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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
/X/ FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
/ / FOR THE TRANSITION PERIOD FROM _________ TO _________
COMMISSION FILE NUMBER 1-7221
MOTOROLA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 36-1115800
(STATE OF (I.R.S. EMPLOYER
INCORPORATION) IDENTIFICATION NO.)
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1303 EAST ALGONQUIN ROAD, SCHAUMBURG, ILLINOIS 60196
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER (847) 576-5000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
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NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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Common Stock, $3 Par Value per Share New York Stock Exchange
Chicago Stock Exchange
Liquid Yield Option Notes due 2009 New York Stock Exchange
Liquid Yield Option Notes due 2013 New York Stock Exchange
Rights to Purchase Junior Participating New York Stock Exchange
Preferred Stock, Series A Chicago Stock Exchange
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SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes _X_ No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of voting stock held by non-affiliates of the
registrant as of January 31, 1996 was approximately $30.8 billion (based on
closing sale price of $53.75 per share as reported for the New York Stock
Exchange-Composite Transactions).
The number of shares of the registrant's Common Stock, $3 par value per
share, outstanding as of January 31, 1996 was 591,696,173.
DOCUMENTS INCORPORATED BY REFERENCE
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DOCUMENT LOCATION IN FORM 10-K
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Portions of Registrant's Proxy Statement for 1996 Annual Meeting of Stockholders Parts I, II, III and IV
Including Management's Discussion and Analysis and Consolidated Financial Statements
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PART I
Item 1: Business
(a) General development of business.
Motorola, Inc. is a corporation organized under the laws of the State of
Delaware as the successor to an Illinois corporation organized in 1928.
Motorola's principal executive offices are located at 1303 East Algonquin Road,
Schaumburg, Illinois 60196 (telephone number: 847-576-5000).
Motorola, Inc., one of the world's leading providers of electronic equipment,
systems, components and services for worldwide markets, is engaged in the
design, manufacture and sale, principally under the Motorola brand, of a
diversified line of such products. These products include two-way land mobile
communication systems, paging and wireless data systems, personal communications
equipment and systems and other forms of electronic communication systems;
subscriber and infrastructure equipment for the telephone market; cellular
mobile and portable telephones and systems; semiconductors, including integrated
circuits, discrete devices and microprocessor units; information systems
products such as modems, multiplexers and network processors; electronic
equipment for military and aerospace use; electronic engine controls, and other
automotive and industrial electronic equipment; and multifunction computer
systems for distributed data processing and office automation applications.
Motorola also provides services for paging, cellular telephone, shared mobile
radio and wireless data.
The term "Motorola" as used hereinafter means Motorola, Inc. or Motorola, Inc.
and its subsidiaries, as the context requires.
(b) Financial information about industry segments.
The response to this section of Item 1 is incorporated by reference to Note 7
of the Notes to the Consolidated Financial Statements contained in the
attachment to Motorola's Proxy Statement for the 1996 annual meeting of
stockholders.
(c) Narrative description of business.
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GENERAL SYSTEMS SECTOR
The General Systems Sector includes the Cellular Subscriber Group, the Cellular
Infrastructure Group, the Network Ventures Division and the Motorola Computer
Group.
The Cellular Subscriber and Infrastructure Groups manufacture, sell, install and
service cellular infrastructure and radiotelephone equipment. In addition, the
Cellular Subscriber Group resells cellular line service in the U.S., New
Zealand, Germany, France and the U.K. markets. The Network Ventures Division is
a joint venture partner in cellular operating systems in Argentina, Uruguay,
Hong Kong, Israel, Chile, Mexico, Thailand, Pakistan, Nicaragua, Dominican
Republic, Russia, Honduras, Jordan, Lithuania and Japan. The Cellular
Infrastructure Group products include electronic exchanges (i.e., telephone
switches), base site controllers and radio base stations. Radiotelephone
products include mobile, portable, personal and transportable radiotelephones
with various options, personal communications equipment and cordless telephones.
Products are marketed worldwide through original equipment manufacturers,
carriers, distributors, dealers, retailers and, in certain countries, through a
direct sales force. Financing of cellular and personal communications
infrastructure equipment is sometimes offered to qualifying customers.
Radio frequencies are required to provide cellular and personal communications
services. The allocation of frequencies is regulated in the United States and
other countries throughout the world, and limited spectrum space is allocated
for these services. The growth of the cellular and personal communications
industry and Motorola's results may be affected if adequate frequencies are not
allocated for its use, or alternatively, if new technology is not developed to
increase capacity on presently allocated frequencies.
The Motorola Computer Group develops, manufactures, sells and services multi-
function computer systems and board level products, together with operating
systems and system enablers based on the Motorola 68000, 88000 and Power PC
series microprocessors. These products are sold worldwide to a variety of
customers, some of whom produce computer products which compete with the Group.
The Computer Group's products
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are marketed to end-users, original equipment manufacturers, value-added
resellers and distributors throughout the world. The Motorola Computer Group
also markets computer products and peripherals that it does not manufacture.
General Systems products are subject to constant changes in technology.
Consequently, the Sector has an extensive research and development program. Its
products make substantial use of solid state semiconductor components, including
integrated circuits.
The Sector's backlog amounted to $1.47 billion at December 31, 1995 and $1.66
billion at December 31, 1994. The 1995 backlog is believed to be generally
firm, and approximately 100% of that amount is expected to be shipped during
1996. This forward-looking estimate of the firmness of such orders is subject
to future events which may cause the percentage of the 1995 backlog actually
shipped to change.
The General Systems Sector experiences intense competition from numerous
competitors ranging from some of the world's largest companies to small,
specialized firms. The Sector competes in markets worldwide. Competitive
factors in the market for the products are price, service, delivery, product
quality and product and system performance. An additional factor for the
Motorola Computer Group products is the availability of software products to
address specific user applications. Participation in a very competitive
industry requires a continuing high level of investment in technology.
Management believes that, looking forward, Motorola's commitment to research and
development programs for improving existing products and developing new products
and its utilization of state-of-the-art technology will allow the General
Systems Sector to remain competitive.
Materials used in the Sector's operations are generally second-sourced to ensure
a continuity of supply. Occasionally, there are shortages of required purchased
components. Energy necessary for the Sector's operations consists of
electricity, natural gas and gasoline, all of which are currently adequate in
supply. The Sector's factories are highly automated and therefore, dependent
upon a steady supply of electrical
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power. Difficulties in obtaining any of the aforementioned items could affect
the Group's and Motorola's results.
The Cellular Subscriber Group carries reasonable product inventories in
distribution centers to meet customer delivery requirements. As a general rule,
the Cellular Subscriber and Infrastructure Groups do not permit customers to
return merchandise. The Motorola Computer Group permits customers to return
products in accordance with practices followed in the computer industry. The
Cellular Subscriber Group has offered extended payment terms when necessary to
meet competitive offerings. In the Cellular Infrastructure Group, payment terms
are particular to individual contracts, a majority of which provide for the hold
back of certain residual payments until system acceptance by the customer. For
qualifying customers, the Cellular Infrastructure Group finances equipment
purchases under various arrangements. Credit terms offered by the Motorola
Computer Group normally are in accordance with practices followed in the
computer industry. Occasionally, the Motorola Computer Group uses installment
sale agreements and leases which are sold to a Motorola finance subsidiary.
Patent protection is very important to the cellular business. Also, reference
is made to the material under the heading "General" for information relating to
patents and trademarks and seasonality of business with respect to this industry
segment.
The General Systems Sector's headquarters are located in Schaumburg, Illinois.
The Sector operates manufacturing facilities in Tempe, Arizona; Arlington
Heights, Grayslake, Harvard, Libertyville and McHenry, Illinois; Ft. Worth,
Texas; Swindon, England; Penang, Malaysia; Easter Inch, Scotland; Flensburg,
Germany; Arad, Israel; and Tianjin, China. A new manufacturing facility is
under construction in Harvard, Illinois. The Sector also has joint venture
manufacturing operations in Austria and China.
SEMICONDUCTOR PRODUCTS SECTOR
Semiconductors control and amplify electrical signals and are used in a broad
range of electronic products, including television receivers and
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other consumer electronic products, solid-state ignition systems and other
automotive electronic products, major home appliances, industrial controls,
robotics, aircraft, missiles, space vehicles, communications equipment,
computers, calculators and automatic controls.
The semiconductor products manufactured by Motorola's Semiconductor Products
Sector include integrated circuit devices (metal-oxide semiconductor and
bipolar) such as dynamic and static random access memories, microcontrollers,
microprocessors, microcomputers, gate arrays, standard cells, digital signal
processors, mixed signal and other logic and analog components. In addition, the
Sector manufactures a wide variety of discrete devices including zener and
tuning diodes, RF devices, power and small signal transistors, field effect
transistors, microwave devices, optoelectronics, rectifiers and thyristors.
The Sector sells its products worldwide to original equipment manufacturers
through its own sales force. Products also are sold through a network of
industrial distributors in the United States. Sales outside the United States
are made through the Sector's own sales staff and through independent
distributors. Products manufactured by the Sector are also supplied to other
operating units of Motorola. Other sectors of Motorola collectively constitute
one of the Sector's two largest customers, and the loss of, or significant
reduction of purchases by, either could affect the Sector's results. The Sector
and its results are affected by the cyclical nature of the semiconductor
industry. Available capacity, cyclical customer demands, new product
introduction and aggressive pricing could impact its business and results. The
Sector's capacity is being increased to meet current market demand, but the
Sector is still experiencing some isolated areas of capacity constraints.
In addition to the Sector's factory expansion program, which includes
some joint venture manufacturing facilities, it is actively pursuing additional
capacity through the sourcing of products from outside vendors. Because of the
market demand, the available quantity of some products have been allocated among
customers, including other Motorola operating units, from time to time, which
has affected the Sector's and Motorola's results.
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The semiconductor industry is subject to rapid changes in technology, requires a
high level of capital spending and an extensive research, development and design
program to maintain state-of-the-art technology. Accordingly, the Sector
maintains an extensive research and development program in advanced
semiconductor technology.
The Sector's backlog amounted to $3.25 billion at December 31, 1995 and $2.68
billion at December 31, 1994. The 1995 backlog amount is believed to be
generally firm, and approximately 100% of that amount is expected to be shipped
during 1996. However, in the past, the Sector has experienced abrupt and
repeated rescheduling of previously firm and even expedited orders. This
forward-looking estimate of the firmness of such orders is subject to future
events which may cause the percentage of the 1995 backlog actually shipped to
change.
The Semiconductor Products Sector experiences intense competition from numerous
competitors ranging from large companies offering a full range of products to
small companies specializing in certain segments of the market. The competitive
environment is also changing as a result of increased alliances between
competitors. The Sector competes in many markets, including the
telecommunications, personal computer/work station, industrial, automotive,
consumer, computer, government and distributor markets. In 1994, the Sector
announced that it is discontinuing its military business. Due to the multitude
of competitors, price, service, technology and product quality are important
factors in competition. The ability to develop new products to meet customer
requirements and to meet customer delivery schedules are also competitive
factors. Management believes, looking forward, that Motorola's commitment to
research and development of new products combined with utilization of
state-of-the-art technology should allow the Sector to remain competitive.
The Sector is not currently experiencing any shortages in obtaining raw
materials. However, it is experiencing some extended lead times on certain raw
materials due to industry demand, but this is not currently having any material
impact on the Sector's business. A significant portion of certain materials and
parts used by the Sector is supplied from a single country. The Sector is
seeking additional sources of supply to decrease
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this dependency. With respect to other materials, the Sector also is seeking
additional sources of supply to minimize the risk of obtaining materials from
only a few sources. Electricity, oil and natural gas are used extensively in
the Sector's operations. All of these energy sources are available in adequate
quantities for current needs. Electricity and oil are the primary energy
sources for the Sector's foreign operations, and presently, there are no
shortages of these sources although the reliability of electrical power has been
a problem from time to time. Difficulties in obtaining any of the
aforementioned items could affect the Sector's and Motorola's results.
Reference is made to the material under the heading "General" for information
relating to patents and trademarks and seasonality of business with respect to
this industry segment.
The Semiconductor Products Sector's headquarters are in Phoenix, Arizona. Its
manufacturing facilities are located in Chandler, Mesa, Phoenix and Tempe,
Arizona; Irvine, California; Research Triangle Park, North Carolina; Austin,
Texas; Tianjin, China; Toulouse, France; Munich, Germany; Kwai Chung and Tai Po,
Hong Kong; Aizu and Sendai, Japan; Seoul, Korea; Kuala Lumpur and Seremban,
Malaysia; Guadalajara, Mexico; Carmona and Manila, the Philippines; Singapore;
Chung-Li, Taiwan; and East Kilbride and South Queensferry, Scotland.
MESSAGING, INFORMATION AND MEDIA SECTOR
Motorola's Messaging, Information, and Media Sector ("MIMS") is composed of the
Paging Products Group, the Wireless Data Group, the Information Systems Group,
the International Networks Division and the newly-formed Multimedia Group. The
Paging Products Group designs, manufactures and distributes paging subscriber,
paging infrastructure, and related products in almost all geographic regions of
the world. The Wireless Data Group designs, manufactures and distributes
wireless data hardware and software products, infrastructure equipment and
systems. The Information Systems Group designs, manufactures and sells modems,
analog and digital transmission devices and similar products. The International
Networks Division operates paging, wireless data and
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gateway communications services on a worldwide basis. These services are
provided primarily through joint ventures but also through wholly-owned
subsidiaries. All of the paging and wireless data operating companies with
which the International Networks Division is involved operate under radio
frequency licenses issued by governmental authorities in the various countries
of the world. The Multimedia Group, formed in 1995, is developing products that
are expected to enable voice, video and high speed communications over cable
networks. The introduction of some products is expected in late 1996.
MIMS provides equipment and systems to meet the communication needs of many
different types of businesses, institutional and government organizations.
Also, there is a growing base of paging and wireless data customers using the
products for personal and family communication needs.
Radio frequencies are required to provide paging and wireless data information
services. The allocation of frequencies is regulated in the United States and
other countries throughout the world, and limited spectrum space is allocated
for these services. The growth of the paging and wireless data information
industry and Motorola's results could be affected if adequate frequencies are
not allocated for its use, or alternatively, if new technology is not developed
to increase capacity on presently allocated frequencies.
The Sector's backlog amounted to $1.1 billion at December 31, 1995 and $0.7
billion at December 31, 1994. The 1995 backlog is believed to be generally
firm, and approximately 100% of that amount is expected to be shipped during
1996. This forward-looking estimate of the firmness of such orders is subject
to future events which may cause the percentage of the 1995 backlog actually
shipped to change.
No one customer or a few customers represent a material part of the business of
the MIMS segment.
