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.
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.
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.
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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3
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.
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.
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.
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.
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.
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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.
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.
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.
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.
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.
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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:
•
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.
•
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."
•
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.
•
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.
•
The
Board has regularly scheduled meetings in February, March, May, July, September and November. Attendance is expected at all meetings, absent
extraordinary circumstances.
•
Mandatory
director retirement remains at age 70.
•
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
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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:
•
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
•
Monitors
the independence and performance of the Company's external auditors and internal auditors
•
Maintains,
through regularly scheduled meetings, a line of communication between the Board and the Company's financial management, internal auditors and
external auditors
•
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:
•
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
•
Reviews
compensation for elected officers and administers and monitors compensation, benefit and incentive plans and programs
•
Annually
reviews director compensation and provides recommendations to the Governance and Nominating Commitee
•
Reviews
the process and results of the Company's organization and management development program
•
Receives
from management and reviews recommendations for changes in the senior management positions in the Company
•
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
•
Acts
for the Board between meetings on matters already approved in principle by the Board
•
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:
•
Reviews
the Company's overall financial posture, asset utilization and capital structure
•
Reviews
the need for equity and/or debt financing and specific outside financing proposals
•
Monitors
the performance and investments of employee retirement and related funds
•
Reviews
policies, practices and results related to foreign currency exposure, other financial risks and investment security portfolios
•
Reviews
the Company's dividend payment plans and practices
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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:
•
Recommends
candidates for membership on the Board based on committee-established guidelines
•
Considers
candidates for the Board recommended by stockholders
•
Consults
with the Chairman of the Board on committee assignments
•
Considers
the recommendations of the Compensation and Leadership Committee relating to director compensation and states position thereon to full Board
•
Provides
a process for education of new Board members
•
Proposes
and monitors process for reviewing the independence and performance of all Board members
•
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:
•
Identifies
and assesses significant technological issues and needs affecting the Company
•
Reviews
technical relationships and activities with academic institutions and public sector laboratories
•
Reviews
the adequacy of the Company's technical resources and continuing technical education
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