are approximately 10% above salary levels
projected on the basis of the Company's size, together with the Company's
performance on its own financial and non-financial strategic goals and the
individual performance of the CEO members. No particular weight was given to any
one of these goals in setting base salaries for the CEO members. The competitive
studies give the committee a base from which to modify salary and/or incentive
compensation based upon performance. Salaries of other executive officers are
related to the CEO members' compensation and to competitive conditions in the
industry. The compensation committee reviews, and recommends for approval to the
Board of Directors, the base salaries for the CEO members as well as for the
members of the Company's internal management committee (generally, all the
executive officers). The compensation committee also reviews and fixes the
compensation for all of the Company's elected officers.
CEO BASE SALARY
The CEO members' base salaries for 1994 were primarily determined as a
result of the studies and survey data referred to above and the increased
responsibilities resulting from their promotions in late 1993, although some
consideration was given to their leadership performance and their performance on
other subjective performance factors described below. In recognition of Chris
Galvin's increased responsibilities, his salary was increased in May 1994 to
$700,000, a level which the compensation committee deemed to be a more
appropriate relationship to the salary of the
29
CEO. Based on their leadership performance and their performance on other
subjective performance factors described below, the base salaries of Gary L.
Tooker and Chris Galvin were reviewed and, as of January 1, 1995, were increased
to $990,000 and $770,000 respectively.
CEO ANNUAL MEIP
For the MEIP award paid in 1994 for 1993 performance, 25% of the MEIP bonus
was based on the Return on Net Assets (RONA) employed by the Company, which was
better than in 1992, and 25% was based on the successful achievement of other
financial goals. The other half was based on the evaluation of performance
against various goals associated with the Company's five key strategic
initiatives: Six sigma quality; Total cycle time reduction; Product,
manufacturing and environmental leadership; Profit improvement; and Empowerment
for all in a participative, cooperative, and creative workplace. As a result of
the Company's performance in 1993, the compensation committee determined that an
increased MEIP award was warranted and granted an MEIP award of 110% of each
individual's 1993 base salary to the CEO members.
For the MEIP award paid in 1995 for 1994 performance, 25% of the MEIP bonus
was again based on the RONA employed by the Company, which was better than in
1993, and 25% was based on earnings per share improvement and on the
profitability and market share levels of various business units, which were
generally achieved. The other half was based on the achievement of people goals,
such as objective minority and women parity goals and subjective goals related
to identifying and training future leaders, globalization goals, such as sales
growth and initiatives in specific countries and regions, customer satisfaction
and quality goals in business units, new growth platforms goals, cycle time
goals and technology goals. These other goals were also generally achieved.
After the end of 1994, and in line with recent competitive survey information,
the compensation committee established, for CEO members, a target annual MEIP
award of 70% of base salary, with a maximum of 140%. As a result of the
Company's performance for 1994, the CEO members' role in achieving progress in
both the quantifiable (essentially economic) and non-quantifiable (judgmental)
goals and their fine performance during the transition period after the previous
CEO left the Company, the compensation committee determined that a MEIP award
was warranted and granted an award of 120% of each individual's 1994 base salary
to the CEO members.
CEO SHARE OPTIONS
Share Options for 80,000 shares of Common Stock at the market price on the
grant date were awarded in December, 1994 to Gary L. Tooker as part of the
Company's annual option program. Share Options for 60,000 shares were similarly
awarded to Christopher B. Galvin. This level of option awards was made using the
committee's judgment. In making these grants, the committee referred to the
options granted and exercised by these CEO members from 1985 to 1994 and their
stock ownership as of October, 1994.
CEO LRIPR
No award was earned under the LRIPR for the four-year period ending with
1992 or 1993, even though the Company's RONA performance was better than the
comparator group index, because the minimum corporate four-year RONA percentage
required to be met for payment to be made
30
under the LRIPR was not met. Data is not yet available to compute the comparator
group index for 1994. The awards earned under the LRIPR for the four-year period
ending with 1994 cannot be calculated until the data necessary to compute the
comparator group index is made public by all of the companies reflected in the
index. The minimum corporate four-year RONA percentage required to be met for
payment under LRIPR was met and awards for the four-year period ending with 1994
are expected to be very substantial.