MIMS products are sold through both domestic and international sales
organizations which sell through direct and indirect channels such as
distributors, retailers and value added resellers.
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This segment carries on an extensive product development program. Its products
make substantial use of solid-state semiconductor components, including
integrated circuits.
This segment experiences widespread, intense competition from numerous
competitors ranging from some of the world's largest, diversified companies to
foreign state-owned telecommunications companies to many small, specialized
firms. The principal manufacturing operations of many competitors are located
outside of the United States. Competitive factors for MIMS include, but are not
limited to, price, quality, time-to-market, technology, company image, service,
warranty, product features and availability.
Materials and components required by this segment are relatively dependable and
certain, but normal fluctuations in market demand and supply could cause
temporary, selective shortages. Occasionally, shortages or extended delivery
periods have occurred in various component parts, the effects of which have
generally been industry-wide and short in duration. MIMS requires commercially
available electrical energy for manufacturing and administrative operations.
Facilities are temperature controlled with oil and gas heat and electrical
power. These types of energy are currently readily available. Difficulties in
obtaining any of the aforementioned items could affect the Sector's and
Motorola's results.
Reference is made to the material under the heading "General" for information
relating to patents and trademarks and seasonality with respect to this segment.
This segment's headquarters are located in Schaumburg, Illinois, with
manufacturing facilities in Lake Zurich, Illinois; Boynton Beach, Florida; Ft.
Worth, Texas; Mansfield, Massachusetts; Huntsville, Alabama; Arad, Israel;
Singapore; Tianjin, China; Vega Baja, Puerto Rico; Dublin, Ireland; Bangalore,
India; and Seoul, Korea.
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LAND MOBILE PRODUCTS SECTOR
The Land Mobile Product Sector ("LMPS") designs, manufactures and sells analog
and digital two-way voice and data products and systems for a variety of
worldwide applications.
As a principal supplier of mobile and portable FM two-way radio products and
systems, LMPS provides equipment and systems to meet the communications needs of
individuals and many different types of business, institutional and governmental
organizations. Products of LMPS provide voice and data communication between
vehicles, persons and base stations. Also, LMPS provides network services for
two-way radio subscribers in U.S. and international markets through joint
ventures and wholly-owned companies.
The principal customers for two-way radio products and systems include public
safety agencies, such as police, fire, highway maintenance departments and
forestry services; petroleum companies; gas, electric and water utilities;
telephone companies; diverse industrial companies; mining companies;
transportation companies such as railroads, airlines, taxicab operations and
trucking firms; institutions, such as schools and hospitals; and companies in
the construction, vending machine and service businesses. Also, there is a base
of customers using the products for personal and family communication needs.
These products are also sold and leased to various federal agencies for many
uses. No one customer represents a material part of the business of the Land
Mobile Products segment. However, LMPS has a few customers that, collectively,
the loss of, or a significant reduction in purchases by, could be material to
its business.
Users of two-way radios are regulated by a variety of governmental and other
regulatory agencies throughout the world. In the United States, users of
two-way radios are licensed by the Federal Communications Commission ("FCC")
which has broad authority to make rules and regulations and prescribe
restrictions and conditions to carry out the provisions of the Communications
Act of 1934. The FCC's authority includes, among other things, the power to
classify radio stations, prescribe the nature of the service to be rendered by
each class of station,
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assign frequencies to the various classes of stations and regulate the kinds of
equipment which may be used. Regulatory agencies in other countries have
similar types of authority. Consequently, the business and results of this
segment could be affected by the rules and regulations adopted by the FCC or
regulatory agencies in other countries from time to time.
Motorola has developed products using trunking and data communications
technologies to enhance spectral efficiencies. The growth and results of the
two-way radio communications industry may be affected, however, by the
regulations of the FCC or other regulatory agencies relating to the allocation
of frequencies for land mobile communications users, especially in urban areas
where such frequencies are heavily used.
LMPS also manufactures and sells signaling and control systems and communication
control centers used in two-way radio operations.
This segment carries on an extensive product development program. Its products
make substantial use of solid-state semiconductor components, including
integrated circuits.
The products manufactured and marketed by LMPS are sold directly through its own
distribution force, or through independent authorized distributors and dealers,
commercial radio service operators and independent commission sales
representatives. Leasing and conditional sale arrangements are also made
available to customers. The direct distribution force also provides systems
engineering and technical services to meet the customer's particular needs. The
customer may choose to install and maintain the equipment with its own
employees, or may obtain installation, service and parts from a network of
Motorola authorized service stations (most of whom are also authorized dealers)
or from other non-Motorola service stations. The majority of the leases and
conditional sale contracts entered into by LMPS have been sold to several
unaffiliated finance companies and banks on terms which, in most instances,
provide recourse to Motorola with certain limitations. Some leases and
conditional sale contracts were sold to a Motorola finance subsidiary.
Subscriber units are sold directly and through indirect distribution channels.
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This segment's backlog amounted to $1.18 billion at December 31, 1995 and $1.30
billion at December 31, 1994. The 1995 backlog amount is believed to be
generally firm, and approximately 88% of that amount is expected to be shipped
during 1996. This forward-looking estimate of the firmness of such orders is
subject to future events which may cause the percentage of the 1995 backlog
actually shipped to change.
This segment experiences widespread, intense competition from numerous
competitors ranging from some of the world's largest, diversified companies to
foreign state-owned telecommunications companies to many small, specialized
firms. The principal manufacturing operations of many competitors are located
outside of the United States. Competitive factors for LMPS include price,
product performance, product quality, quality and availability of service, and
quality and availability of systems engineering, with no one factor being
dominant. Management believes, looking forward, that Motorola's commitment to
research and development programs for improving existing products and developing
new products and its utilization of state-of-the-art technology should allow
this segment to remain competitive.
Availability of materials and components required by this segment is relatively
dependable and certain, but normal fluctuations in market demand and supply
could cause temporary, selective shortages and affect results. Direct sourcing
of materials and components from foreign suppliers is becoming more extensive.
LMPS operates certain offshore subassembly plants, the loss of one or more of
which could constrain its production capabilities and affect results. Natural
gas, electricity and, to a lesser extent, oil, are the primary sources of
energy. Current supplies of these forms of energy are considered to be adequate
for this segment's United States and foreign operations. Difficulties in
obtaining any of the aforementioned items could affect the Sector's and
Motorola's results. LMPS provides custom products based on assembling basic
units into a large variety of models or combinations. This requires stocking of
inventories and large varieties of piece parts as well as a variety of basic
level assemblies to meet short delivery requirements.
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Reference is made to the material under the heading "General" for information
relating to patents and trademarks with respect to this segment.
Information with respect to the transfer of LMPS's 800 MHz Specialized Mobile
Radio licenses and assets to Nextel Communications, Inc. is incorporated by
reference to the information under the caption "Land Mobile Products" in the
Management's Discussion and Analysis of Financial Condition and Results of
Operations and in Note 6 of the Notes to the Consolidated Financial Statements,
both contained in the attachment to Motorola's Proxy Statement for the 1996
annual meeting of stockholders.
This segment's headquarters are located in Schaumburg, Illinois, with major
manufacturing facilities in Schaumburg, Illinois; Plantation, Florida; Mount
Pleasant, Iowa; Swords, Ireland; Arad, Israel; and Penang, Malaysia.
GOVERNMENT AND SPACE TECHNOLOGY GROUP
The Government and Space Technology Group is engaged in the design, development
and production of electronic systems and products, and it competes for a variety
of United States Government projects and commercial business. The Group
expanded the application of its core capabilities to support global growth
opportunities within other Motorola businesses. The Group produces products
related to electronic and communications equipment that have various
applications based upon customer requirements of the Group's three business
segments: government, commercial and satellite communications. The government
business segment, known as the Government Electronics Division and Government
Systems Operations, primarily performs research, development and production work
under contracts with governmental agencies, but also conducts independent
research and development programs. The government business segment produces
products such as diversified military electronic equipment, including military
communications equipment, radar systems, data links, display systems,
positioning and navigation systems, missile guidance equipment, electronic
ordnance devices and drone electronic systems. The
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government business segment has been predominantly dependent upon the United
States Government as its main customer, acting as either a prime contractor or a
subcontractor to other prime contractors. The total loss of all of this
business could have a material adverse effect on the Group. Contracts are
secured from United States Government agencies and their suppliers by
negotiation and competitive bidding. The government procurement environment is
highly regulated and continues to be very competitive. Competition has
increased substantially in all aspects of the government business due to a
slowdown in procurement resulting from a lower defense budget. Competitors
include large and small technically competent firms. Some competitors from whom
the segment procured subcontract work in the past are becoming more vertically
integrated and are performing the work previously subcontracted. This segment
currently expects to continue to meet competition on the basis of price and
quality of product performance.
The Group has diversified its activities by applying its core technologies to
other non-federal government and commercial opportunities. During 1993, the
Group organized its commercial business thrusts into the Diversified
Technologies Division ("DTD"). This segment designs, builds, and markets
commercial test equipment and evaluates new product and market opportunities
utilizing various technologies. Also, in 1995, DTD established a core group of
technical capabilities to meet the global growth opportunities of other Motorola
businesses. This activity is expected to continue to make a significant
contribution toward meeting those needs.
The Group's Satellite Communications Division (SATCOM) is developing the
IRIDIUM-Registered Trademark- satellite-based communication system. The
IRIDIUM-Registered Trademark- system is a space-based wireless communications
system that is being designed to provide global digital service to hand-held
telephones and related equipment. The IRIDIUM-Registered Trademark- system
involves four components: (1) a constellation of low earth orbit satellites, (2)
a centralized system control center, (3) gateways distributed throughout the
world and (4) individual subscriber units including, for example, voice, data,
facsimile and paging. SATCOM is the prime contractor under contracts with
Iridium, Inc. to provide and launch the satellites, control the ground stations
and maintain the system. During the last four years, this contract for
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development effort has become a significant portion of the Group's business and
is expected to remain a major contributor to the Group's sales for the next
several years. The loss of these contracts could have a material adverse effect
on the Group's and Motorola's results. SATCOM has entered into significant
subcontracts for portions of the system for which it will generally remain
obligated even if Iridium, Inc. is unable to satisfy the terms of its contracts
with SATCOM, including funding. SATCOM also performs research, development,
design and manufacturing services for space-based equipment for government
customers. IRIDIUM-Registered Trademark- is a registered trademark and service
mark of Iridium, Inc.
Total sales for the Group include sales made to a number of free world
governments and corporations. Products of the Group are marketed outside the
United States by a few distributors, by independent representatives and by the
Group's own sales force. In 1995, a small percentage (approximately 4%) of the
Group's business was conducted internationally, primarily through the government
business sector. These sales generally relate to the development and deployment
of defense, security and commercial air traffic management systems with selected
countries, concentrated in the Asia-Pacific region and Canada.
All contracts with the United States Government are subject to cancellation at
the convenience of the Government, and the contracts with Iridium, Inc. may be
terminated by Iridium, Inc. pursuant to the terms set forth in the contracts.
Materials used by the Group in its operations are generally available. Natural
gas and electricity are the principal types of energy used, and availability of
both to the Group is currently more than adequate. However, difficulties in
obtaining any of the aforementioned items could affect the Group's and
Motorola's results.
Patents continue to become more important as competition increases in a
declining U.S. Government market and as the Group expands quasi-government
commercial opportunities. Also, reference is made to the material under the
heading "General" for information relating to patents and trademarks.
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The Group has its headquarters in Scottsdale, Arizona, with manufacturing
facilities in Scottsdale and Chandler, Arizona.
AUTOMOTIVE, ENERGY AND CONTROLS GROUP
The Automotive, Energy and Controls Group manufactures and sells products in
three major categories: automotive and industrial electronics; energy
storage products and systems; printed circuit boards and ceramic and quartz
electronic components. The Group also includes operations which manufacture
electronic ballasts for fluorescent lighting and radio frequency
identification devices. The Group established a Flat Panel Display Division
to develop the next generation of flat panel displays. The Group is involved
in several joint ventures.
The Group sells its automotive and industrial electronics products to original
equipment manufacturers, including foreign and domestic automobile
manufacturers, heavy vehicle manufacturers, farm equipment manufacturers and
industrial customers. The energy storage products business and the ceramic and
quartz products business sell primarily to other industry segments within
Motorola, principally the Land Mobile and General Systems segments. A large
part of the Group's business is dependent upon two external customers, the loss
of either of which could have a material adverse effect on the business of the
Group. Demand for products is linked to automobile sales in the United States
and other countries where the Group sells its products. The Group experiences
competition from numerous global competitors including automobile manufacturers.
All materials used by the Group have good availability at this time. The Group
uses electricity and gas in its operations, which are currently adequate in
supply. However, difficulties in obtaining any of the aforementioned items
could affect the Group's and Motorola's results.
Competitive factors in the sale of all of the Group's products include price,
product quality and performance, supply integrity, quality reputation,
experience, responsiveness and design and manufacturing technology.
<PAGE>
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Reference is made to the material under the heading "General" for information
relating to patents and trademarks with respect to this industry segment.
The Group's headquarters is located in Northbrook, Illinois. It has
manufacturing operations located in Scottsdale, Arizona; San Jose, California;
Atlanta, Georgia; Northbrook, Buffalo Grove, Schaumburg and Vernon Hills,
Illinois; Albuquerque, New Mexico; Elma, New York; Carlisle, Pennsylvania;
Seguin, Texas; Angers, France; Stotfold, England; Singapore; Tianjin, China;
Chung-Li, Taiwan; Penang, Malaysia; Vega Baja, Puerto Rico; Dublin, Ireland; and
San Jose, Costa Rica.
GENERAL
CUSTOMERS. Motorola is not dependent for a material part of its overall
business upon a single or a very few customers. Approximately 2.7% of
Motorola's total sales and revenues in 1995 were received from various branches
and agencies, including the armed services, of the United States Government.
All contracts with the United States Government are subject to cancellation at
the convenience of the Government.
Government contractors, including Motorola, are routinely subjected to numerous
audits and investigations, which may be either civil or criminal in nature. The
consequences of these audits and investigations may include administrative
action to suspend business dealings with the contractor and to exclude it from
receiving new business. In addition, Motorola, like other contractors, is
internally reviewing aspects of its government contracting operations, and,
where appropriate, taking corrective actions and making voluntary disclosures to
the Government. From time to time, these audits and investigations may
adversely affect Motorola and its results.
<PAGE>
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BACKLOG. Motorola's aggregate backlog position, including the backlog position
of subsidiaries through which some of its business units operate, as of the end
of the last two fiscal years, was approximately as follows:
December 31, 1995. . . $8.024 billion
December 31, 1994. . . $7.594 billion
The orders supporting the 1995 backlog amounts shown in the foregoing table are
believed to be generally firm, and approximately 98% of orders on hand at
December 31, 1995 are expected to be shipped during 1996. However, this is a
forward-looking estimate of the amount expected to be shipped, and future events
may cause the percentage actually shipped to change.
