PROXY STATEMENT
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PAGE
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Voting Procedures
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1
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Who Can Vote
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1
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How You Can Vote
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1
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How You May Revoke Your Proxy or Change Your Vote
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1
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General Information on Voting
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1
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Voting by Participants in the Company's 401(k) Profit Sharing Plan
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2
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Proposal 1Election of Directors for a One-Year Term
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3
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Nominees
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3
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Meetings of the Board of Directors of the Company
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6
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Corporate Governance Initiatives
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6
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Committees of the Board of Directors
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7
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Director Compensation and Related Transactions
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8
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Proposal 2Adoption of the Motorola Omnibus Incentive Plan of 2003
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9
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Equity Compensation Plan Information
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15
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Ownership of Securities
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17
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Executive Compensation
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19
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Summary Compensation Table
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19
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Stock Option Grants in 2002
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22
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Aggregated Option Exercises in 2002 and 2002 Year-End Option Values
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23
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Long-Term Incentive PlansNo Awards in 2002
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23
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Retirement Plans
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23
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Employment Contracts, Termination of Employment and Change in Control Arrangements
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24
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Report of Compensation Committee on Executive Compensation
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25
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Report of Audit and Legal Committee
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28
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Performance Graph
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29
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Other Matters
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30
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Appendix A: Audit and Legal Committee Charter
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A-1
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APPENDIX OF FINANCIAL INFORMATION
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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F-1
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Financial Highlights
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F-41
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Financial Statements and Notes
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F-42
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PROXY STATEMENTVOTING PROCEDURES
The
Board of Directors is soliciting proxies to be used at the May 5, 2003 Annual Meeting. Your vote is very important. This proxy statement, the form of proxy and the 2002
Summary Annual Report will be mailed to stockholders on or about March 27, 2003. The Summary Annual Report is not a part of this proxy statement. The proxy statement and Summary Annual Report
are also available on the Company's website at www.motorola.com/investor.
Who Can Vote
Only stockholders of record at the close of business on March 14, 2003 (the "record date") will be entitled to notice of and to vote at the Annual Meeting
or any adjournments thereof. On that date, there were 2,315,606,622 issued and outstanding shares of the Company's common stock, $3 par value per share ("Common Stock"), the only class of voting
securities of the Company.
How You Can Vote
There are three convenient voting methods:
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Voting
by Telephone. You can vote your shares by telephone by calling the toll-free telephone number on your proxy card. The deadline for
telephone voting is 11:59 p.m., Eastern time on Sunday, May 4, 2003. Telephone voting is available 24 hours a day. If you vote by telephone you should NOT return your proxy card.
If you are a beneficial owner, or you hold your shares in "street name," please check your voting instruction card or contact your broker or nominee to determine whether you will be able to vote by
telephone.
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Voting
by Internet. You can also vote via the Internet. The website for Internet voting is also on your proxy card. The deadline for Internet voting is
11:59 p.m., Eastern time on Sunday, May 4, 2003. Internet voting also is available 24 hours a day. If you vote via the Internet you should NOT return your proxy card. If you are a
beneficial owner, or you hold your shares in "street name," please check your voting instruction card or contact your broker or nominee to determine whether you will be able to vote by Internet.
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Voting
by Mail. If you choose to vote by mail, mark your proxy, date and sign it, and return it in the postage-paid envelope provided. To ensure
your vote is counted, receipt of your mailed proxy is needed by Saturday, May 3, 2003.
How You May Revoke Your Proxy or Change Your Vote
You can revoke your proxy at any time before it is voted at the 2003 Annual Meeting by either:
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Sending
written notice of revocation to the Secretary.
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Submitting
another timely proxy by telephone, Internet or paper ballot.
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Attending
the 2003 Annual Meeting and voting in person. If your shares are held in the name of a bank, broker or other holder of record, you must obtain a
proxy, executed in your favor, from the holder of record to be able to vote at the meeting.
General Information on Voting
You are entitled to cast one vote for each share of Common Stock you own on the record date. Stockholders do not have the right to vote cumulatively in electing
directors.
In order for business to be conducted, a quorum must be represented at the Annual Meeting. A quorum is a majority of the shares entitled to vote at the Annual
Meeting. Shares represented by a proxy in which authority to vote for any matter considered is "withheld", a proxy marked "abstain" or a proxy as to which there is a "broker non-vote" will
be considered present at the meeting for purposes of determining a quorum.
Directors will be elected by a plurality of the votes cast at the Annual Meeting, meaning the 13 nominees receiving the most votes will be elected. Only votes cast
for a nominee will be counted. Unless indicated otherwise by your proxy, the shares will be voted for the 13 nominees named in this proxy statement. Instructions on the accompanying proxy to withhold
authority to vote for one or more of the nominees will result in those nominees receiving fewer votes but will not count as a vote against the nominees.
In order to adopt the Motorola Omnibus Incentive Plan of 2003, an affirmative vote of a majority of the shares present in person or by proxy and entitled to vote
at the Annual Meeting is required. For this proposal, an abstention will have the same effect as a vote against the proposal. Broker non-votes will not be voted for or against this
proposal and will have no effect on this proposal.