PROPOSAL 1
ELECTION OF DIRECTORS FOR A ONE-YEAR TERM
The term of office of all present directors of the Company will expire
on the day of the 2003 Annual Meeting upon the election of their successors. The
number of directors of the Company to be elected at the 2003 Annual Meeting is
13. The directors elected at the 2003 Annual Meeting will serve until their
respective successors are elected and qualified or until their earlier death or
resignation.
NOMINEES
Each of the nominees named below is currently a director of the Company
and each was elected at the Annual Meeting of stockholders held on May 6, 2002,
except for Ms. Nooyi and Mr. Zafirovski who are standing for election for the
first time. Anne P. Jones is retiring from the Board and will not be standing
for re-election. Ms. Jones is expected to enter into a consulting agreement with
the Company following her retirement. The consulting arrangement will enable the
Board and the Company to continue to benefit from Ms. Jones knowledge of the
Company and expertise as the need arises.
If any of the nominees named below is not available to serve as a
director at the time of the 2003 Annual Meeting (an event which the Board does
not now anticipate), the proxies will be voted for the election as director of
such other person or persons as the Board may designate, unless the Board, in
its discretion, reduces the number of directors. The ages shown are as of
December 31, 2002.
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[[Image Removed: PHOTO]] CHRISTOPHER B. GALVIN, Principal Occupation: Chairman of the Board
and Chief Executive Officer, Motorola, Inc.
Director since 1988 Age-52
Mr. Galvin began working for the Company in 1967 and he served in
sales, sales management, marketing, product management, service
management and general management positions in the Company's
various businesses. He served as President and Chief Operating
Officer from 1993 until he became Chief Executive Officer on
January 1, 1997. In June 1999, Mr. Galvin became Chairman of the
Board. Mr. Galvin received a bachelor's degree from Northwestern
University and a master's degree from the Kellogg Graduate School
of Management at Northwestern University.
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[[Image Removed: PHOTO]] FRANCESCO CAIO, Principal Occupation: Chief Executive Officer,
Netscalibur
Director since 2000 Age-45
Mr. Caio is the Chief Executive Officer of Netscalibur, a
pan-European IP services provider. Mr. Caio is also a member of
the Board of Merloni Elettrodomestici, where he was Chief
Executive Officer from 1997 to 2000. Merloni Elettrodomestici is
the third-largest manufacturer of domestic appliances in Europe.
Mr. Caio obtained his Masters degree in Computer Science from the
Politecnico di Milano and his MBA as a Luca Braito Scholar from
INSEAD at Fountainbleau, France. Mr. Caio is a citizen of Italy.
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[[Image Removed: PHOTO]] H. LAURANCE FULLER, Principal Occupation: Retired; Formerly
Co-Chairman of the Board, BP Amoco, p.l.c.
Director since 1994 Age-64
Mr. Fuller retired as Co-Chairman of BP Amoco, p.l.c., an energy
company, in March 2000. Prior to holding that position, he had
served as Chairman and Chief Executive Officer of Amoco
Corporation since 1991. He is also a director of Abbott
Laboratories, J.P. Morgan Chase & Co. and Cabot Microelectronics
Corporation. Mr. Fuller graduated from Cornell University with a
B.S. degree in chemical engineering and earned a J.D. degree from
DePaul University Law School.
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PROXY STATEMENT 3
[[Image Removed: PHOTO]] JUDY C. LEWENT, Principal Occupation: Executive Vice President and
Chief Financial Officer and President, Human Health Asia, Merck &
Co., Inc.
Director since 1995 Age-53
Ms. Lewent has been Executive Vice President & Chief Financial
Officer of Merck & Co., Inc., a pharmaceuticals company, since
1992. She also serves as President, Human Health Asia for Merck.
Ms. Lewent is also a director of Dell Computer Corporation,
Johnson & Johnson Merck Consumer Pharmaceuticals Company, Medco
Health Solutions, Inc., Merial Limited, and the National Bureau of
Economic Research. Ms. Lewent serves as a trustee of the
Rockefeller Family Trust and is a Life Member of the Massachusetts
Institute of Technology Corporation. She is also a member of the
Penn Medicine Executive Committee. Ms. Lewent received a B.S.
degree from Goucher College and a M.S. degree from the MIT Sloan
School of Management.