GENERAL
Overall, the compensation committee believes that the CEO members are being
appropriately compensated in a manner that relates to performance and in the
stockholders' long-term interests.
Respectfully submitted,
David R. Clare, Chairman
Thomas J. Murrin
Samuel C. Scott III
31
PROPOSAL TO ADOPT THE NON-EMPLOYEE DIRECTORS' STOCK PLAN
The Board of Directors recommends that the stockholders approve the adoption
of the Non-Employee Directors' Stock Plan (the "Plan").
If approved by the stockholders, members of the Board of Directors of the
Company (the "Board") who are not employees of the Company may elect to receive
all or part of the cash compensation they receive for services as a director
(including the annual retainer fee and any fees payable for services on the
Board or any committee thereof) in the form of Common Stock.
The purpose of the Plan is to advance the interests of the Company by
enabling members of the Board to receive shares of Common Stock in lieu of cash
compensation. The principal features of the Plan are summarized below, with the
summary being qualified in its entirety by reference to the terms of the Plan
itself as set forth in Exhibit A hereto.
Each member of the Board who is not a regular employee of the Company will
be eligible to participate in the Plan. A non-employee director shall make his
or her election at least six months prior to the end of the first calendar
quarter with respect to which such election is to apply. The shares of Common
Stock will be issued to such director promptly after the end of each calendar
quarter with respect to such election and the number of shares of Common Stock
received will be equal to the amount of compensation divided by the average of
the high and low prices per share of Common Stock reported for the New York
Stock Exchange - Composite Transactions on the last business day of such
calendar quarter. No fractional shares will be issued.
The maximum number of shares of Common Stock that may be purchased under the
Plan shall be 100,000; provided, however, that the number, rights and privileges
of the shares issuable under the Plan shall be increased, decreased or changed
if the Company shall increase or decrease the number of its outstanding shares
of Common Stock or change in any way the rights and privileges of such shares.
APPROVAL BY STOCKHOLDERS
In order to be adopted, the Non-Employee Directors' Stock Plan must be
approved by the affirmative vote of a majority of the outstanding shares of
Common Stock represented at the meeting and entitled to vote. Abstentions will
count as votes against this proposal, but broker non-votes will not count as
being entitled to vote on this proposal at the meeting and, therefore, will not
be taken into account for this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE NON-
EMPLOYEE DIRECTORS' STOCK PLAN. UNLESS INDICATED OTHERWISE ON THE PROXY, THE
SHARES WILL BE VOTED FOR ADOPTION OF THE NON-EMPLOYEE DIRECTORS' STOCK PLAN.
32
MISCELLANEOUS
OTHER MATTERS
The Board of Directors of the Company knows of no other business to be
transacted at the annual meeting of stockholders, but if any other matters do
come before the meeting, it is the intention of the persons named in the
accompanying proxy to vote or act with respect to them in accordance with their
best judgment.
MANNER AND COST OF PROXY SOLICITATION
The cost of solicitation of proxies will be borne by the Company. In
addition to the solicitation of proxies by use of the mails, officers, directors
and regular employees of the Company, acting on its behalf, may solicit proxies
by telephone, telegraph or personal interview. Also, the Company has retained D.
F. King & Co., Inc. to aid in the solicitation of proxies for which the Company
will pay an estimated fee of $13,500, plus expenses. The Company will, at its
expense, request brokers and other custodians, nominees and fiduciaries to
forward proxy soliciting material to the beneficial owners of shares held of
record by such persons.
PROPOSALS
Proposals of stockholders intended to be presented at the Company's 1996
annual meeting of stockholders must be received at the Company's principal
executive offices not later than November 22, 1995.