Motorola uses the percentage-of-completion method to recognize revenues and
costs associated with most long-term contracts. For contracts involving certain
technologies, revenues and profits, or parts thereof, are deferred until
technological feasibility is established and customer acceptance is obtained.
For other product sales, revenue is recognized at the time of shipment, and
reserves are established for price protection and cooperative marketing programs
with distributors.
RESEARCH AND DEVELOPMENT. Throughout its history, Motorola has relied, and
continues to rely primarily on its research and development programs for the
development of new products and its production engineering capabilities for the
improvement of existing products. Technical data and product application ideas
are exchanged among Motorola's industry segments on a regular basis. Research
and development expenditures relating to new product development or product
improvement, other than customer-sponsored contracts, were approximately $2,197
million in 1995, $1,860 million in 1994 and $1,521 million in 1993.
In addition, research funded under customer-sponsored contracts amounted to
approximately $546 million in 1995, $601 million in 1994 and $324 million in
1993.
Approximately 11,600 professional employees were engaged in such research
activities (including customer-sponsored) during 1995.
<PAGE>
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PATENTS AND TRADEMARKS. Motorola owns 7,254 patents in the United States and
6,411 in foreign countries. These foreign patents are counterparts of
Motorola's United States patents. During 1995, Motorola was granted 1,016
United States patents. Many of the patents owned by Motorola are used in its
operations or licensed for use by others, and Motorola is licensed to use
certain patents owned by others. In some instances, certain of the patents
licensed by Motorola to others have generated significant amounts of revenue to
Motorola.
Motorola considers its trademark "MOTOROLA" and the "M" symbol to be valuable
assets. These are protected through trademark registrations. Other trademarks
of Motorola are protected and registered in the relevant markets, but are used
only on limited product lines.
ENVIRONMENTAL QUALITY. Motorola operations are from time to time the subjects
of investigations, conferences, discussions and negotiations with various
federal, state and local environmental agencies with respect to the discharge or
cleanup of hazardous waste and compliance by those operations with environmental
laws and regulations. The balance of the response to this section of Item 1 is
incorporated by reference to Note 6 of the Notes to the Consolidated Financial
Statements under the caption "Environmental and Legal" and the information
contained in Management's Discussion and Analysis of Financial Condition and
Results of Operations under the caption "Environmental Matters" contained in the
attachment to Motorola's Proxy Statement for the 1996 annual meeting of
stockholders.
MISCELLANEOUS. At December 31, 1995, there were approximately 142,000 employees
of Motorola and its subsidiaries. The business of Motorola and its industry
segments is taking on certain seasonal characteristics: the Semiconductor
Products Sector has tended to have stronger, seasonally-adjusted sales in the
first half of the year; sales of products, such as cellular telephones and
pagers, in consumer markets tend to increase in the fourth quarter; also, as the
market for paging products in China has matured, a seasonal pattern has
developed in which orders decline in the fourth and first quarters. An increase
or decrease in large system orders in the Cellular Infrastructure Group and the
Land Mobile Products Sector could cause the volatility of orders, revenues and
profits recognized in
<PAGE>
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any particular period. Radio frequencies are required to use many of Motorola's
products and services. These frequencies and their use are regulated by a
variety of agencies throughout the world. The growth in cellular, paging and
other wireless communications products could be affected if adequate frequencies
are not allocated for their use, or through regulation or regulatory changes.
In the United States, the Federal Communications Commission has broad authority
to make the rules and regulations and prescribe restrictions and conditions on
the use of radio frequencies.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. Except for historical matters, the
matters discussed in this Form 10-K are forward-looking statements that involve
risks and uncertainties. Forward-looking statements include, but are not
limited to, statements under the following headings; (i) "General Systems
Sector," about the allocation of frequencies, development of technologies,
growth, expected shipments during 1996, and competitiveness through research and
development and technology; (ii) "Semiconductor Products Sector," about the loss
of or reduction in purchases by customers, capacity, cyclical customer demands,
new product introductions, pricing, the allocation of available products among
customers, expected shipments during 1996, competitiveness through research and
development and technology and source of supply; (iii) "Messaging, Information
and Media Sector," about the allocation of frequencies, development of
technologies, growth, expected shipments during 1996, and competitiveness;
(iv) "Land Mobile Products Sector," about the loss of or reduction in purchases
by customers, the allocation and regulations of frequencies, expected shipments
during 1996, competitiveness through research and development and technology
and the availability of supplies; (v) "Government and Space Technology Group"
about the U.S. government as a customer, competitiveness, the contribution of
the Diversified Technology Group, the impact of the Company's investment in
Iridium, Inc. and the availability of supplies; (vi) "Automotive, Energy and
Controls Group," about the loss of or reduction in purchases by customers and
the availability of supplies and the availability of supplies; (vii) "Backlog,"
about expected shipments during 1996; and (viii) "Miscellaneous," about
seasonality, large system orders, and the growth from products.
<PAGE>
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Motorola wishes to caution readers that in addition to the important factors
described elsewhere in this Form 10-K, the following important factors, among
others, sometimes have affected, and in the future could affect, Motorola's
actual results and could cause Motorola's actual consolidated results during
1996, and beyond, to differ materially from those expressed in any forward-
looking statements made by, or on behalf of Motorola:
- - Underutilization of Motorola's plants and factories, or of any plant
expansions or new plants, including, but not limited to, those in the
Semiconductor Products Segment, resulting in production inefficiencies and
higher costs; start-up expenses and inefficiencies and delays and increased
depreciation costs in connection with the start of production in new plants
and expansions, including but not limited to, those in the Semiconductor
Products Segments;
- - Motorola's actions in connection with continued and increasing competition
in many product areas, including, but not limited to, cellular subscriber
products and including price competition; fluctuating demand for certain
products in certain seasons, such as paging and cellular subscriber
products, as more products are sold to the consumer market; and the focus
by some of Motorola's businesses - in particular, the cellular
infrastructure and land mobile products businesses - on large system
orders, which could result in fluctuating results from quarter to quarter;
- - Difficulties in obtaining raw materials, supplies, power and natural
resources and any other items needed for the production of semiconductors
and other products, and capacity constraints which could limit the amounts
of orders the Semiconductor Products Segment and other segments can accept
for certain products, causing effects on Motorola's ability to ship paging
products, cellular phones and other products;
Difficulties or delays in the development, production, testing and
marketing of products, including, but not limited to, a failure to ship new
products and technologies when anticipated, including, but not limited to,
two-way and voice paging, CDMA for cellular and PCS
<PAGE>
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systems, wireless local loop, telephony and high-speed data for cable and
integrated dispatch radio, the failure of customers to accept these
products or technologies when planned, any defects in products and a
failure of manufacturing economies to develop when planned;
Risks related to the IRIDIUM-Registered Trademark- project, including any
software, technological or market acceptance issues, performance failures
or other difficulties by a party to any IRIDIUM-Registered Trademark-
related contracts or subcontracts, including any failure of Iridium, Inc.
to receive additional financing needed for Iridium, Inc. to continue to
make payments, or any events which would require Motorola to provide
additional financial support for Iridium, Inc. as well as the amount of
reserves related to the Iridium project, and changes to those reserves;
The effects of, and changes in, laws and regulations, other activities of
governments, agencies and similar organizations, including, but not limited
to, those affecting frequency, use and availability of spectrum
authorizations and licensing; and
The costs and other effects of legal and administrative cases and
proceedings (whether civil, such as environmental and product-related, or
criminal), settlements and investigations, claims, and changes in those
items, and developments or assertions by or against Motorola relating to
intellectual property rights and intellectual property licenses.
Certain portions of Motorola's Proxy Statement for the 1996 annual meeting of
stockholders with Management's Discussion and Analysis and Consolidated
Financial Statement are incorporated by reference into this Form 10-K. There
are additional important factors included therein, including those beginning on
page F-10 of the attachment to Motorola's Proxy Statement for the 1996 annual
meeting of stockholders, that sometimes have affected, and in the future could
affect, Motorola's actual results and could cause Motorola's actual consolidated
results during 1996, and beyond, to differ materially from those expressed in
any forward-looking statements made by, or on behalf of Motorola.
<PAGE>
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(d) Financial information about foreign and domestic operations and export
sales.
Domestic export sales to third parties were $3.59 billion in 1995, $2.97 billion
in 1994 and $1.83 billion in 1993. Domestic export sales to affiliates were
$6.64 billion in 1995, $4.40 billion in 1994 and $3.16 billion in 1993.
The remainder of the response to this section of Item 1 is incorporated by
reference to Note 7 of the Notes to the Consolidated Financial Statements and
the "1995 Compared With 1994 "and "1994 Compared With 1993" sections of
Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in the attachment to Motorola's Proxy Statement for the
1996 annual meeting of stockholders.
Item 2: Properties
Motorola's principal executive offices are located at 1303 East Algonquin Road,
Schaumburg, Illinois 60196. Its other major facilities in the United States are
located in Arlington Heights, Buffalo Grove, Grayslake, Lake Zurich,
Libertyville, Northbrook, Schaumburg and Vernon Hills, Illinois; Elma, New York;
Phoenix, Chandler, Scottsdale, Mesa and Tempe, Arizona; Boynton Beach and
Plantation, Florida; Atlanta, Georgia; Austin, Ft. Worth and Seguin, Texas;
Mount Pleasant, Iowa; Mansfield, Massachusetts; Huntsville, Alabama; Research
Triangle Park, North Carolina; Albuquerque, New Mexico; Carlisle, Pennsylvania;
and Irvine and San Jose, California. Motorola also operates manufacturing
facilities or sales offices in 39 other countries. (See "Narrative Description
of Business" for information regarding the location of the principal
manufacturing facilities for each industry segment.) Motorola owns 129
facilities (manufacturing, sales, service and office, 73 of which are located in
the United States and 56 of which are located in other countries. Motorola
leases 510 such facilities, 298 of which are located in the United States and
212 of which are located in other countries.
Motorola generally considers the productive capacity of the plants operated by
each of its industry segments adequate and suitable for the
<PAGE>
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requirements of each of such segments, except for the Semiconductor Products
Sector which is engaged in a factory expansion program to meet the strong market
demand for its products. Motorola is also adding production capacity for its
General Systems Sector.
The extent of utilization of such manufacturing facilities varies from plant to
plant and from time to time during the year.
Item 3: Legal Proceedings
Motorola is a named defendant in eight cases arising out of alleged
groundwater, soil and air pollution in Phoenix and Scottsdale, Arizona.
MCINTIRE ET AL. V. MOTOROLA, CAMELHEAD EQUITIES ET AL. V. MOTOROLA ET AL.,
and FARR V. MOTOROLA are pending in the U.S. District Court for the District
of Arizona. BAKER ET AL. V. MOTOROLA ET AL., LOFGREN ET AL. V. MOTOROLA ET
AL., BENTANCOURT ET AL. V. MOTOROLA ET AL., FORD ET AL. V. MOTOROLA ET AL.
and WILKINS ET AL. V. MOTOROLA ET AL. are pending in the Arizona Superior
Court, Maricopa County. The MCINTIRE lawsuit involves approximately 925
plaintiffs (325 personal injury, 125 property damage, and 475 personal injury
and property damage) who allege that the operations of Motorola at several
facilities in Phoenix and Scottsdale, Arizona have caused property damage and
health problems by contaminating the soil, groundwater and air in the area
surrounding those facilities. FARR is a personal injury and wrongful death
case, filed on November 17, 1995, based on like allegations of environmental
contamination. CAMELHEAD EQUITIES, filed on June 1, 1993, is a suit for
business losses by four failed real estate development limited partnerships
alleging that groundwater contamination caused property damage and the
failure of their real estate development. The District Court granted
Motorola's motion for summary judgment on September 29, 1995. The
plaintiffs' appeal to the United States Court of Appeals for the Ninth
Circuit has been stayed pending resolution of plaintiffs' motion for
rehearing in the District Court. The BAKER lawsuit, filed on February 11,
1992, is a class action, involving six representative individual named
plaintiffs, alleging that Motorola and 28 other defendants contaminated the
soil, air and groundwater in the Phoenix/Scottsdale area, diminishing
property values and exposing members of the class to possible adverse health
effects. On August 24,
<PAGE>
-26-
1994, the BAKER court certified two classes, a property damage class consisting
of all persons who were residents, property owners or lessees of property which
overlies, or is adjacent to, the alleged groundwater pollution, and a medical
monitoring class consisting of all persons who resided in Phoenix and/or
Scottsdale for more than one year continuously during the years between 1955 and
1989, and who received potable drinking water containing trichloroethylene at a
level equal to or exceeding 2.0 parts per billion, on average. The LOFGREN,
BENTANCOURT, FORD and WILKINS lawsuits, filed on April 6, 1993, July 16, 1993,
June 10, 1994 and July 19, 1995, respectively, have been consolidated. The
consolidated cases involve approximately 180 plaintiffs, alleging that Motorola
and 31 other defendants contaminated the soil, air and groundwater in the
Phoenix/Scottsdale area, causing health problems.
All eight lawsuits seek compensatory and punitive damages. The MCINTIRE
complaint includes personal injury and property damage claims and seeks
injunctive relief. The BAKER complaint seeks damages for medical monitoring and
alleges claims for property, business and economic loss and seeks declaratory
and injunctive relief.
Motorola and several of its directors and officers are named defendants in a
consolidated alleged class action for alleged violations of Section 10(b) and
20(a) of the Securities Exchange Act and SEC Rule 10b-5, KAUFMAN, ET AL. V.
MOTOROLA, INC. ET AL., which is pending in the U.S. District Court for the
Northern District of Illinois. Plaintiffs maintain that Motorola and the
individual defendants committed a fraud on the securities market by
artificially inflating the price of Motorola stock. Plaintiffs propose a
class period of November 4, 1994 through February 17, 1995, and seek an
unspecified amount of damages.
A class action, IN RE NEXTEL COMMUNICATIONS SECURITIES LITIGATION, against
Nextel Communications, Inc., certain of its officers and directors and Motorola
for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and SEC Rule 10b-5, is pending in the United States District Court
for the District of New Jersey. The pending complaint, a consolidation of cases
previously filed against Nextel, was
<PAGE>
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filed on July 11, 1995 and maintains that the defendants artificially inflated
the price of Nextel common stock through a series of alleged misrepresentations
and omissions. Plaintiffs propose a class period of July 22, 1993 through
January 10, 1995 and seek an unspecified amount of monetary damages.