[[Image Removed: PHOTO]] DR. WALTER E. MASSEY, Principal Occupation: President of Morehouse
College
Director since 1993 Age-64
Dr. Massey has been President of Morehouse College since 1995. In
1991, he was appointed by President Bush as the Director of the
National Science Foundation after which he was Provost and Senior
Vice President for the University of California System. Prior to
that he had been director of the Argonne National Laboratory and
vice president for research at the University of Chicago. Dr.
Massey received a Ph.D. degree in Physics and a Master of Arts
degree from Washington University. He also holds a Bachelor of
Science degree in Physics and Mathematics from Morehouse College.
He is a director of BP Amoco, p.l.c., BankAmerica Corporation and
McDonalds, Inc. Dr. Massey previously served as a director of the
Company from 1984 until 1991 when he accepted his appointment to
the National Science Foundation.
[[Image Removed: PHOTO]] NICHOLAS NEGROPONTE, Principal Occupation: Chairman of the
Massachusetts Institute of Technology Media Laboratory
Director since 1996 Age-59
Mr. Negroponte is a co-founder and chairman of the Massachusetts
Institute of Technology Media Laboratory, an interdisciplinary,
multi-million dollar research center focusing on the study and
experimentation of future forms of human and machine
communication. He founded MIT's pioneering Architecture Machine
Group, a combination lab and think tank responsible for many
radically new approaches to the human-computer interface. He
joined the MIT faculty in 1966 and became a full professor in
1980. Mr. Negroponte received a B.A. and M.A. in Architecture from
Massachusetts Institute of Technology.
[[Image Removed: PHOTO]] INDRA K. NOOYI, Principal Occupation: President and Chief
Financial Officer, PepsiCo, Inc.
Director since 2002 Age-47
Ms. Nooyi is President & Chief Financial Officer of PepsiCo, Inc.,
a world leader in convenient foods and beverages. She joined
PepsiCo in 1994 as Senior Vice President of Strategic Planning,
and she became Chief Financial Officer in 2000. Ms. Nooyi also
serves on the Board of Directors of PepsiCo, Inc. and the PepsiCo
Foundation. She serves as Successor Fellow at Yale Corporation and
is on the Advisory Board of Yale University President's Council of
International Activities. She is a member of the Board of the
International Rescue Committee and Lincoln Center for the
Performing Arts in New York City. Ms. Nooyi graduated from Madras
Christian College in India with a degree in Chemistry, Physics and
Math and earned a Master's Degree in Finance and Marketing from
the Indian Institute of Management in Calcutta and a Master's
Degree in Public and Private management from Yale University's
School of Organization and Management.
[[Image Removed: PHOTO]] JOHN E. PEPPER, JR., Principal Occupation: Chairman of the
Executive Committee, Procter & Gamble Co.
Director since 1994 Age-64
Mr. Pepper is Chairman of the Executive Committee of Procter &
Gamble Co., a consumer products company. He was Chairman of the
Board from 2000 to mid 2002. He was also Chairman and Chief
Executive Officer of Procter & Gamble Co. from 1995 to 1999. Mr.
Pepper is also a director of the Xerox Corporation. Mr. Pepper
graduated from Yale University in 1960.
4 PROXY STATEMENT
[[Image Removed: PHOTO]] SAMUEL C. SCOTT III, Principal Occupation: Chairman, President and
Chief Executive Officer, Corn Products International
Director since 1993 Age-58
Mr. Scott is Chairman, President and Chief Executive Officer of
Corn Products International, a corn refining business. He was
President of the Corn Refining Division of CPC International from
1995 through 1997, when CPC spun off Corn Products International
as a separate corporation. Mr. Scott also serves on the Board of
Directors of Inroads/Chicago and Accion USA. Mr. Scott graduated
from Fairleigh Dickinson University with a bachelor's degree in
engineering in 1966 and an MBA in 1973.
[[Image Removed: PHOTO]] DOUGLAS A. WARNER III, Principal Occupation: Retired; Formerly
Chairman of the Board, J.P. Morgan Chase & Co.
