<PAGE>
Filed pursuant to Rule 424(b)(3)
File No. 333-76041
Subject to Completion
Preliminary Prospectus Supplement dated November 7, 2000
PROSPECTUS SUPPLEMENT
(To prospectus dated November 7, 2000)
$1,000,000,000
[MOTOROLA LOGO]
% Notes due November , 2010
------------
We will pay interest on the notes on May and November of each year,
beginning on May , 2001. The notes will mature on November , 2010. We may
redeem all or a portion of the notes at any time at the redemption prices
described in this prospectus supplement.
The notes are unsecured and rank equally with all of our other unsecured
senior indebtedness. The notes will be issued only in registered form in
denominations of $1,000 and integral multiples of $1,000.
------------
<TABLE>
<CAPTION>
Per Note Total
-------- -----
<S> <C> <C>
Public offering price(1).................................. % $
Underwriting discount..................................... % $
Proceeds, before expenses, to Motorola.................... % $
</TABLE>
(1) Plus accrued interest from November , 2000, if settlement occurs
after that date
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal offense.
The notes will be ready for delivery in book-entry form only through The
Depository Trust Company, Clearstream Banking or the Euroclear System, as the
case may be, on or about November , 2000.
------------
Merrill Lynch & Co.
Chase Securities Inc. Goldman, Sachs & Co.
Banc of America Deutsche Banc Alex. Brown Morgan Stanley Dean
Securities LLC Witter
Salomon Smith Barney UBS Warburg LLC
------------
The date of this prospectus supplement is November , 2000.
The information in this prospectus supplement is not complete and may be
changed. A registration statement relating to these securities has been filed
with the Securities and Exchange Commission and is effective. This prospectus
supplement and the accompanying prospectus are not an offer to sell these
securities and they are not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
<PAGE>
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<S> <C>
Use of Proceeds............................................................ S-3
Capitalization............................................................. S-3
Summary Consolidated Financial Data........................................ S-4
Description of the Notes................................................... S-5
Underwriting............................................................... S-10
Legal Matters.............................................................. S-12
Prospectus
About This Prospectus...................................................... 2
Where You Can Find More Information........................................ 3
The Company................................................................ 4
Use of Proceeds............................................................ 4
Ratios of Earnings to Fixed Charges........................................ 4
Description of Debt Securities............................................. 5
Description of Capital Stock............................................... 16
Description of Securities Warrants......................................... 20
Plan of Distribution....................................................... 23
Legal Matters.............................................................. 24
Experts.................................................................... 24
</TABLE>
S-2
<PAGE>
USE OF PROCEEDS
The net proceeds to be received by us from the offering, after deducting the
estimated underwriting discount and estimated expenses, are estimated to be
approximately $993 million. The net proceeds will be used to reduce short-term
indebtedness and for general corporate purposes. On November 3, 2000, we had
outstanding approximately $6.6 billion of commercial paper, with a weighted
average maturity of approximately 95 days and bearing a weighted average
interest rate of approximately 6.5% per annum.
CAPITALIZATION
The following table sets forth our consolidated short-term debt and
capitalization as of September 30, 2000, and as adjusted to give effect to the
sale of the notes (after deducting the estimated underwriting discount and
estimated offering expenses) and the anticipated application of the net
proceeds from the sale of the notes to reduce short-term indebtedness. From
time to time, we may issue additional debt or equity securities. The following
information should be read in conjunction with our consolidated financial
statements, including the notes thereto, which are incorporated herein by
reference. See "Where You Can Find More Information" in the accompanying
prospectus.
<TABLE>
<CAPTION>
September 30, 2000
--------------------
Actual As Adjusted
------- -----------
(in millions of
dollars)
<S> <C> <C>
Short-Term Debt
Commercial paper........................................ $ 5,257 $ 4,264
Notes payable and other short-term debt................. 0 0
Current portion of long-term debt....................... 5 5
------- -------
Total short-term debt................................. $ 5,262 $ 4,269
======= =======
Long-Term Debt(a)
Senior notes and debentures............................. $ 2,981 $ 2,981
Other senior debt....................................... 130 130
Notes offered hereby.................................... 0 1,000
Less current portion of long-term debt.................. (5) (5)
------- -------
Total long-term debt.................................. 3,106 4,106
------- -------
Company-obligated mandatorily redeemable preferred
securities of subsidiary trust holding solely company-
guaranteed debentures.................................... 484 484
Stockholders' Equity(b)
Preferred stock (none issued)........................... 0 0
Common stock............................................ 6,554 6,554
Additional paid-in capital.............................. 928 928
Retained earnings....................................... 9,680 9,680
Non-owner changes to equity............................. 3,496 3,496
------- -------
Total stockholders' equity............................ 20,658 20,658
------- -------
Total capitalization................................ $24,248 $25,248
======= =======
</TABLE>
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(a) For additional information on long-term debt, see Note 4 of the Notes to
Consolidated Financial Statements for December 31, 1999, included in our
Current Report on Form 8-K/A filed with the Securities and Exchange
Commission on June 2, 2000 and incorporated by reference herein.