The nominating committee will consider nominees recommended by stockholders
as candidates for election to the Board of Directors at the annual meeting of
stockholders. A stockholder wishing to nominate a candidate for election to the
Board is required to give written notice to the Secretary of the Company of his
or her intention to make such a nomination. The notice of nomination must be
received by the Company not less than 60 days nor more than 90 days prior to the
first anniversary of the preceding year's annual meeting of stockholders;
provided, however, that in the event that the date of the annual meeting is more
than 30 days prior to or more than 60 days after such anniversary date, notice
must be received not less than 60 days or more than 90 days prior to such annual
meeting or within 10 days after the meeting date is announced. The notice of
nomination is required to contain certain information about both the nominee and
the stockholder making the nomination. A nomination which does not comply with
the above procedure will be disregarded.
Such proposals or nominations should be addressed to Richard H. Weise,
Secretary, Motorola, Inc., 1303 East Algonquin Road, Schaumburg, Illinois 60196.
By order of the Board of Directors
Richard H. Weise
SECRETARY
33
EXHIBIT A
MOTOROLA, INC.
NON-EMPLOYEE DIRECTORS' STOCK PLAN
1. PURPOSE. The purpose of the Motorola, Inc. Non-Employee Directors'
Stock Plan (the "Plan") is to advance the interests of Motorola, Inc. (the
"Company") and its stockholders by enabling members of the Board of Directors of
the Company (the "Board") who are not employees of the Company or any of its
Subsidiaries to receive shares of the Company's common stock, par value $3 per
share, ("Common Stock"), which Common Stock may be either authorized but
unissued or treasury shares, in lieu of all or a portion of the compensation
they receive for membership on the Board and committees thereof.
2. ADMINISTRATION. The Plan shall be administered by the Compensation
Committee of the Board (the "Committee"). The Committee shall, subject to the
provisions of the Plan, have the power to construe the Plan, to determine all
questions arising thereunder and to adopt and amend such rules and regulations
for the administration of the Plan as it may deem desirable. Any decisions of
the Committee in the administration of the Plan, as described herein, shall be
final and conclusive. The Committee may authorize any one or more of its members
or the secretary of the Committee or any officer, appointed vice president or
employee of the Company to execute and deliver documents on behalf of the
Committee. No member of the Committee shall be liable for anything done or
omitted to be done by him or her or by any other member of the Committee in
connection with the Plan, except for his or her own willful misconduct or as
expressly provided by statute.
3. PARTICIPATION. Each member of the Board who is not a regular employee
of the Company or any of its Subsidiaries (a "Non-Employee Director") shall be
eligible to participate in the Plan. As used herein, the term "Subsidiary" means
any partnership, corporation, association, limited liability company, joint
stock company, trust, joint venture, unincorporated organization or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by the Company or
one or more of the other Subsidiaries of the Company or a combination thereof,
or (ii) if a partnership, association, limited liability company, joint stock
company, trust, joint venture, unincorporated organization or other business
entity, a majority of the partnership or other similar ownership interest
thereof is at the time owned or controlled, directly or indirectly, by the
Company or one or more Subsidiaries of the Company or a combination thereof. For
purposes hereof, the Company or a Subsidiary shall be deemed to have a majority
ownership interest in a partnership, association, limited liability company,
joint stock company, trust, joint venture, unincorporated organization or other
business entity if the Company or such Subsidiary shall be allocated a majority
of partnership, association, limited liability company, joint stock company,
trust, joint venture, unincorporated organization or other business entity gains
or losses or shall be or control
A-1
the managing director, the trustee, a manager or a general partner of such
partnership, association, limited liability company, joint stock company, trust,
joint venture, unincorporated organization or other business entity.
4. ELECTION TO RECEIVE COMMON STOCK IN LIEU OF CASH COMPENSATION. A
Non-Employee Director may elect to reduce all or part of the cash compensation
otherwise payable for services to be rendered by him or her as a director
(including the annual retainer fee and any fees payable for services on the
Board or any committee thereof) and to receive in lieu thereof shares of Common
Stock. Any such election (a) shall be in writing, (b) shall specify an amount of
such compensation to be received in the form of Common Stock (expressed as a
percentage of the compensation otherwise payable in cash, as an amount in
dollars of compensation otherwise payable in cash or as a type of fee (e.g.,
retainer fee) otherwise payable in cash), (c) shall be made at least six months
prior to the end of the first calendar quarter with respect to which such
election is to apply and (d) may not be revoked or changed thereafter except as
to compensation for services rendered at least six months after any such
election to revoke or change is made in writing. Any such election shall
continue in effect until six months after an election to revoke or change such
election is made in writing.