Director since 2002 Age-56
Mr. Warner was Chairman of the Board and Co-Chairman of the
Executive Committee of J.P. Morgan Chase & Co., an international
commercial and investment banking firm from December 2000 until he
retired in November 2001. From 1995 to 2000, he was Chairman of
the Board, President, and Chief Executive Officer of J.P. Morgan &
Co. He is also a director of Anheuser-Busch Companies, Inc. and
General Electric Co. He is on the Board of Counselors of the
Bechtel Group Inc. and is a member of The Business Council. He is
chairman of the Board of Managers and the Board of Overseers of
Memorial Sloan-Kettering Cancer Center. Mr. Warner is a trustee of
the Pierpont Morgan Library and a member of the Yale Investment
Committee. Mr. Warner received a B.A. degree from Yale University.
[[Image Removed: PHOTO]] B. KENNETH WEST, Principal Occupation: Senior Consultant for
Corporate Governance to Teachers Insurance and Annuity
Association-College Retirement Equities Fund
Director since 1976 Age-69
Mr. West is serving as Senior Consultant for Corporate Governance
to TIAA-CREF, a major pension fund company. He retired as chairman
of Harris Bankcorp, Inc. in 1995 where he had been employed since
1957. He is also a director of The Pepper Companies, Inc. and
chairman of the board of the National Association of Corporate
Directors (NACD). Mr. West graduated from the University of
Illinois and received an MBA degree from the University of
Chicago.
[[Image Removed: PHOTO]] DR. JOHN A. WHITE, Principal Occupation: Chancellor, University of
Arkansas
Director since 1995 Age-63
Dr. White is currently Chancellor of the University of Arkansas.
Dr. White served as Dean of Engineering at Georgia Institute of
Technology from 1991 to early 1997, having been a member of the
faculty since 1975. He is also a director of Eastman Chemical
Company, J.B. Hunt Transport Services, Inc., Logility, Inc., and
Russell Corporation. Dr. White received a B.S.I.E. from the
University of Arkansas, a M.S.I.E. from Virginia Polytechnic
Institute and State University and a Ph.D. from The Ohio State
University.
[[Image Removed: PHOTO]] MIKE S. ZAFIROVSKI, Principal Occupation: President and Chief
Operating Officer, Motorola, Inc.
Director since 2002 Age-49
Mr. Zafirovski joined Motorola in June 2000 and served as
Executive Vice President and President of the Personal
Communications Sector until July 25, 2002 when he was elected
President and Chief Operating Officer. Prior to joining Motorola,
Mr. Zafirovski spent 24 years with General Electric Company, where
he served as President and CEO of GE Lighting, General Electric
Company from July 1999 to May 2000 and as President and CEO of GE
Lighting, Europe, Middle East and Africa, General Electric Company
from April 1996 to June 1999. Mr. Zafirovski received a Bachelor
of Science degree in mathematics from Edinboro University and
serves on the board of directors of United Way of Lake County
Illinois and Children's Memorial Hospital in Chicago.
PROXY STATEMENT 5
MEETINGS OF THE BOARD OF DIRECTORS OF THE COMPANY
The Board of Directors is responsible for supervision of the overall
affairs of the Company. The Board of Directors held 14 meetings during 2002.
Overall attendance at Board and committee meetings was 93%. All directors
attended 75% or more of the combined total meetings of the Board and the
committees on which they served during 2002, with the exception of Ms. Nooyi,
who became a director on November 1, 2002 and attended 2 of 3 meetings during
the remainder of 2002. The non-employee members of the Board also met in
executive session without management 3 times in 2002.
Following the Annual Meeting, the Board will consist of 13 directors. In
the interim between Annual Meetings, the Board has the authority under the
By-laws to increase or decrease the size of the Board and fill vacancies.
CORPORATE GOVERNANCE INITIATIVES
The Board has long adhered to governance principles designed to assure
the continued vitality of the Board and excellence in the execution of its
duties. The Board has responsibility for management oversight and providing
strategic guidance to the Company. In order to do that effectively, the Board
believes it should be comprised of individuals with appropriate skills and
experiences to contribute effectively to this dynamic process. The Board is
currently highly diversified; it is comprised of active and former CEOs and CFOs
of major corporations and individuals with experience in high-tech fields,
government and academia. The Board also believes that it must continue to renew
itself to ensure that its members understand the industries and the markets in
which the Company operates. The Board also believes that it must be informed
about the positive and negative issues, problems and challenges facing Motorola
and its industries and markets so the members can exercise their fiduciary
responsibilities to shareholders.