Motorola is a defendant in several cases arising out of the Company's
manufacture and sale of portable cellular telephones. VERB, ET AL. V.
MOTOROLA, INC., ET AT., Circuit Court of Cook County, Illinois, 93 L 3238, is
a purported class action by purchasers of portable cellular phones against
the Company and seven other corporate defendants, alleging economic loss; the
trial court's dismissal of this matter is on appeal to the Illinois Appellate
Court. SCHIFFNER V. MOTOROLA, INC., Circuit Court of Cook County, Illinois,
95 CH 1879, is another economic loss purported class action by purchasers of
portable cellular phones. CRIST V. MOTOROLA, INC. ET AL., Circuit Court of
Cook County, Illinois, 94 CH 1077, WARD V. MOTOROLA, INC., ET AL., State
Court of Fulton County, Georgia, 94 VS 91470, where the trial court's denial
of Motorola's motion for summary judgment is on appeal to the Georgia Court
of Appeals, WRIGHT V. MOTOROLA, ET. AL., Circuit Court of Cook County,
Illinois, 95 LD 4929, KANE, ET. AL., V. MOTOROLA, INC., ET. AL., Circuit
Court of Cook County, Illinois, 93 L 15256, RITTMAN, ET. AL. V. MOTOROLA,
INC., ET. AL., District Court for Tarrant County, Texas, 348-160584-96, and
CHRISTOPHER V. MOTOROLA, INC., United States District court for the Northern
District of Ohio, 95 CV 2100, are cases where individuals allege that brain
cancer was caused by or aggravated by the use of a cellular telephone.
JERALD P. BUSSE, INDIVIDUALLY, AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED V.
MOTOROLA, INC., ET. AL., Circuit Court of Cook County, Illinois, Chancery
Division, 95 CH 10332, is a purported class action wherein it is alleged that
cellular phones have not been proven safe and that the defendants have failed to
adequately warn consumers of the alleged dangers of using cellular telephones.
PENNSYLVANIA BANCSHARES, INC. ET. AL. V. MOTOROLA, INC., ET. AL., Court of
Common Pleas, Montgomery County, Pennsylvania, 9519136, is a purported class
action wherein it is alleged that Motorola, Inc. systematically engages in
deceptive trade practices, including without limitation, intentionally
misrepresenting the quality of certain types of cellular telephones.
<PAGE>
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The information contained in Management's Discussion and Analysis of Financial
Condition and Results of Operations under the caption "Environmental Matters"
and in Note 6 of the Notes to the Consolidated Financial Statements under the
caption "Environmental and Legal" contained in the attachment to Motorola's
Proxy Statement for the 1996 annual meeting of stockholders is incorporated
herein by reference.
Motorola is a defendant in various other suits, claims and investigations which
arise in the normal course of business. In the opinion of management, the
ultimate disposition of these matters, including those matters described above
in this Item 3, will not have a material adverse effect on the consolidated
financial position, liquidity or results of operations of Motorola.
Item 4: Submission of Matters to a Vote of Security Holders
Not applicable.
Executive Officers of the Registrant
Following are the persons who were the executive officers of Motorola as of
December 31, 1995, their ages as of December 31, 1995, their current titles and
positions held during the last five years:
Gary L. Tooker; age 56; Vice Chairman of the Board and Chief Executive Officer
since December 1993; President and Acting Chief Executive Officer from October
1993 to December 1993; and President and Chief Operating Officer from January
1990 to October 1993.
Christopher B. Galvin; age 45; President and Chief Operating Officer since
December 1993; and Senior Executive Vice President and Assistant Chief Operating
Officer from January 1990 to December 1993.
Robert W. Galvin; age 73; Chairman of the Executive Committee of the Board of
Directors since January 1990.
<PAGE>
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Keith J. Bane; age 56; Executive Vice President and Chief Corporate Staff
Officer since February 1995; Senior Vice President and Chief Corporate Staff
Officer from August 1994 to February 1995; Senior Vice President and Motorola
Director of Strategy, Technology and External Relations from October 1993 to
August 1994; and Senior Vice President and Motorola Director of Strategy from
November 1988 to October 1993.
Arnold S. Brenner; age 58; Executive Vice President and General Manager, Japan
Group since November 1988.
Thomas D. George; age 55; Executive Vice President, and President and General
Manager, Semiconductor Products Sector since April 1993; Executive Vice
President and Assistant General Manager, Semiconductor Products Sector from
November 1992 to April 1993; and Senior Vice President and Assistant General
Manager, Semiconductor Products Sector from July 1986 to November 1992.
Glenn A. Gienko; age 43; Senior Vice President and Director of Human Resources
since June 1995; Corporate Vice President Human Resources, General Systems
Sector from February 1994 to June 1995; and Vice President Human Resources,
General Systems Sector from June 1990 to February 1994.
Merle L. Gilmore; age 47; Executive Vice President, President and General
Manager, Land Mobile Products Sector ("LMPS"), since July 1994; Senior Vice
President and President and General Manager, LMPS, from June 1994 to July 1994;
Senior Vice President and Assistant General Manager, LMPS, from July 1992 to
June 1994; Senior Vice President and General Manger, Worldwide Radio Products
Group, LMPS, from May 1991 to July 1992; Corporate Vice President and General
Manager, Worldwide Radio Products Group, Communications Sector, from January
1991 to May 1991; and Corporate Vice President and General Manager, Portable
Products Division, Communications Sector, from April 1989 to January 1991.
Robert L. Growney; age 53; Executive Vice President, and President and General
Manager, Messaging, Information and Media Sector since January 1994; Executive
Vice President and General Manager, Paging and Wireless Data Group from
September 1992 to January 1994; Senior Vice President
<PAGE>
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and General Manager, Paging and Telepoint Systems Group from January 1991 to
September 1992; and Senior Vice President and General Manager, Radio
Technologies Group, Communications Sector from May 1989 to January 1991.
Carl F. Koenemann; age 57; Executive Vice President and Chief Financial Officer
since December 1991; and Senior Vice President and Assistant Chief Financial
Officer from May 1990 to December 1991.
James A. Norling; age 53; Executive Vice President, and President, Motorola
Europe, Middle East and Africa since April 1993; and Executive Vice President,
and President and General Manager, Semiconductor Products Sector from December
1989 to April 1993.
Edward F. Staiano; age 59; Executive Vice President, and President and General
Manager, General Systems Sector since December 1989.
Frederick T. Tucker; age 55; Executive Vice President and President and General
Manager, Automotive, Energy and Controls Group since September 1992; and Senior
Vice President and General Manager, Automotive and Industrial Electronics Group
from April 1988 to September 1992.
Richard H. Weise; age 60; Senior Vice President, General Counsel and Secretary
since November 1985. Mr. Weise relinquished his position as Senior Vice
President and General Counsel in February 1996. He will continue as Secretary,
however.
Richard W. Younts; age 56; Executive Vice President and Corporate Executive
Director International-Asia and Americas since December 1993; Senior Vice
President and Corporate Executive Director, International-Asia and Americas from
July 1991 to December 1993; Senior Vice President and President, Nippon Motorola
Ltd., Japan Group from May 1991 to July 1991; and Corporate Vice President and
President, Nippon Motorola Ltd. from August 1987 to May 1991.
The above executive officers will serve as officers of Motorola until the
regular meeting of the Board of Directors in May 1996 or until their respective
successors shall have been elected. Christopher B. Galvin is a
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son of Robert W. Galvin. There is no family relationship between any of the
other executive officers listed above.
PART II
Item 5: Market for Registrant's Common Equity and Related Stockholder Matters
Motorola's Common Stock is listed on the New York, Chicago, London and Tokyo
Stock Exchanges. The remainder of the response to this Item is incorporated by
reference to the information under the caption "Quarterly and Other Financial
Data" of Motorola's Consolidated Financial Statements contained in the
attachment to Motorola's Proxy Statement for the 1996 annual meeting of
stockholders.
Item 6: Selected Financial Data
The response to this Item is incorporated by reference to the information under
the caption "Five Year Financial Summary" of Motorola's Consolidated Financial
Statements contained in the attachment to Motorola's Proxy Statement for the
1996 annual meeting of stockholders.
Item 7: Management's Discussion and Analysis of Financial Condition and
Results of Operations
The response to this Item is incorporated by reference to the information under
the caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained in the attachment to Motorola's Proxy Statement
for the 1996 annual meeting of stockholders.
Item 8: Financial Statements and Supplementary Data
The response to this Item is incorporated by reference to the information under
the captions "Management's Responsibility For Financial
<PAGE>
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Statements", "Independent Auditors' Report", "Statements of Consolidated
Earnings", "Statements of Consolidated Stockholders' Equity", "Consolidated
Balance Sheets", "Statements of Consolidated Cash Flows", "Supplemental Cash
Flow Information", "Notes to Consolidated Financial Statements", "Quarterly and
Other Financial Data" and "Five Year Financial Summary" of Motorola's
Consolidated Financial Statements contained in the attachment to Motorola's
Proxy Statement for the 1996 annual meeting of stockholders.
Item 9: Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10: Directors and Executive Officers of the Registrant
The response to this Item required by Item 401 of Regulation S-K, with respect
to directors, is incorporated by reference to the information under the caption
"Nominees" on pages 1 through 5 of Motorola's Proxy Statement for the 1996
annual meeting of stockholders and with respect to executive officers, is
contained in Part I hereof under the caption "Executive Officers of the
Registrant". The response to this Item required by Item 405 of Regulation S-K
is incorporated by reference to the information under the caption "Security
Ownership of Management of the Company" on pages 8 and 9 of Motorola's Proxy
Statement for the 1996 annual meeting of stockholders.
Item 11: Executive Compensation
The response to this Item is incorporated by reference to the information under
the caption "Director Compensation" on page 7 of Motorola's Proxy Statement for
the 1996 annual meeting of stockholders and "Summary Compensation Table," "Stock
Option Grants in 1995," "Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values," "Long-
<PAGE>
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Term Incentive Plans - Awards in Last Fiscal Year," "Pension and Supplementary
Retirement Plans," and "Termination of Employment and Change in Control
Arrangements" on pages 9 through 12 of Motorola's Proxy Statement for the 1996
annual meeting of stockholders.
Item 12: Security Ownership of Certain Beneficial Owners and Management
The response to this Item is incorporated by reference to the information under
the caption "Security Ownership of Management of the Company" on pages 8 and 9
of Motorola's Proxy Statement for the 1996 annual meeting of stockholders.
Item 13: Certain Relationships and Related Transactions
The response to this Item is incorporated by reference to the information under
the caption "Director Compensation" on page 7 of Motorola's Proxy Statement for
the 1996 annual meeting of stockholders.
PART IV
Item 14: Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements
See Part II, Item 8 hereof.
2. Financial Statement Schedule and Auditors' Report
TITLE SCHEDULE
----- --------
Valuation and Qualifying Accounts. . . . . . . .II
All schedules omitted are inapplicable or the information required is shown
in the Consolidated Financial Statements or notes thereto.
<PAGE>
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The auditors' report of KPMG Peat Marwick LLP with respect to the Financial
Statement Schedule is located at page 35.
3. Exhibits
Exhibits required to be attached by Item 601 of Regulation S-K are listed
in the Exhibit Index attached hereto, which is incorporated herein by this
reference. Following is a list of management contracts and compensatory
plans and arrangements required to be filed as exhibits to this form by
Item 14(c) hereof:
Motorola Executive Incentive Plan ("MEIP")
Motorola Long Range Incentive Plan of 1994
Share Option Plan of 1982
Share Option Plan of 1991
Motorola Elected Officers Supplementary Retirement Plan
Officers Supplemental Medical Plan
Accidental Death and Dismemberment Insurance for MEIP
Participants
Arrangement for Directors' Fees
Retirement Plan for Non-employee Directors
Deferred Fee Plan for Outside Directors
Officers' Group Life Insurance Policy
Consultant Agreement with John F. Mitchell
Form of Termination Agreement
Policy Protecting Salary and Medical Benefits
Insurance Policy for Non-employee Directors
Motorola, Inc. Non-Employee Directors' Stock Plan
(b) Reports on Form 8-K. Motorola filed no reports on Form 8-K during the last
quarter of 1995.
(c) Exhibits See Item 14(a)3 above.
<PAGE>
-35-
KPMG PEAT MARWICK LLP
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors and Stockholders
of Motorola, Inc.:
Under date of January 9, 1996, except for Note 6, which is as of February 16,
1996, we reported on the consolidated balance sheets of Motorola, Inc. and
consolidated subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of earnings, stockholders' equity, and cash flows for
each of the years in the three-year period ended December 31, 1995, as contained
in the 1995 proxy statement to stockholders. These consolidated financial
statements and our report thereon are incorporated by reference in the annual
report on Form 10-K for the year 1995. In connection with our audits of the
aforementioned consolidated financial statements, we also have audited the
related financial statement schedule as listed in Part IV, Item 14(a)2. The
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion on the financial statement schedule
based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.
/s/ KPMG Peat Marwick LLP
January 9, 1996
Chicago, Illinois
<PAGE>
-36-
Motorola, Inc. and Subsidiaries Schedule II
Valuation and Qualifying Accounts
Three Years Ended December 31, 1995
(In millions)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- --------------------------------------------------------------------------------------------------------------------------
ADDITIONS
Balance at --------------------------------- Balance
beginning Charged to Charged to at end
Of period costs & expenses other accounts Deductions of period
- --------------------------------------------------------------------------------------------------------------------------
1995
- ----
<S> <C> <C> <C> <C> <C>
Allowance for doubtful accounts $118 $ 45 --- $ 40 (1) $123
Product and service warranties 283 122 --- 96 (2) 309
1994
- ----
Allowance for doubtful accounts $ 91 $ 48 --- $ 21 (1) $118
Product and service warranties 166 195 --- 78 (2) 283
1993
- ----
Allowance for doubtful accounts $ 69 $ 54 --- $ 32 (1) $ 91
Product and service warranties 117 110 --- 61 (2) 166
</TABLE>
(1) Uncollectible accounts written off
(2) Warranty claims paid
<PAGE>
-37-
KPMG Peat Marwick LLP
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors
of Motorola, Inc.:
We consent to incorporation by reference in the registration statements on Form
S-8 (Nos. 33-40876 and 33-58714) and Form S-3 (No. 33-62911) of Motorola, Inc.
and consolidated subsidiaries of our reports dated January 9, 1996, except for
Note 6, which is as of February 16, 1996, relating to the consolidated balance
sheets of Motorola, Inc. and consolidated subsidiaries as of December 31, 1995
and 1994, and the related statements of consolidated earnings, stockholders'
equity, and cash flows and related financial statement schedule for each of the
years in the three-year period ended December 31, 1995, which reports appear in
or are incorporated by reference in the annual report on Form 10-K of Motorola,
Inc. for the year ended December 31, 1995.