5. ISSUANCE OF COMMON STOCK. If a Non-Employee Director elects pursuant to
Paragraph 4 above to receive Common Stock, there shall be issued to such
director promptly after the end of each calendar quarter with respect to which
such election applies a number of shares of Common Stock equal to the amount of
such compensation divided by the average of the high and low prices per share of
Common Stock reported for the New York Stock Exchange - Composite Transactions
on the last business day of the calendar quarter for which the compensation
would have been paid in cash in the absence of such election; provided, however,
if the New York Stock Exchange is not open for trading on such business day or
if Common Stock does not trade on such business day, the average of the high and
low prices for the last day of such calendar quarter on which Common Stock did
so trade shall be used. To the extent that the application of the foregoing
formula would result in fractional shares of Common Stock being issuable, cash
will be paid to the Non-Employee Director in lieu of such fractional shares
based upon the value established pursuant to such formula.
6. NUMBER OF SHARES OF COMMON STOCK ISSUABLE UNDER THE PLAN. The maximum
number of shares of Common Stock that may be purchased under the Plan shall be
100,000; provided, however, that if the Company shall at any time increase or
decrease the number of its outstanding shares of Common Stock or change in any
way the rights and privileges of such shares by means of a payment of a stock
dividend or any other distribution upon such shares payable in Common Stock, or
through a stock split, reverse stock split, subdivision, consolidation,
combination, reclassification or recapitalization involving Common Stock, then
the numbers, rights and privileges of the shares issuable under the Plan shall
be increased, decreased or changed in like manner.
7. MISCELLANEOUS PROVISIONS.
(a) Neither the Plan nor any action taken hereunder shall be construed
as giving any Non-Employee Director any right to be retained in the service
of the Company.
A-2
(b) A participant's rights and interest under the Plan may not be
assigned or transferred, hypothecated or encumbered in whole or in part
either directly or by operation of law or otherwise (except in the event of
a participant's death, by will or the laws of descent and distribution),
including, but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner, and no such right or
interest of any participant in the Plan shall be subject to any obligation
or liability of such participant.
(c) No shares of Common Stock shall be issued hereunder unless counsel
for the Company shall be satisfied that such issuance will be in compliance
with applicable federal, state, local and foreign securities, securities
exchange and other applicable laws and requirements.
(d) It shall be a condition to the obligation of the Company to issue
shares of Common Stock hereunder, that the participant pay to the Company,
upon its demand, such amount as may be requested by the Company for the
purpose of satisfying any liability to withhold federal, state, local or
foreign income or other taxes. If the amount requested is not paid, the
Company shall have no obligation to issue, and the participant shall have no
right to receive, shares of Common Stock.
(e) The expenses of the Plan shall be borne by the Company.
(f) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the issuance of shares hereunder.
(g) By accepting any Common Stock hereunder or other benefit under the
Plan, each participant and each person claiming under or through him or her
shall be conclusively deemed to have indicated his or her acceptance and
ratification of, and consent to, any action taken under the Plan by the
Company or the Committee.
(h) The appropriate officers of the Company shall cause to be filed any
registration statement required by the Securities Act of 1933, as amended,
and any reports, returns or other information regarding any shares of Common
Stock issued pursuant hereto as may be required by Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
other applicable statute, rule or regulation.
(i) The provisions of this Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
(j) Pending issuance of shares of Common Stock hereunder, all
compensation earned by a Non-Employee Director with respect to which an
election to receive Common Stock pursuant to Paragraph 4 above has been made
shall be the property of such director and shall be paid to him or her in
cash in the event that shares of Common Stock are not issued.
(k) Headings are given to the sections of this Plan solely as a
convenience to facilitate reference. Such headings, numbering and
paragraphing shall not in any case be deemed in
A-3
any way material or relevant to the construction of this Plan or any
provisions thereof. The use of the singular shall also include within its
meaning the plural, where appropriate, and vice versa.