Over the last five years, the Chairman of the Board and Chief Executive
Officer of Motorola, Christopher Galvin, has twice introduced renewal efforts to
improve board governance. In response, the Board of Directors formed Ad Hoc
Committees in February 2000 and January 2002 to drive this renewal. The members
of these committees were John Pepper, past chairman and chief executive officer
of Procter & Gamble who chaired the committee, Ken West, past chairman and chief
executive officer of Harris Bank Corp. and now Senior Consultant for Corporate
Governance at TIAA-CREF, and Christopher Galvin.
The 2002 Ad Hoc Committee on Governance devoted considerable time to
further improving Motorola's governance, building on the work of the 2000 Ad Hoc
Committee. The 2002 Ad Hoc Committee on Governance considered all aspects of how
the board functions, including: meeting effectiveness; director involvement,
development and retention; committee governance, effectiveness and composition;
board and committee assessment; director assessment and review; board size,
composition and independence; executive sessions; and calendar and attendance.
Some of the highlights of the Board's enhanced governance include:
º •
º The Board will have more executive sessions during the year. Executive
sessions are informal sessions to discuss pending matters. The
non-employee members of the Board will meet four times a year in
executive session. The non-employee members of the Board and the
Chairman and CEO will meet two times a year in executive session. At
these executive sessions there will be a presiding director who will
set the agenda of the meeting. The presiding director of the four
non-employee director only executive sessions will be the following:
for the first session each year, the chair of the Compensation and
Leadership Committee; for the next two sessions, a member of the
Governance and Nominating Committee; and for the last session, the
Chair of the Governance and Nominating Committee. The presiding
director for the remaining sessions will be the Chairman and CEO.
º •
º The Board re-examined its committees and made changes in both
committee structure and membership. These changes are described below
under "Committees of the Board of Directors."
º •
º The Board will continue to assess itself and its committees annually.
The Governance and Nominating Committee will oversee the assessment
process. The process will consider overall effectiveness, achievement
of mission, discharge of responsibilities, structure, meetings,
processes, relationships with management, and development.
º •
º Directors assess themselves annually with the opportunity to get
feedback from other members of the Board. On each successive fifth
anniversary of a director joining the Board, the Chair of the
Governance and Nominating Committee and the Chairman and CEO will
conduct a review to ensure that the director's skills and experiences
will continue to enhance the overall strength of the Board. This
five-year review is a continuation of a review program developed by
the 2000 Ad Hoc Committee.
º •
º The Board has regularly scheduled meetings in February, March, May,
July, September and November. Attendance is expected at all meetings,
absent extraordinary circumstances.
º •
º Mandatory director retirement remains at age 70.
º •
º Directors will continue to visit Motorola businesses to enhance their
understanding of our businesses and meet with management in their work
environment.
These are just some of the highlights of the Board's robust governance.
The Board is committed to governance renewal and the Governance and Nominating
Committee will continue to build on the work of the 2000 Ad Hoc
6 PROXY STATEMENT
Committee and the 2002 Ad Hoc Committee on Governance to ensure that Motorola
remains at the forefront of governance.
COMMITTEES OF THE BOARD OF DIRECTORS
To assist it in carrying out its duties, the Board has delegated certain
authority to several committees. The Board currently has 6 standing committees.
As a result of the work of the 2002 Ad Hoc Committe on Governance described
above, on February 4, 2003, the Board made a number of changes in committee
composition and membership. This included changing the names of certain
committees and combining the former Compensation Committee and Management
Development Committee into a single, new committee, the Compensation and
Leadership Committee.
On February 4, 2003, the Board determined the anticipated membership of
each committee for the upcoming year. Accordingly, included in the brief
summaries below is the membership of each committee at December 31, 2002 and the
anticipated membership for the upcoming year.