/s/ KPMG Peat Marwick LLP
March 19, 1996
Chicago, Illinois
<PAGE>
-38-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Motorola, Inc. has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
March 14, 1996
MOTOROLA, INC.
By: /S/ GARY L. TOOKER
-----------------------------
Gary L. Tooker
Vice Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Motorola, Inc. and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ GARY L. TOOKER Director and Principal 3/14/96
- ------------------------ Executive Officer
Gary L. Tooker
/S/ CARL F. KOENEMANN Principal Financial 3/6/96
- ------------------------ Officer
Carl F. Koenemann
/S/ KENNETH J. JOHNSON Principal Accounting 3/12/96
- ------------------------ Officer
Kenneth J. Johnson
</TABLE>
<PAGE>
-39-
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ DAVID R. CLARE Director 3/6/96
- --------------------------
David R. Clare
/S/ H. LAURANCE FULLER
- -------------------------- Director 3/18/96
H. Laurance Fuller
/S/ CHRISTOPHER B. GALVIN Director 3/14/96
- --------------------------
Christopher B. Galvin
/S/ ROBERT W. GALVIN Director 3/7/96
- --------------------------
Robert W. Galvin
/S/ JOHN T. HICKEY Director 3/7/96
- --------------------------
John T. Hickey
/S/ ANNE P. JONES Director 3/2/96
- --------------------------
Anne P. Jones
/S/ DONALD R. JONES Director 3/6/96
- --------------------------
Donald R. Jones
/S/ JUDY C. LEWENT Director 3/4/96
- --------------------------
Judy C. Lewent
<PAGE>
-40-
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ WALTER E. MASSEY Director 3/6/96
- --------------------------
Walter E. Massey
/S/ JOHN F. MITCHELL Director 3/6/96
- --------------------------
John F. Mitchell
/S/ THOMAS J. MURRIN Director 3/2/96
- --------------------------
Thomas J. Murrin
/S/ JOHN E. PEPPER, JR. Director 3/6/96
- --------------------------
John E. Pepper, Jr.
/S/ SAMUEL C. SCOTT III Director 3/9/96
- --------------------------
Samuel C. Scott III
/S/ GARDINER L. TUCKER Director 3/4/96
- --------------------------
Gardiner L. Tucker
/S/ WILLIAM J. WEISZ Director 3/7/96
- --------------------------
William J. Weisz
/S/ B. KENNETH WEST Director 3/3/96
- --------------------------
B. Kenneth West
/S/ JOHN A. WHITE Director 3/1/96
- --------------------------
John A. White
</TABLE>
<PAGE>
-41-
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
- ----------- -------
3(i) Restated Certificate of Incorporation of Motorola, Inc., including
Certificate of Designation, Preferences and Rights for Junior
Participating Preferred Stock, Series A (incorporated by reference to
Exhibit 3(i)(b) to Motorola's Quarterly Report on Form 10-Q for the
fiscal quarter ended April 2, 1994).
3(ii) By-Laws of Motorola, Inc., revised as of February 6, 1996.
4.1 Rights Agreement dated November 9, 1988 (incorporated by reference to
Exhibit (1) to Motorola's Registration Statement on Form 8-A dated
November 15, 1988).
4.2 Amendment to Rights Agreement dated August 7, 1990 (incorporated by
reference to Exhibit 2 to Motorola's Form 8 dated August 9, 1990
amending Motorola's Registration Statement on Form 8-A dated November
15, 1988).
4.3 Amendment No. 2 on Form 8 dated December 2, 1992 amending Motorola's
Registration Statement on Form 8-A dated November 15, 1988 (incorporated
by reference to Motorola's Form 8 dated December 2, 1992).
4.3(a) Amendment No. 3 on Form 8-A/A dated February 28, 1994 amending
Motorola's Registration Statement on Form 8-A dated November 15, 1988
(incorporated by reference to Motorola's Amendment No. 3 Form 8-A/A
dated February 28, l994).
4.4 LYONs Indenture dated September 1, 1989 (incorporated by reference to
Exhibit 4(a) to Motorola's Registration Statement on Form S-3,
Registration No. 33-30662).
<PAGE>
-42-
EXHIBIT NO. EXHIBIT
- ----------- -------
4.5 Indenture dated as of March 15, 1985 between Motorola, Inc. and Harris
Trust and Savings Bank, as Trustee, and specimen of 8.40% Debentures due
August 5, 2031 under the Indenture (incorporated by reference to
Exhibits 4(C) and 4(B), respectively, to Motorola's Current Report on
Form 8-K dated August 12, 1991).
4.6 Indenture dated as of October 1, 1991 between Motorola, Inc. and Harris
Trust and Savings Bank, as Trustee (incorporated by reference
to Exhibit 4.5 to Motorola's Annual Report on Form 10-K for the fiscal
year ended December 31, 1991).
4.7 Specimen of 7.60% Notes due January 1, 2007 (incorporated by reference
to Exhibit 4.6 to Motorola's Annual Report on Form 10-K for the fiscal
year ended December 31, 1991).
4.8 Specimen of 6 1/2% Notes due March 1, 2008 (incorporated by reference to
Exhibit 4(B) to Motorola's Current Report on Form 8-K dated March 1,
1993).
4.9 LYONs Indenture dated September 1, 1993 (incorporated by reference to
Exhibit 4(v) to Motorola's Quarterly Report on Form 10-Q for the quarter
ended October 2, 1993.
4.10 Indenture dated as of May 1, 1995 between Motorola, Inc. and Harris
Trust and Savings Bank, as Trustee (incorporated by reference to Exhibit
4(d) to Motorola's Registration Statement on Form S-3, Registration No.
33-56055.
4.11 Specimen of 7 1/2% Debentures due May 15, 2025 (incorporated by
reference to Exhibit 4(B) to Motorola's Current Report on Form 8-K dated
May 15, 1995).
4.12 Specimen of 6 1/2% Debentures due September 1, 2025.
<PAGE>
-43-
EXHIBIT NO. EXHIBIT
- ----------- -------
10.1 Motorola Executive Incentive Plan, as amended through November 23, 1993,
including the Long Range Incentive Program (incorporated by reference to
Exhibit 10.1 to Motorola's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993).
10.2 Motorola Long Range Incentive Plan of 1994 (incorporated by reference to
Exhibit 10.2 to Motorola's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993).
10.3 Share Option Plan of 1982, as amended through March 24, 1992
(incorporated by reference to Exhibit 10.3 to Motorola's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990, Exhibit
10.2(a) to Motorola's Annual Report on Form 10-K for the fiscal year
ended December 31, 1991 and Exhibit 10.3 to Motorola's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992).
10.4 Resolution Amending Section 4 of the Share Option Plan of 1991,
effective August 7, 1995.
10.5 Motorola Elected Officers Supplementary Retirement Plan, as amended
through February 6, 1995 (incorporated by reference to Exhibit 10.5 to
Motorola's Annual Report on Form 10-K for the fiscal year ended December
31, 1994).
10.6 Officers supplemental medical plan (incorporated by reference to Exhibit
10.6 to Motorola's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990).
10.7 Accidental death and dismemberment insurance for MEIP participants
(incorporated by reference to Exhibit 10.7 to
Motorola's Annual Report on Form 10-K for the fiscal year ended December
31, 1990).
<PAGE>
-44-
EXHIBIT NO. EXHIBIT
- ----------- -------
10.8 Arrangement for directors' fees and retirement plan for non-employee
directors (description incorporated by reference from page 7 of
Motorola's Proxy Statement for the 1996 annual meeting of stockholders).
10.9 Deferred Fee Plan for Outside Directors, as amended February 6, 1996.
10.10 Officers' Group Life Insurance Policy (incorporated by reference to
Exhibit 10.10 to Motorola's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990).
10.11 Consultant Agreement dated May 1, 1995 between Motorola, Inc. and John
F. Mitchell (incorporated by reference to Exhibit 10 to Motorola's
Quarterly Report on Form 10-Q for the quarter ended July 1, 1995).
10.12 Form of Termination Agreement in respect of a change in control
(incorporated by reference to Exhibit 10.15 to Motorola's Annual Report
on Form 10-K for the fiscal year ended December 31, 1989).
10.13 Policy protecting salary and medical benefits of employees in the event
of an unsolicited change in control (incorporated by reference to
Exhibit 10.16 to Motorola's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990).
10.14 Insurance policy covering non-employee Directors (incorporated by
reference to the description on page 7 of Motorola's Proxy Statement for
the 1996 annual meeting of stockholders and to Exhibit 10.16 to
Motorola's Annual Report on Form 10-K for the fiscal year ended December
31, 1989).
<PAGE>
-45-
EXHIBIT NO. EXHIBIT
- ----------- -------
10.15 Iridium Space System Contract between Motorola, Inc. and Iridium, Inc.,
as amended to date, and Iridium Communications Systems Operations and
Maintenance Contract between Motorola, Inc. and Iridium, Inc., as
amended to date (incorporated by reference to Exhibits 99.2 and 99.3,
respectively, to Motorola's Current Report on Form 8-K dated August 2,
1993 and Exhibits 99(a) and 99(b), respectively, to Motorola's Quarterly
Report on Form 10-Q for the quarter ended October 1, 1994).
11 Motorola, Inc. and Consolidated Subsidiaries Primary and Fully Diluted
Earnings Per Common and Common Equivalent Share.
21 Subsidiaries of Motorola.
23 Consent of KPMG Peat Marwick. See page 37 of the Annual Report on Form
10-K of which this Exhibit Index is a part.
27 Financial Data Schedule (filed only electronically with SEC).
<PAGE>
Exhibit 3(ii)
Revised as of February 6, 1996
MOTOROLA, INC.
BYLAWS
ARTICLE I
OFFICES AND CORPORATE SEAL
The registered office of the Corporation required by the Delaware General
Corporation Law shall be 1209 Orange Street, Wilmington, Delaware, 19801, and
the address of the registered office may be changed from time to time by the
Board of Directors.
The principal business office of the Corporation shall be located in the
Village of Schaumburg, County of Cook, State of Illinois. The Corporation may
have such other offices, either within or without the State of Illinois, as the
Board of Directors may designate or as the business of the Corporation may
require from time to time.
The registered office of the Corporation required by the Illinois Business
Corporation Act may be, but need not be, the same as its place of business in
the State of Illinois, and the address of the registered office may be changed
from time to time by the Board of Directors.
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the Corporation
and the state of incorporation and the words "Corporate Seal".
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of the Corporation
shall be managed by, or under the direction of, its Board of Directors.
<PAGE>
- 2 -
SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors of
the Corporation shall be sixteen (16), or such other number fixed from time to
time by the Board of Directors. Each director shall hold office until his
successor shall have been elected and qualified, or until his earlier death or
resignation.
SECTION 3. VACANCIES. Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of directors, may be
filled for the remainder of the unexpired term by the affirmative vote of a
majority of the directors then in office although less than a quorum.
SECTION 4. COMPENSATION. Directors who also are employees of the
Corporation shall not receive any additional compensation for services on the
Board of Directors. By resolution of the Board of Directors, a fixed sum may be
allowed directors who are not employees of the Corporation for attendance at
each regular or special meeting of the Board of Directors or any committee of
the Board of Directors, and by resolution of the Board of Directors an
additional fixed fee may be allowed directors who are not employees of the
Corporation in consideration of other services and continuous interest and study
of the affairs of the Corporation. Travel and other expenses actually incurred
may be allowed all directors for attendance at each regular or special meeting
of the Board of Directors or at any meeting of a committee of the Board of
Directors or in connection with their other services to the Corporation.
Nothing herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor.
SECTION 5. COMMITTEES OF DIRECTORS. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees. Each committee shall consist of one or more of the directors of the
Corporation, as selected by the Board of Directors, and the Board of Directors
shall also designate a chairman of each committee and the members of each
committee shall designate a person to act as secretary of the committee to keep
the minutes of, and serve the notices for, all meetings of the committee and
perform such other duties as the committee may direct. Such person may, but
need not be a member of the committee. Any such committee,
<PAGE>
- 3 -
to the extent provided in a resolution of the Board of Directors, shall have and
may exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it; but no
such committee shall have the power and authority of the Board of Directors in
reference to amending the Certificate of Incorporation, adopting an agreement of
merger or consolidation under Section 251 or 252 of the Delaware General
Corporation Law, recommending to the shareholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets, recommending
to the shareholders a dissolution of the Corporation or a revocation of a
dissolution, or amending the Bylaws of the Corporation, and, unless the
resolution expressly so provides, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock or to
adopt a certificate of ownership and merger pursuant to Section 253 of the
Delaware General Corporation Law. Each committee of the Board of Directors may
establish its own rules of procedure. Except as otherwise specified in a
resolution designating a committee, one-third of the members of a committee
shall be necessary to constitute a quorum of that committee for the transaction
of business and the act of a majority of committee members present at a meeting
at which a quorum is present shall be the act of the committee.
SECTION 6. VALIDITY OF CONTRACTS. No contract or other transaction
entered into by the Corporation shall be affected by the fact that a director or
officer of the Corporation is in any way interested in or connected with any
party to such contract or transaction, or himself is a party to such contract or
transaction, even though in the case of a director the vote of the director
having such interest or connection shall have been necessary to obligate the
Corporation upon such contract or transaction; provided, however, that in any
such case (i) the material facts of such interest are known or disclosed to the
directors or shareholders and the contract or transaction is authorized or
approved in good faith by the shareholders or by the Board of Directors or a
committee thereof through the affirmative vote of a majority of the
disinterested
<PAGE>
- 4 -
directors (even though not a quorum), or (ii) the contract or transaction is
fair to the Corporation as of the time it is authorized, approved or ratified by
the shareholders, or by the Board of Directors, or by a committee thereof.
ARTICLE III
SHAREHOLDERS' MEETINGS
SECTION 1. PLACE OF MEETINGS. The Board of Directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special meeting called by the Board of
Directors. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal business office of the
Corporation in the State of Illinois.
SECTION 2. ANNUAL MEETINGS. The annual meeting of the shareholders shall
be held on the first Tuesday in the month of May in each year, at the hour of
5:00 o'clock P.M., or at such other day and hour as may be fixed by or under the
authority of the Board of Directors, for the purpose of electing directors and
for the transaction of such other business as may come before the meeting. If
the day fixed for the annual meeting shall be a legal holiday in the state where
the meeting is to be held, such meeting shall be held on the next succeeding
business day. If the election of directors shall not be held on the day
designated herein for the annual meeting of the shareholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be held
at a special meeting of the shareholders as soon thereafter as is convenient.
SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the Chairman of the Board or by the Board of Directors.