8. AMENDMENT. The Plan may be amended at any time and from time to time by
resolution of the Board as the Board shall deem advisable; provided, however,
that no amendment shall become effective without stockholder approval if such
stockholder approval is required by law, rule or regulation, and provided
further, to the extent required by Rule 16b-3 under Section 16 of the Exchange
Act, in effect from time to time, Plan provisions shall not be amended more than
once every six months, except that the foregoing shall not preclude any
amendment to comport with changes in the Internal Revenue Code of 1986, the
Employee Retirement Income Security Act of 1974 or the rules thereunder in
effect from time to time. No amendment of the Plan shall materially and
adversely affect any right of any participant with respect to any shares of
Common Stock theretofore issued without such participant's written consent.
9. TERMINATION. This Plan shall terminate upon the earlier of the
following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating the Plan;
or
(b) ten years from the date the Plan is initially approved and adopted
by the stockholders of the Company in accordance with Paragraph 10 below.
No termination of the Plan shall materially and adversely affect any of the
rights or obligations of any person without his or her consent with respect to
any shares of Common Stock theretofore earned and issuable under the Plan.
10. STOCKHOLDER APPROVAL AND ADOPTION. The Plan shall be submitted to the
stockholders of the Company for their approval and adoption at the meeting of
stockholders of the Company to be held on May 2, 1995. The Plan shall not be
effective unless and until the Plan has been so approved and adopted. The
stockholders shall be deemed to have approved and adopted the Plan only if it is
approved and adopted at a meeting of the stockholders duly held on that date (or
any adjournment of said meeting occurring subsequent to such date) by vote taken
in the manner required by the laws of the State of Delaware.
A-4
APPENDIX
GRAPHIC IMAGE NARRATIVE
DESCRIPTION
1. Picture approximately 1" by 1 1/4" 1. A picture approximately 1" by 1
in size of each director 1/4" in size of each director is
located to the left of each director's
name at the beginning of each
director's biographical description on
pages 3 to 12 of the proxy statement.
2. Signature of Richard H. Weise 2. The facsimile signature of
Richard H. Weise is set forth above
his name in the Notice to
Stockholders, Notice to
Plan Participants, and on page 33 of
the proxy statement.
[LOGO]
- --------------------------------------------------------------------------------
PRINCIPAL EXECUTIVE OFFICES:
1303 East Algonquin Road
Schaumburg, Illinois 60196
- --------------------------------------------------------------------------------
TO THE PARTICIPANTS OF THE MOTOROLA EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
AND THE MOTOROLA EMPLOYEE STOCK OWNERSHIP PLAN (THE "PLANS"):
This Notice of Annual Meeting and the accompanying Proxy Statement are being
sent to you because you are the beneficial owner of Motorola stock by reason of
being a participant in either or both of the Plans. The trustees of the Plans
are the record owners of such stock and are entitled to vote at the meeting.
However, you have the right to direct how the trustees of the Plans will vote
the shares allocated to your accounts in the Plans. YOU ARE REQUESTED TO VOTE,
DATE, SIGN AND MAIL THE VOTING INSTRUCTION FORM ENCLOSED HEREWITH so that it
will be received by April 20, 1995. Your presence at the meeting is not required
to enable you to vote your shares.
Notice is hereby given that the annual meeting of stockholders of Motorola,
Inc. (the "Company" or "Motorola"), a Delaware corporation, will be held in the
Auditorium at the Company's Galvin Center, 1297 East Algonquin Road, Schaumburg,
Illinois on Tuesday, May 2, 1995 at 5:00 P. M., local time, for the following
purposes:
1. To elect directors for the ensuing year;
2. To consider and vote upon the Non-Employee Directors' Stock Plan; and
3. To transact such other business as may properly come before the meeting.
A report on the meeting, which will include the Chairman's remarks, will be
mailed to you after the meeting.
By order of the Board of Directors
Richard H. Weise
SECRETARY
March 21, 1995
IMPORTANT
IN ORDER THAT THERE MAY BE A PROPER REPRESENTATION AT THE MEETING, YOU ARE
REQUESTED TO SEND IN YOUR VOTING INSTRUCTION FORM IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, MAY 2, 1995 [LOGO]
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Gary L. Tooker, Carl F. Koenemann, Garth L.