Audit and Legal Committee
Members at 12/31/02: Directors Jones (Chair) (not standing), Fuller, Lewent
and White
Anticipated Members for Next Year: Directors Fuller (Chair since 1/1/03),
West and White
Number of Meetings in 2002: Seven
Functions:
º •
º Assists the Board in fulfilling its oversight responsibilities as
they relate to the Company's accounting policies, internal
controls, financial reporting practices and legal and regulatory
compliance
º •
º Monitors the independence and performance of the Company's
external auditors and internal auditors
º •
º Maintains, through regularly scheduled meetings, a line of
communication between the Board and the Company's financial
management, internal auditors and external auditors
º •
º Oversees compliance with the Company's policies for conducting
business, including ethical business standards
Compensation and Leadership Committee (combination of former Compensation
Committee and former Management Development Committee)
Members of Compensation Committee at 12/31/02: Directors Scott (Chair),
Fuller and Pepper
Number of Meetings of Compensation Committee during 2002: Six
Members of Management Development Committee at 12/31/02: Directors West
(Chair), Galvin and Scott
Number of Meetings of Management Development Committee during 2002: Four
Anticipated Members of the Compensation and Leadership Committee for Next
Year: Directors Scott (Chair), Nooyi, Warner and West
Functions:
º •
º Annually reviews performance of the members of the Office of the
Chairman and recommends to the Board compensation for members of
the Office of the Chairman
º •
º Reviews compensation for elected officers and administers and
monitors compensation, benefit and incentive plans and programs
º •
º Annually reviews director compensation and provides
recommendations to the Governance and Nominating Commitee
º •
º Reviews the process and results of the Company's organization and
management development program
º •
º Receives from management and reviews recommendations for changes
in the senior management positions in the Company
º •
º Reviews the program and results for bringing appropriate
diversity into the Company's management
Executive Committee
Members at 12/31/02: Directors Galvin (Chair), Fuller, Lewent, Pepper,
Scott, West and Zafirovski
Anticipated Members for Next Year: Directors Galvin (Chair), Fuller,
Lewent, Pepper, Scott, West and Zafirovski
Number of Meetings in 2002: None
º •
º Acts for the Board between meetings on matters already approved
in principle by the Board
º •
º Exercises the authority of the Board on specific matters assigned
by the Board from time to time
Finance Committee
Members at 12/31/02: Directors Lewent (Chair), Caio, Warner, West and
Zafirovski
Anticipated Members for Next Year: Directors Lewent (Chair), Caio, Warner
and Zafirovski
Number of Meetings in 2002: Five
Functions:
º •
º Reviews the Company's overall financial posture, asset
utilization and capital structure
º •
º Reviews the need for equity and/or debt financing and specific
outside financing proposals
º •
º Monitors the performance and investments of employee retirement
and related funds
º •
º Reviews policies, practices and results related to foreign
currency exposure, other financial risks and investment security
portfolios
º •
º Reviews the Company's dividend payment plans and practices
PROXY STATEMENT 7
Governance and Nominating Committee (formerly known as Nominating Committee)
Members at 12/31/02: Directors Pepper (Chair), Jones (not standing),
Massey, Negroponte and Warner
Anticipated Members for Next Year: Directors Pepper (Chair), Negroponte and
Nooyi
Number of Meetings in 2002: Two
Functions:
º •
º Recommends candidates for membership on the Board based on
committee-established guidelines
º •
º Considers candidates for the Board recommended by stockholders
º •
º Consults with the Chairman of the Board on committee assignments
º •
º Considers the recommendations of the Compensation and Leadership
Committee relating to director compensation and states position
thereon to full Board
º •
º Provides a process for education of new Board members
º •
º Proposes and monitors process for reviewing the independence and
performance of all Board members
º •
º Considers matters of corporate governance
This Committee will consider a candidate for director proposed by a
stockholder. A candidate must be highly qualified and be both willing and
expressly interested in serving on the Board. A stockholder wishing to
propose a candidate for the Committee's consideration should forward the
candidate's name and information about the candidate's qualifications to
the Company's Secretary as described on page 31.
Technology and Design Committee (formerly known as Technology Committee)
Members at 12/31/02: Directors Massey (Chair), Caio, Negroponte, White and
Zafirovski
Anticipated Members for Next Year: Directors Massey (Chair), Caio, Galvin
and Negroponte
Number of Meetings in 2002: Four
Functions:
º •
º Identifies and assesses significant technological issues and
needs affecting the Company
º •
º Reviews technical relationships and activities with academic
institutions and public sector laboratories
º •
º Reviews the adequacy of the Company's technical resources and
continuing technical education