SECTION 4. VOTING - QUORUM. Each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders, except to the extent that the voting rights of any class or
classes are enlarged, limited or denied by the Certificate of Incorporation or
in the manner therein
<PAGE>
- 5 -
provided. A majority of the shares entitled to vote, represented in person or
by proxy, shall constitute a quorum at a meeting of shareholders. If a quorum
is present, the affirmative vote of a majority of the shares represented at the
meeting and entitled to vote on the subject matter shall be the act of the
shareholders, except that directors shall be elected by a plurality of the votes
of the shares represented at the meeting and entitled to vote on the election of
directors, except as otherwise required by Delaware law, the Certificate of
Incorporation, or these Bylaws. No matter shall be considered at a meeting of
shareholders except upon a motion duly made and seconded. If less than a
majority of the outstanding shares are represented at a meeting, a majority of
the shares so represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally called.
SECTION 5. PROXIES. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his duly authorized
attorney-in-fact. No proxy shall be valid after three years from the date of
its execution, unless otherwise provided in the proxy.
SECTION 6. NOTICE OF MEETINGS. Written notice stating the place, day and
hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
days (twenty days if the shareholders are to approve a merger or consolidation
or a sale, lease or exchange of all or substantially all the Corporation's
assets) nor more than sixty days before the date of the meeting, either
personally or by mail, by or at the direction of the Chairman of the Board, or
the Secretary, or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be given when deposited in the United States mail, addressed
to the shareholder at his address as it appears on the records of the
Corporation, with postage thereon prepaid.
<PAGE>
- 6 -
SECTION 7. VOTING LISTS. The officer or agent having charge of the stock
ledger of the Corporation shall make, at least ten days before each meeting of
shareholders, a complete list of the shareholders entitled to vote at such
meeting, or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each; which list, for a period of
ten days prior to such meeting, shall be kept at the place where the meeting is
to be held, or at another place within the city where the meeting is to be held,
which other place shall be specified in the notice of meeting and the list shall
be subject to inspection by any shareholder for any purpose germane to the
meeting, at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any shareholder during the whole time of the meeting. The
original stock ledger shall be prima facie evidence as to who are the
shareholders entitled to examine such list or ledger or to vote at any meeting
of shareholders.
SECTION 8. FIXING OF RECORD DATE. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other proper purpose, the
Board of Directors of the Corporation may fix in advance a date as the record
date for any such determination of shareholders, such date in any case to be not
more than sixty days and, in case of a meeting of shareholders, not less than
ten days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If no record date is fixed for
the determination of shareholders entitled to notice of or to vote at a meeting
of shareholders, or shareholders entitled to receive payment of a dividend, the
close of business on the date next preceding the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this
<PAGE>
- 7 -
Section, such determination shall apply to any adjournment thereof; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
SECTION 9. VOTING OF SHARES BY CERTAIN HOLDERS. Neither treasury shares
nor shares of the Corporation held by another corporation, if a majority of the
shares entitled to vote in the election of directors of such other corporation
is held, directly or indirectly, by the Corporation, shall be entitled to vote
or to be counted for quorum purposes. Nothing in this paragraph shall be
construed as limiting the right of the Corporation to vote its own stock held by
it in a fiduciary capacity.
Shares standing in the name of another corporation, domestic or foreign,
may be voted in the name of such corporation by any officer thereof or pursuant
to any proxy executed in the name of such corporation by any officer of such
corporation in the absence of express written notice filed with the Secretary
that such officer has no authority to vote such shares.
Shares held by an administrator, executor, guardian, conservator, trustee
in bankruptcy, receiver or assignee for creditors may be voted by him, either in
person or by proxy, without a transfer of such shares into his name. Shares
standing in the name of a fiduciary may be voted by him, either in person or by
proxy.
A shareholder whose shares are pledged shall be entitled to vote such
shares unless in the transfer by the pledgor on the books of the Corporation the
pledgor has expressly empowered the pledgee to vote thereon, in which case only
the pledgee, or his proxy, may represent such stock and vote thereon.
SECTION 10. ADVANCE NOTICE OF SHAREHOLDER NOMINATIONS AND PROPOSALS FOR
OTHER BUSINESS. Nominations of persons for election to the Board of Directors
and the proposal of business to be transacted by the shareholders may be made at
an annual or special meeting of the shareholders only (a) pursuant to the
Corporation's notice with respect to such meeting, (b) by or at the direction of
the Board of Directors or (c) by any shareholder of the Corporation who was a
shareholder of record on the record date set with respect to such meeting as
provided for in Section 8 of Article III, who is
<PAGE>
-8-
entitled to vote at the meeting and who has complied with the notice procedures
set forth in this Section 10. For nominations or proposals for other business
to be properly brought before an annual or special meeting by a shareholder
pursuant to clause (c) above, the shareholder must give timely notice thereof in
writing to the Secretary of the Corporation and such business must be a proper
matter for shareholder action under the Delaware General Corporation Law and a
proper matter for consideration at such meeting under the Certificate of
Incorporation and these Bylaws. For such notice to be timely, it must be
delivered to the Secretary at the principal business office of the Corporation
not earlier than the 90th day prior to the date of such meeting and not later
than the close of business on the later of (i) the 60th day prior to the date of
such meeting or (ii) the 10th day following the day on which public announcement
of the date of such meeting is first made. If such shareholder's notice relates
to a proposal by such shareholder to nominate one or more persons for election
or re-election as a director, it shall set forth all information relating to
each such person that is required to be disclosed in solicitations of proxies
for election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (including, if and to the extent so required, such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected). If such shareholder's notice relates to any
other business that the shareholder proposes to bring before the meeting, it
shall set forth a brief description of such business, the reasons for
conducting such business at the meeting and any material interest in such
business of such shareholder and the beneficial owner, if any, on whose behalf
the proposal is made. Each such notice shall also set forth as to the
shareholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination or proposal is made (i) the name and address of such shareholder,
as they appear on the Corporation's books, and of such beneficial owner and (ii)
the class and number of shares of capital stock of the Corporation which are
owned beneficially and of record by such shareholder and such beneficial owner.
Persons nominated by shareholders to serve as directors of the Corporation who
have
<PAGE>
- 9 -
not been nominated in accordance with this Section 10 shall not be eligible to
serve as directors. Only such business shall be conducted at an annual or
special meeting of shareholders as shall have been brought before the meeting in
accordance with this Section 10. The chairman of the meeting shall determine
whether a nomination or any business proposed to be transacted by the
shareholders has been properly brought before the meeting and, if any proposed
nomination or business has not been properly brought before the meeting, the
chairman shall declare that such proposed business or nomination shall not be
presented for shareholder action at the meeting. For purposes of this Section
10, "public announcement" shall mean disclosure in a press release reported by
the Dow Jones News Service, Associated Press or a comparable national news
service. Notwithstanding any provision in this Section 10 to the contrary,
requests for inclusion of proposals in the Corporation's proxy statement made
pursuant to Rule 14a-8 under the Exchange Act shall be deemed to have been
delivered in a timely manner if delivered in accordance with such Rule.
Notwithstanding compliance with the requirements of this Section 10, the
chairman presiding at any meeting of the shareholders may, in his sole
discretion, refuse to allow a shareholder or shareholder representative to
present any proposal which the Corporation would not be required to include in a
proxy statement under any rule promulgated by the Securities and Exchange
Commission.
ARTICLE IV
BOARD OF DIRECTORS' MEETINGS
SECTION 1. ANNUAL MEETINGS. An annual meeting of the Board of Directors
shall be held without other notice than this Bylaw immediately after, and at the
same place as, the annual meeting of shareholders.
SECTION 2. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the Chairman of the Board or any two
directors. The person or persons authorized to call special meetings of the
Board of Directors may fix any place, either within or without the State of
Delaware, as the place for holding any special meeting of the Board of Directors
called by them.
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SECTION 3. NOTICE. Except as set forth in the next sentence, notice of
any special meeting shall be given at least 24 hours prior to the meeting by
written notice delivered or given personally (including by phone) or by mail or
telegram or other written communication to each director at his business address
or residence. If, however, the meeting is called by or at the request of the
Chairman of the Board and if the Chairman of the Board decides that unusual and
urgent business is to be transacted at the meeting (which decision shall be
conclusively demonstrated by his giving notice of the meeting less than 24 hours
prior to the meeting), then at least 2 hours' prior notice shall be given. If
notice is given by telegram or courier, such notice shall be deemed to be given
when the telegram is delivered to the telegraph company or courier company and
any personal notice shall be deemed given when given. Any director may waive
notice of any meeting. The attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director attends a
meeting and objects thereat to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice or waiver of notice of such
meeting.
SECTION 4. QUORUM. One-third of the number of directors fixed by, or
pursuant to, Section 2 of Article II shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors, but if less
than such one-third is present at a meeting, a majority of the directors present
may adjourn the meeting from time to time without further notice.
SECTION 5. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
SECTION 6. PRESUMPTION OF ASSENT. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent is entered in the minutes of the meeting or unless he files his
written dissent to such action with the person acting as the secretary of the
meeting before the adjournment thereof or
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forwards such dissent by registered mail to the Secretary of the Corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.
SECTION 7. ACTION BY DIRECTORS WITHOUT A MEETING. Any action required to
be taken at a meeting of directors, or at a meeting of a committee of directors,
or any other action which may be taken at a meeting, may be taken without a
meeting if a consent in writing setting forth the action so taken shall be
signed by all of the directors or members of the committee thereof entitled to
vote with respect to the subject matter thereof and filed with the minutes of
proceedings of the Board of Directors or committee and such consent shall have
the same force and effect as a unanimous vote.
SECTION 8. PARTICIPATION IN A MEETING BY TELEPHONE. Members of the Board
of Directors or any committee of directors may participate in a meeting of such
Board or committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participating in a meeting pursuant to this Section 8 shall
constitute presence in person at such meeting.
ARTICLE V
OFFICERS AND CHAIRMAN OF THE BOARD
SECTION 1. NUMBER, ELECTION, APPOINTMENT, REMOVAL, VACANCY. The elected
officers of the Corporation shall be one Vice Chairman of the Board and Chief
Executive Officer, a President, one or more Vice Presidents, a Chief Financial
Officer, a Treasurer, a Secretary and a Controller, each of whom shall be
elected by the Board of Directors. The appointed officers of the Corporation
shall be one or more Assistant Treasurers and Assistant Secretaries, each of
whom shall be appointed by the Vice Chairman and Chief Executive Officer and
shall serve at his pleasure. The Board of Directors may designate one or more
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Vice Presidents as Senior Executive Vice President, one or more Vice Presidents
as Executive Vice President and one or more Vice Presidents as Senior Vice
President. Such other officers as may be necessary, including one or more Vice
Chairmen of the Board (in addition to the Vice Chairman of the Board and Chief
Executive Officer), one or more Officers of the Board and a Chairman of the
Executive Committee may be elected by the Board of Directors. Any two or more
offices may be held by the same person, except the offices of President and
Secretary, and the offices of President and Vice President. The elected
officers of the Corporation shall be elected annually by the Board of Directors
at the first meeting of the Board of Directors held after each annual meeting of
the shareholders. If the election of officers shall not be held at such
meeting, such election shall be held as soon thereafter as convenient. Each
elected officer shall hold office until his successor shall have been duly
elected or until his death or until he shall resign or shall have been removed
in the manner hereinafter provided. Any officer elected by the Board of
Directors may be removed by the Board of Directors whenever in its judgment the
best interests of the Corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed. Election shall not of itself create contract rights. A vacancy in any
elected office because of death, resignation, removal, disqualification or
otherwise, may be filled by the Board of Directors for the unexpired portion of
the term.
SECTION 2. CHAIRMAN OF THE BOARD OF DIRECTORS. At its first meeting after
the annual meeting of shareholders, the Board of Directors shall elect one of
its own members to be the Chairman of the Board of Directors ("Chairman of the
Board"). The Chairman of the Board shall work with the Board of Directors to
define its structure, agenda and activities in order to fulfill its
responsibilities and shall work with senior management to help ensure that
matters for which management is responsible are appropriately reported to the
Board of Directors. He shall preside at all meetings of the shareholders and of
the Board of Directors and shall call and prescribe the content of such
meetings. The Chairman of the Board shall lead the Board of Directors in its
role of assessing the performance of the management of the Corporation. The
Chairman of the Board shall also counsel the members of the Chief Executive
Office,
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where appropriate, and shall perform such other duties as may be prescribed by
the Board of Directors from time to time. The Chairman of the Board may
designate one or more other directors to exercise the functions and to have the
authority of the Chairman of the Board during the absence or disability of the
Chairman of the Board and prior to any action by the Board of Directors to fill
any vacancy. The Board of Directors may remove or replace the Chairman of the
Board at any time and any vacancy in such position because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
SECTION 3. THE VICE CHAIRMAN OF THE BOARD OF DIRECTORS AND CHIEF EXECUTIVE
OFFICER. The Vice Chairman of the Board of Directors and Chief Executive
Officer ("Vice Chairman of the Board and CEO") shall be the senior executive
officer of the Corporation and shall in general supervise and control all the
business and affairs of the Corporation. He shall direct the policy of the
Corporation; and he may delegate powers to any other officer of the Corporation.
Except where by law the signature of such other officer is required, the Vice
Chairman of the Board and CEO shall possess the same power as such other officer
to sign all certificates, contracts and other instruments and documents of the
Corporation which may be authorized by the Board of Directors or otherwise, and
shall possess the same power as such other officer to take any action authorized
by these Bylaws or by the Board of Directors or otherwise. He shall also
perform such duties as may be prescribed by the Board of Directors or by the
Chairman of the Board of Directors acting for the Board of Directors from time
to time. In addition, the Board of Directors may appoint one or more other Vice
Chairmen of the Board, who shall not be the Vice Chairman of the Board and CEO,
who shall perform such other duties as may be prescribed by the Board of
Directors, the Vice Chairman of the Board and CEO and the President from time to
time.