Milne and Kenneth J. Johnson, and each of them, as the undersigned's Proxies
(with power of substitution) to represent and to vote all the shares of common
stock of Motorola, Inc., which the undersigned would be entitled to vote, at the
annual meeting of stockholders of Motorola, Inc. to be held May 2, 1995 and at
any adjournments thereof, subject to the directions indicated on the reverse
side hereof.
In their discretion, the Proxies are authorized to vote upon any other
matter that may properly come before the meeting or any adjournments thereof.
P
Date: _____________, 1995
R
__________________________ SIGNATURE
X
__________________________ SIGNATURE
Y
Please vote, date, sign and mail promptly this proxy in the enclosed envelope.
When there is more than one owner, each should sign. When signing as an
attorney, administrator, executor, guardian or trustee, please add your title as
such. If executed by a corporation, the full corporation name should be given,
and this proxy should be signed by a duly authorized officer, showing his or her
title.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED BELOW AND FOR
PROPOSAL 2.
1. Election of Directors
/ / FOR all nominees / / WITHHOLD AUTHORITY to vote / / FOR all nominees listed below
listed below for all nominees listed below (except as marked to the contrary
below)
________________________________________________________________________________
D. Clare, H. Fuller, C. Galvin, R. Galvin, J. Hickey, A. Jones, D. Jones, J.
Lewent, W. Massey, J. Mitchell, T. Murrin, J. Pepper, Jr., S. Scott III, G.
Tooker, G. Tucker, W. Weisz, B. West, J. White.
Instruction: to withhold authority to vote for any individual nominee, write
that nominee's name here: ______________________________________________________
2. Adoption of the Non-Employee Directors' Stock Plan
/ / FOR / / AGAINST / / ABSTAIN
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH SPECIFICATIONS MADE, BUT IF NO
CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED ABOVE
AND FOR PROPOSAL 2.
IMPORTANT--THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
VOTING INSTRUCTION FORM [LOGO]
ANNUAL MEETING OF STOCKHOLDERS, MAY 2, 1995
The undersigned hereby directs that, at the annual meeting of stockholders
of Motorola, Inc. to be held May 2, 1995 and at any adjournments thereof, the
shares of Motorola, Inc. common stock credited as of March 15, 1995 to the
undersigned's account(s) in either or both of the Motorola Employees' Savings
and Profit Sharing Plan (the "Profit Sharing Plan") or the Motorola Employee
Stock Ownership Plan (the "ESOP") shall be voted, pursuant to a proxy solicited
by the Board of Directors of Motorola, Inc., by The Northern Trust Company as
Trustee of the Profit Sharing Plan and by Harris Trust and Savings Bank as
Trustee of the ESOP, or their attorneys-in-fact, as specified on the reverse
side hereof.
Please Sign
____________________________________
Signature of Plan Participant
Date: _____________, 1995
Please vote, date, sign and mail promptly in the enclosed envelope.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED BELOW AND FOR
PROPOSAL 2.
1. ELECTION OF DIRECTORS
/ / FOR all nominees / / WITHHOLD AUTHORITY to vote / / FOR all nominees listed below
listed below for all nominees listed below (except as marked to the contrary
below)
________________________________________________________________________________
D. Clare, H. Fuller, C. Galvin, R. Galvin, J. Hickey, A. Jones, D. Jones, J.
Lewent, W. Massey, J. Mitchell, T. Murrin, J. Pepper, Jr., S. Scott III, G.
Tooker, G. Tucker, W. Weisz, B. West, J. White.
Instruction: to withhold authority to vote for any individual nominee, write
that nominee's name here: ______________________________________________________
2. ADOPTION OF THE NON-EMPLOYEE DIRECTORS' STOCK PLAN
/ / FOR / / AGAINST / / ABSTAIN
IMPORTANT--THIS FORM MUST BE SIGNED AND DATED ON THE REVERSE SIDE.