SECTION 4. THE PRESIDENT. The President, in the absence or disability of
the Vice Chairman of the Board and CEO, shall exercise the functions and shall
have the authority of the Vice Chairman of the Board and CEO. The President may
sign, with the Secretary or other proper officer of the Corporation thereunto
authorized by the
<PAGE>
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Board of Directors (if the signature of the Secretary or such other officer is
required), certificates for shares of the Corporation, any deeds, mortgages,
bonds, contracts, and other instruments and documents which may be authorized by
the Board of Directors or otherwise, except in cases where the signing and
execution thereof shall be expressly delegated by the Board of Directors or by
these Bylaws to some other officer or agent of the Corporation, or shall be
required by law to be otherwise signed or executed; and in general, shall
perform all duties incident to the office of President and such other duties as
may be prescribed by the Board of Directors from time to time
SECTION 5. THE CHAIRMAN OF THE EXECUTIVE COMMITTEE, SENIOR EXECUTIVE VICE
PRESIDENTS, EXECUTIVE VICE PRESIDENTS, OFFICERS OF THE BOARD, SENIOR VICE
PRESIDENTS AND THE CORPORATE VICE PRESIDENTS. The Chairman of the Executive
Committee, Senior Executive Vice Presidents, Executive Vice Presidents, Officers
of the Board, Senior Vice Presidents and the Corporate Vice Presidents, in the
order designated by the Board of Directors or the Chairman of the Board, shall
exercise the functions and shall have the authority of the President during the
absence or disability of the President. The Chairman of the Executive
Committee, each Senior Executive Vice President, Executive Vice President,
Officer of the Board, Senior Vice President and Corporate Vice President shall
have such powers as may be designated and shall discharge such duties as may be
assigned to him from time to time by the Board of Directors or the Chief
Executive Office. In addition to the duties described in the prior sentence,
all these elected officers (except the Chairman of the Executive Committee) are
authorized to sign and execute all agreements, contracts, leases, bids,
proposals, deeds, assignments, powers of attorney, guarantee undertakings,
instruments, documents, claims, including claims against the United States of
America, and certifications of such claims, in the ordinary course of business
of the Corporation, and to redelegate that authority in writing to others;
provided, however, that only the Vice Chairman and CEO, the President, the Chief
Financial Officer and the Treasurer are authorized to perform those activities
set forth in the third sentence of the first paragraph of Article V, Section 7,
of these Bylaws.
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SECTION 6. THE SECRETARY. The Secretary shall keep the minutes of all
meetings of the Board of Directors and the minutes of all meetings of the
shareholders, in books provided by the Corporation for such purpose. He shall
attend to giving and serving of all notices of the Corporation whereby meetings
of the Board of Directors and shareholders are assembled. He shall provide
lists of shareholders and their addresses required to be prepared by the
provisions of any present or future statute of the State of Delaware. He may
sign, with any other officer, in the name of the Corporation, all contracts and
other instruments requiring the seal of the Corporation and may affix the seal
thereto. He shall have charge of such books and papers as the Board of
Directors may direct. He shall in general perform all of the duties which are
incident to the office of secretary of a corporation, subject at all times to
the direction and control of the Board of Directors.
SECTION 7. THE CHIEF FINANCIAL OFFICER AND THE TREASURER. The Chief
Financial Officer shall be the senior financial officer of the Corporation. The
Chief Financial Officer, the Vice Chairman and CEO, the President and the
Treasurer shall each individually have the power, which may be redelegated in
writing, on behalf of the Corporation, to borrow funds and to otherwise incur
liabilities, to sell or discount bills, receivables and other instruments and
rights, to enter into and deliver repurchase, credit, guarantee, surety, loan,
interest rate, currency and other agreements, which may contain covenants
restricting the Corporation's ability to take certain actions or require it to
take certain actions, to sign and deliver acceptances, notes and other
obligations, to buy and sell foreign exchange, whether for current or future
delivery, or options on foreign exchange, to purchase, sell, exchange or
otherwise deal in stock or other securities, to procure letters of credit,
travelers' checks or similar instruments, to open and close accounts with any
banking institution or other depository of funds, to sign, manually, by
facsimile signature or otherwise, checks, drafts or other orders for the payment
of funds (which each such institution is hereby authorized and directed to
honor), to issue written, telephonic, electronic or oral instructions for the
transfer of funds by wire or other electronic means or otherwise, to enter into
agreements or
<PAGE>
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documents with any banking or financial institution with respect to any
services, including, without limitation, electronic services, and to do all
things in connection with any of these as any of them sees fit. The Chief
Financial Officer, the Vice Chairman and CEO, the President and the Treasurer
shall each individually also have the power, which may be redelegated in
writing, on behalf of the Corporation, to guarantee, or to act as surety with
respect to, any of the obligations of any entity of which any of the outstanding
stock or securities is owned, directly or indirectly by the Corporation. In
addition, the Chief Financial Officer, as well as each of the Vice Chairman of
the Board and CEO, the President and the Treasurer, shall individually have the
authority to vote all shares or securities in any entity directly or indirectly
owned by the Corporation and to redelegate that authority in writing to others.
The Treasurer shall have the custody of all of the funds and securities of
the Corporation. He shall be empowered to endorse on behalf of the Corporation
all checks, notes or other obligations and evidences of the payment of money,
payable to the Corporation or coming into his possession, and shall deposit the
funds arising therefrom, together with all other funds of the Corporation,
coming into his possession, in such banks as may be selected as the depositories
of the Corporation, or properly care for them in such other manner as the Board
of Directors may direct. All checks and other instruments drawn on or payable
out of the funds of the Corporation and all bills, notes or other evidence of
indebtedness shall be signed by such officers and employees as the Board of
Directors may designate. Whenever required by the Board of Directors so to do,
he shall exhibit a complete and true statement of property in his possession,
custody or control. He shall provide for the entry regularly, in records
belonging to the Corporation, a full and accurate account of all money received
and paid on account of the Corporation, together with all other business
transactions. He shall, at all reasonable times within the hours of business,
exhibit his records and accounts to any director. He shall perform all duties
which are incident to the office of treasurer of a corporation, subject,
however, at all times to the direction and control of the Board of Directors.
If the Board of Directors shall so require, he shall give bond, in
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such sum and with such securities as the Board of Directors may direct, for the
faithful performance of his duties and for the safe custody of the funds and
property of the Corporation coming into his possession.
SECTION 8. THE CONTROLLER. The Controller shall be the Chief Accounting
Officer of the Corporation and shall: (a) keep, or cause to be kept, correct
and complete books and records of account, including full and accurate accounts
of receipt and disbursements in books belonging to the Corporation; and (b) in
general, perform all duties incident to the office of Controller and such other
duties as from time to time may be assigned to him by the Chairman of the Board
or by the Board of Directors. In addition, the Controller, the Chief Financial
Officer and the Treasurer shall each individually be authorized to sign powers
of attorney on behalf of the Corporation and to appoint agents and attorneys to
represent the Corporation in dealings before or with the Bureau of Customs.
SECTION 9. STATUTORY DUTIES. Each respective officer shall discharge any
and every duty, appertaining to his respective office, which is imposed on such
officer by the provisions of any present or future statute of the State of
Delaware.
SECTION 10. DELEGATION OF DUTIES. In case of the absence of any officer
of the Corporation, the Chairman of the Board or the Board of Directors may
delegate, for the time being, the duties of such officer to any other officer or
to any director.
SECTION 11. SALARIES. The salaries of the officers and the Chairman of
the Board shall be fixed from time to time by the Board of Directors unless such
authority has been delegated by the Board of Directors, in which case, salaries
shall be fixed by the person, persons or committee to whom authority has been
delegated, subject to any limitations which may be contained in the resolution
delegating such authority. No officer shall be prevented from receiving such
salary by reason of the fact that he or she is also a director of the
Corporation.
SECTION 12. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The Vice
Chairman of the Board and CEO may appoint, from time to time, as he may see fit,
and may (but shall not be required to) fix the compensation of, one or more
Assistant Treasurers and
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Assistant Secretaries, each of whom shall hold office during the pleasure of the
Vice Chairman of the Board and CEO, and shall perform such duties as he may
assign.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of
the Corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the Vice Chairman of the Board
and CEO or President, and by the Treasurer or the Secretary. Any or all of the
signatures on the certificate may be a facsimile. In case any officer, transfer
agent, or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent, or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if he were such officer, transfer agent, or registrar at
the date of issue. All certificates for shares shall be consecutively numbered
or otherwise identified. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and date of issue,
shall be entered on the stock ledger of the Corporation.
SECTION 2. TRANSFER OF CERTIFICATE. Transfer of shares of the Corporation
shall be made only upon the records of the Transfer Agent appointed for this
purpose, by the owner in person or by the legal representative of such owner
and, upon such transfer being made, the old certificates shall be surrendered to
the Transfer Agent who shall cancel the same and thereupon issue a new
certificate or certificates therefor. Whenever a transfer is made for
collateral security, and not absolutely, the fact shall be so expressed in the
recording of the transfer.
SECTION 3. TRANSFER AGENT AND REGISTRAR. The Board of Directors may
appoint a transfer agent and registrar of transfers and thereafter may require
all stock certificates to bear the signature of such transfer agent and such
registrar of transfers. The signature of either the transfer agent or the
registrar, but not both, may be a facsimile.
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SECTION 4. REGISTERED HOLDER. The Corporation shall be entitled to treat
the registered holder of any shares as the absolute owner thereof and,
accordingly, shall not be bound to recognize any equitable or other claim
thereto, or interest therein, on the part of any other person, whether or not it
shall have express or other notice thereof, save as expressly provided by the
statutes of the State of Delaware.
SECTION 5. RULES OF TRANSFER. The Board of Directors also shall have the
power and authority to make all such rules and regulations as they may deem
expedient concerning the issue, transfer and registration of the certificates
for the shares of the Corporation.
SECTION 6. LOST CERTIFICATES. Any person claiming a certificate for
shares of this Corporation to be lost or destroyed, shall make affidavit of the
fact and lodge the same with the Secretary of the Corporation, accompanied by a
signed application for a new certificate. Such person shall give to the
Corporation, to the extent deemed necessary by the Secretary or Treasurer, a
bond of indemnity with one or more sureties satisfactory to the Secretary, and
in an amount which, in his judgment, shall be sufficient to save the Corporation
from loss, and thereupon the proper officer or officers may cause to be issued a
new certificate of like tenor with the one alleged to be lost or destroyed. But
the Secretary may recommend to the Board of Directors that it refuse the
issuance of such new certificate in the event that the applicable provisions of
the Uniform Commercial Code are not met.
ARTICLE VII
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The Board of Directors may authorize, by these
Bylaws or any resolution, any officer or officers, agent or agents, to enter
into any contract or execute and deliver any instrument in the name of and on
behalf of the Corporation, and such authority may be general or confined to
specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name unless
authorized by
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these Bylaws or a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation, shall be signed by such officer or officers, agent or
agents, of the Corporation and in such manner as shall from time to time be
determined by these Bylaws or a resolution of the Board of Directors.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board of Directors may
select.
ARTICLE VIII
BOOKS AND RECORDS
SECTION 1. LOCATION. Complete books and records of account together with
minutes of the proceedings of the meetings of the shareholders and Board of
Directors shall be kept. A record of shareholders, giving the names and
addresses of all shareholders, and the number and class of the shares held by
each, shall be kept by the Corporation at its registered office or principal
place of business in the State of Illinois or at the office of a Transfer Agent
or Registrar.
ARTICLE IX
NOTICES
SECTION 1. MANNER OF NOTICE. Whenever, under the provisions of the
Certificate of Incorporation or of the Bylaws of the Corporation or of the
statutes of the State of Delaware, notice is required to be given to a
shareholder, to a director or to an officer, it shall not be construed to mean
personal notice, unless expressly stated so to be. And any notice so required
(other than notice by publication) may be given in writing by depositing the
same in the United States mail, postage prepaid, directed to the shareholder,
director or officer, at his, or her, address as the same appears on the records
of the Corporation, and the time when the same is mailed shall be deemed the
time of the giving of such notice.
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SECTION 2. WAIVER OF NOTICE. Any shareholder, director or officer may, in
writing, waive the giving and the mailing of any notice required to be given or
mailed either by and under the statutes of the State of Delaware or by and under
the Bylaws.
ARTICLE X
FISCAL YEAR
SECTION 1. FISCAL YEAR. The fiscal year of the Corporation shall begin on
the 1st day of January and terminate on the 31st day of December.
ARTICLE XI
EMERGENCY BYLAWS
The Emergency Bylaws provided in this Article XI shall be operative upon
(a) the declaration of a civil defense emergency by the President of the United
States or by concurrent resolution of the Congress of the United States pursuant
to Title 50, Appendix, Section 2291 of the United States Code, or any amendment
thereof, or (b) upon a proclamation of a civil defense emergency by the Governor
of the State of Illinois which relates to an attack or imminent attack on the
United States or any of its possessions. Such Emergency Bylaws, or any
amendments to these Bylaws adopted during such emergency, shall cease to be
effective and shall be suspended upon any proclamation by the President of the
United States, or the passage by the Congress of a concurrent resolution, or any
declaration by the Governor of Illinois that such civil defense emergency no
longer exists.
SECTION 1. BOARD OF DIRECTORS' MEETINGS. During any such emergency, any
meeting of the Board of Directors may be called by any officer of the
Corporation or by any director. Notice shall be given by such person or by any
officer of the Corporation. The notice shall specify the place of the meeting,
which shall be at the head office of the Corporation at the time if feasible,
and otherwise, any other place specified in the notice. The notice shall also
specify the time of the meeting. Notice may be given only to such of the
directors as it may be feasible to reach at the time and by such means as may be
feasible at the time, including publication or radio. If given by mail,
messenger, telephone, or telegram, the notice shall be addressed to the director
at his
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residence or business address, or such other place as the person giving the
notice shall deem most suitable. Notice shall be similarly given, to the extent
feasible in the judgment of the person giving the notice, to the other
directors. Notice shall be given at least two days before the meeting, if
feasible in the judgment of the person giving the notice, and otherwise on any
shorter time he may deem necessary.
SECTION 2. CHANGE OF HEAD OFFICE. The Board of Directors, during any such
emergency may, effective in the emergency, change the head office or designate
several alternative head offices, or regional offices or authorize the officers
to do so.
ARTICLE XII
DIRECTOR EMERITUS
SECTION 1. DIRECTOR EMERITUS. The Board of Directors may at any time and
from time to time award to former members of the Board of Directors in
recognition of their past distinguished service and contribution rendered to the
Corporation the honorary title "Director Emeritus." The award of this title
shall not constitute an election or appointment to the Board of Directors, nor
to any office of the Corporation, nor the bestowal of any duties,
responsibilities or privileges associated therewith; and accordingly no
"Director Emeritus" shall be deemed a "Director" as that term is used in these
Bylaws. The title "Director Emeritus" shall carry no compensation, and holders
thereof shall not attend any meetings of the Board of Directors or committees of
the Board of Directors, except by written invitation, nor shall they be
specially privy to any confidential information arising from such meeting.
ARTICLE XIII
AMENDMENT OF BYLAWS
SECTION 1. AMENDMENT OF BYLAWS. These Bylaws may be altered, amended or
repealed and new Bylaws may be adopted at any meeting of the Board of Directors
by a majority vote of the directors present at the meeting.
<PAGE>
Exhibit 4.12
No. R-1 $150,000,000
CUSIP 620076 AK 5
MOTOROLA, INC.
6 1/2% Debenture due September 1, 2025
If the registered owner of this Debenture (as indicated below) is The
Depository Trust Company (the "Depositary") or a nominee of the Depositary, this
Debenture is a global Debenture and the following legend is applicable: Unless
this certificate is presented by an authorized representative of The Depository
Trust Company (55 Water Street, New York, New York) to the issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of CEDE & CO., or such other name as requested by an
authorized representative of The Depository Trust Company, and any payment is
made to CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL because the registered owner hereof,
CEDE & CO., has an interest herein. If the registered owner of this Debenture
(as indicated below) is the Depositary or a nominee of the Depositary, this
Debenture is a global Debenture and the following legend is applicable except as
specified on the reverse hereof: THIS GLOBAL DEBENTURE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
NOMINEE TO A SUCCESSOR OF THE DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR.
MOTOROLA, INC. a corporation duly organized and validly existing under the
laws of the State of Delaware (hereinafter called the "Company"), for value
received, hereby promises to pay to CEDE & CO. or registered assigns the
principal sum of One Hundred and Fifty Million Dollars on September 1, 2025, and
to pay interest thereon from September 1, 1995 or from the most recent interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on March 1 and September 1 in each year, commencing March 1, 1996, at the rate
of 6 1/2% per annum, until the principal hereof is paid or made available for
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture
<PAGE>
hereinafter referred to, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the February 15 and
August 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof to be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture.
Payment of the principal of and interest on this Security will be made at
the office or agency of the Company maintained for that purpose in Chicago,
Illinois, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company, payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this
2
<PAGE>
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
Dated: September 1, 1995
Authenticated: September 1, 1995
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series
designated therein referred to in the within-
mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK, MOTOROLA, INC.
as Trustee
By: __________________________ By: ____________________________
Authorized Officer Title:
Attest:
By: ____________________________
Title:
3
<PAGE>
(Reverse)
MOTOROLA, INC.
6 1/2% Debenture due September 1, 2025
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of May 1, 1995 (herein called the
"Indenture"), between the Company and Harris Trust and Savings Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof, limited in aggregate principal amount to
$400,000,000.
The Securities may not be redeemed at the option of the Company prior to
maturity, and do not provide for any sinking fund.
This Security may be redeemed on September 1, 2005, at the option of the
Holder, at 100% of its principal amount, together with accrued interest to
September 1, 2005 (the "Purchase Price"). In order for a Holder to exercise
this option, the Company must receive at its office or agency in New York, New
York, during the period beginning on July 1, 2005 and ending at 5:00 PM (New
York City time) on August 1, 2005 (or, if August 1, 2005 is not a Business Day,
the next succeeding Business Day), (i) this Security with the form below
entitled "Option to Require Redemption on September 1, 2005" duly completed, or
(ii) a telegram, facsimile transmission or letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or a trust company in the United States of America setting forth
the name, address and telephone number of the Holder of this Security, the
principal amount of this Security, the amount of this Security to be redeemed, a
statement that the Option to Require Redemption on September 1, 2005 is being
exercised thereby and a guarantee that this Security to be redeemed (with the
form below entitled
4
<PAGE>
"Option to Require Redemption on September 1, 2005" duly completed) will be
received at such office or agency of the Company not later than five Business
Days after the date of such telegram, facsimile transmission or letter, and this
Security (with the form below entitled "Option to Require Redemption on
September 1, 2005" duly completed) must be received at such office or agency of
the Company by such fifth Business Day. Any such notice received by the Company
during the period beginning July 1, 2005 and ending at 5:00 PM (New York City
time) on August 1, 2005 (or, if August 1, 2005 is not a Business Day, the next
succeeding Business Day) shall be irrevocable. No transfer or exchange of this
Security (or, in the event that this Security is to be redeemed in part, such
portion of this Security to be redeemed) will be permitted after such notice is
received by the Company. The redemption option may be exercised by the Holder
for less than the entire principal amount of this Security, provided the
principal amount that is to be redeemed is equal to $1,000 or any integral
multiple thereof. All questions as to the validity, eligibility (including time
and receipt) and acceptance of this Security for redemption will be determined
by the Company, whose determination will be final and binding.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66-2/3% in the aggregate principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder
5
<PAGE>
and upon all future Holders of this Security and of any Security issued upon the
registration or transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency herein
prescribed.
As provided in the Indenture and subject to certain limitations therein and
herein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and interest
on this Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein and herein
set forth. Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the
6
<PAGE>
Trustee may treat the Person in whose name this Security is registered as the
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
Unless the context otherwise requires, all terms used in this Security
which are not defined herein shall have the meanings assigned to them in the
Indenture.
<PAGE>
Exhibit 10.4
Resolution Amending Section 4
of
Share Option Plan of 1991
RESOLVED, that, the Share Option Plan of 1991 is hereby amended by adding
the following sentence at the end of the first paragraph of Section 4:
"The Committee may, in its discretion, delegate to members of the Committee
and/or one or more elected officers of the Company the authority to grant
options to key employees who are not subject to Section 16 of the 1934
Act."
<PAGE>
Exhibit 10.9
Motorola, Inc.
Deferred Fee Plan
for Outside Directors
As Amended February 6, 1996
1. Purpose: The purpose of the Motorola, Inc. Deferred Fee Plan For Outside
Directors (the "Plan") is to permit Directors who are not regular employees of
Motorola, Inc. ("Motorola") to elect to defer receipt of all or a portion of the
Compensation they receive for services as a member of Motorola's Board of
Directors.
2. Definitions:
(a) The term "Company" shall mean Motorola, a Delaware corporation, and
all of its subsidiaries.
(b) The term "Board" shall mean the Board of Directors of Motorola.
(c) The term "Director" shall mean a person (a) who is serving as a member
of the Board and (b) who is not a regular employee of the Company or its
subsidiaries.
(d) The term "Beneficiary" shall mean such individual(s) or such executor
or trustee(s) of a trust as may be designated by a Director pursuant to
paragraph 4(c) of Section 4 hereof.
(e) The term "Compensation" shall mean all cash remuneration, payable to a
Director for services to the Company as a Director other than reimbursement
for expenses, and shall include retainer fees for service on the Board,
fees for serving as chairman of a committee of the Board, fees for
attendance at meetings of the Board and any committees thereof, payments
for work performed in connection with service on a committee of the Board
or at the request of the Board, any committee thereof or a member of the
Chief Executive Office of Motorola and any other kind or category of fees
or payments which may be put into effect in the future.
<PAGE>
2
3. Participation: A Director may elect on or before December 31st of any year
to defer for succeeding calendar years the receipt of all or a specified dollar
amount or percentage of his/her Compensation for one or more category(ies) of
Compensation. An election to defer the receipt of Compensation continues for
succeeding years unless the Director provides the Company with written notice
filed with the Company on or before December 31st of a year for which an
election is in effect that for succeeding years he/she elects to terminate
his/her election or to modify his/her election by either changing the dollar
amount or percentage of Compensation and/or category(ies) of Compensation to be
deferred, changing the designated beneficiary(ies) or by changing the manner in
which deferred Compensation is to be paid to him/her at the end of the deferral
period.
4. Method of Deferment: Compensation, the receipt of which a Director has
elected to defer, shall be treated in the following manner:
(a) The Company shall accrue such deferred Compensation to a separate
memorandum account on its books in the name of the electing Director. The
memorandum account shall be credited with interest as of the last day of
each of the Company's fiscal quarters. The amount of such interest shall
be one-fourth of the annual discount rate of ninety-day United States
Treasury bills issued during the week in which the last business day of the
Company's fiscal quarter happens to fall.
(b) Commencing with the first day of the month of the calendar year
immediately following the year in which the Director has ceased to be a
Director, has become disabled or has attained the age designated on his/her
Election to Defer Director's Compensation, whichever date(s) the Director
selected at the time of making his/her deferral election, the Company shall
pay the Director his/her deferred Director's Compensation and interest
which has accumulated thereon. The Company shall make the payment in
either a lump-sum or in annual installments over a period not exceeding ten
years, whichever method of payment the Director selected at the time of
making his/her deferral election. The Company may, in its
<PAGE>
3
discretion, accelerate the date upon which payment(s) to the Director shall
begin.
(c) Upon the death of a Director prior to distribution of the entire
amount accrued to his/her account, any such undistributed amount shall be
paid in a lump sum to the Director's estate, to a trust or to such
Beneficiary or Beneficiaries as the Director shall have previously
designated in writing. Each Director who elects to defer the receipt of
Compensation pursuant to this Plan may designate upon such form or
instrument as may be provided for that purpose, a Beneficiary or
Beneficiaries who are to receive payments pursuant to this Section 4(c).
If the Director has not designated a Beneficiary in writing or if there
shall be no Beneficiary designated or in existence at the time of the
Director's death, any undistributed amount shall be paid to the Director's
estate.
(d) If a Director or his/her Beneficiary who is entitled to receive
payments under the Plan is a minor, or is ill, or is disabled due to any
cause which in the judgment of the Company renders him/her unable to apply
such amount to his/her own best interest and advantage, the Company may, in
its discretion, pay all or part of the amount in one or a combination of
the following ways as the Company may determine to be for the individual's
best interest:
(i) directly to him/her;
(ii) to his/her legal or natural guardian or the conservator of
his/her estate;
(iii)to any person having his/her care or custody; or
(iv) directly for his/her care, support or education.
Such payment shall completely discharge all of the Company's obligations
under the Plan.
(e) Amounts which a Director has deferred and any interest which has
accumulated thereon shall constitute an unfunded general obligation of the
Company until such time(s) as they are paid.
<PAGE>
4
5. Nonassignability: No Director or Beneficiary shall have any power to
commute, encumber, sell or otherwise dispose of the rights provided herein and
such rights shall not be subject to anticipation, alienation, assignment, pledge
or charge.
6. Amendment or Termination: This Plan may be amended by the Board at any
time and from time to time provided that no such amendment shall result in
changing the provisions of paragraph 4(a) of Section 4 hereof. Paragraphs 4(b)
and 4(c) of Section 4 hereof can be amended only to change the date after
retirement upon which payments to a Director or Beneficiary shall commence and
the time, or times, at which such payments shall be made.
This Plan may be terminated by the Board at any time, except that such
termination shall have no effect on deferred Compensation and interest thereon
which have accrued to the account of any Director at the time of termination.
<PAGE>
Exhibit 11
Motorola, Inc. and Consolidated Subsidiaries
Primary and Fully Diluted Earnings Per Common and Common Equivalent Share
(In millions, except per share amounts)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
--------------------------------
Dec. 31, Dec. 31,
1995 1994
--------------------------------
<S> <C> <C>
Net Income $ 1,781 $ 1,560
Add:
Interest on Zero coupon notes due
2009 and 2013, net of tax and
effect of executive incentive and
employee profit sharing plans 7 12
------- -------
Adjusted net income $ 1,788 $ 1,572
EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE - PRIMARY:
- -------------------------------------
Weighted average common shares
outstanding 589.7 564.9
Common equivalent shares:
Stock options 12.8 13.4
Zero coupon notes due 2009 and 2013 7.2 13.4
------- -------
Common and common equivalent
shares-primary (in millions) 609.7 591.7
------- -------
Net earnings per share - primary $ 2.93 $ 2.66
------- -------
------- -------
EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE - FULLY DILUTED:
- ------------------------------------------
Weighted average common shares
outstanding 589.7 564.9
Common equivalent shares:
Stock options 12.9 14.4
Zero coupon notes due 2009 and 2013 7.2 13.4
------- -------
Common and common equivalent
shares-fully diluted (in millions) 609.8 592.7
------- -------
Net earnings per share - fully diluted $ 2.93 $ 2.65
------- -------
------- -------
</TABLE>
<PAGE>
Exhibit 21
MOTOROLA, INC.
LISTING OF COMBINED AND MAJOR SUBSIDIARIES
12/31/95
Motorola International Capital Corporation Delaware
Motorola International Development Corporation Delaware
Embarc Communications Services, Inc. Nevada
Motorola Foreign Sales Corporation U.S. Virgin Islands
Motorola Credit Corporation Delaware
Nippon Motorola Limited Japan
Motorola G.m.b.H. Germany
Motorola Limited England
Motorola Asia Limited Hong Kong
Motorola Korea Limited Korea
Motorola Canada Limited Canada
Motorola Israel Limited Israel
Motorola Semiconducteurs S.A. France
Motorola Malaysia Sdn. Bhd. Malaysia
Motorola de Mexico, S.A. Mexico
Motorola Electronics Taiwan, Limited Taiwan
Motorola Electronics Pte. Limited Singapore
Motorola Semiconductor Hong Kong Limited Hong Kong
Motorola Semiconductor Sdn. Bhd. Malaysia
Motorola Electronics Sdn. Bhd. Malaysia
Motorola Lighting, Inc. Delaware
Motorola S.A. France
Motorola S.p.A. Italy
Motorola A.B. Sweden
Motorola Australia Proprietary Limited Australia
Motorola Espana S.A. Spain
Motorola Philippines, Inc. Philippines
Motorola Communications Israel Limited Israel
Telcel S.A. Spain
Motorola Electronic G.m.b.H. Germany
Motorola A/S Denmark
Motorola (China) Electronics Ltd. China
Motorola Electronique Automobile S.A. France
Motorola B.V. Holland
Motorola China Holdings Limited Hong Kong
Motorola Ardis, Inc. Delaware
Motorola de Puerto Rico, Inc. Delaware
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
Consolidated Balance Sheet as of December 31, 1995 and the Statement of
Consolidated Earnings for the year ended December 31, 1995 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 725
<SECURITIES> 350
<RECEIVABLES> 4,204
<ALLOWANCES> 123
<INVENTORY> 3,528
<CURRENT-ASSETS> 10,510
<PP&E> 17,466
<DEPRECIATION> 8,110
<TOTAL-ASSETS> 22,801
<CURRENT-LIABILITIES> 7,793
<BONDS> 1,949
0
0
<COMMON> 1,774
<OTHER-SE> 9,274
<TOTAL-LIABILITY-AND-EQUITY> 22,801
<SALES> 27,037
<TOTAL-REVENUES> 0
<CGS> 17,545
<TOTAL-COSTS> 22,187<F1>
<OTHER-EXPENSES> 1,919<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 149
<INCOME-PRETAX> 2,782
<INCOME-TAX> 1,001
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,781
<EPS-PRIMARY> 2.93
<EPS-DILUTED> 2.93
<FN>
<F1>Total Cost Includes Cost of Goods Sold and Selling, General, and
Administrative Expense.
<F2>Other Expense Includes Depreciation Expense.
</FN>
</TABLE>