(b) For additional information on stockholders' equity, see the Consolidated
Financial Statements for December 31, 1999, included in our Current Report
on Form 8-K/A filed with the Securities and Exchange Commission on June 2,
2000 and incorporated by reference herein, and Note 3 thereto.
S-3
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(in millions of dollars)
The summary consolidated financial data of Motorola as of December 31, 1999
and 1998 and for the years ended December 31, 1999, 1998 and 1997 has been
derived from consolidated financial statements of Motorola which have been
audited by KPMG LLP, independent auditors, and incorporated by reference herein
from Motorola's Current Report on Form 8-K/A filed with the Securities and
Exchange Commission on June 2, 2000. The summary consolidated financial data of
Motorola as of December 31, 1997, 1996 and 1995 and for the years ended
December 31, 1996 and 1995 has been derived from audited consolidated financial
statements of Motorola audited by KPMG LLP, independent auditors, and of
General Instrument Corporation audited by Deloitte & Touche LLP, independent
auditors, previously filed with the Securities and Exchange Commission, but not
incorporated by reference herein. The summary consolidated financial data as of
and for the nine months ended September 30, 2000 and October 2, 1999, has been
derived from unaudited consolidated financial statements filed with the
Securities and Exchange Commission and incorporated by reference herein and, in
the opinion of management, contains all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of Motorola's
financial position and results of operations as of and for such periods.
Operating results for the nine months ended September 30, 2000, are not
necessarily indicative of the results that may be expected for the entire year
ending December 31, 2000. This information is qualified in its entirety by, and
should be read in conjunction with, the consolidated financial statements, the
notes thereto, and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" for Motorola incorporated by reference herein.
<TABLE>
<CAPTION>
Nine Months Ended Year Ended December 31,
------------------ -----------------------------------------
Sept 30, Oct 2,
2000 1999 1999 1998 1997 1996 1995
--------- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Results (1)
Net sales............. $ 27,516 $ 23,989 $33,075 $31,340 $31,498 $29,657 $28,495
Manufacturing and
other costs of sales. 16,838 14,612 20,631 19,396 18,532 17,854 16,345
Selling, general and
administrative
expenses............. 3,674 4,226 5,446 5,656 5,373 5,027 4,916
Restructuring and
other charges........ -- -- (226) 1,980 327 -- --
Research and
development
expenditures......... 3,293 2,528 3,560 3,118 2,930 2,572 2,321
Depreciation expense.. 1,718 1,680 2,243 2,255 2,394 2,367 1,961
Interest expense, net. 175 118 138 215 136 211 172
Total costs and
expenses............ 25,698 23,164 31,792 32,620 29,692 28,031 25,715
Net gain on Nextel
asset exchange....... -- -- -- -- -- -- 443
Earnings (loss) before
income taxes......... 1,818 825 1,283 (1,280) 1,806 1,626 3,223
Income tax provision
(benefit)............ 635 257 392 (373) 642 568 1,171
Net earnings (loss)... $ 1,183 $ 568 $ 891 $ (907) $ 1,164 $ 1,058 $ 2,052
Balance Sheet (1)
Total assets.......... $ 44,177 $ 36,895 $40,489 $30,951 $28,954 $25,665 $24,086
Working capital....... 3,953 4,765 4,679 2,532 4,597 3,696 2,938
Long-term debt and
redeemable preferred
securities........... 3,590 3,598 3,573 2,633 2,144 1,931 1,949
Total debt and
redeemable preferred
securities........... 8,852 5,093 6,077 5,542 3,426 3,328 3,554
Total stockholders'
equity............... $20,658 $16,435 $18,693 $13,913 $14,487 $12,843 $11,911
</TABLE>
--------
(1) These figures have been restated to reflect the merger with General
Instrument Corporation, which has been accounted for as a pooling-of-
interests.
S-4
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the notes offered
hereby supplements the description of the general terms and provisions of debt
securities set forth in the accompanying prospectus under the caption
"Description of Debt Securities."
General
The notes are a series of debt securities under the Senior Indenture dated
May 1, 1995 between Motorola and BNY Midwest Trust Company, as trustee, which
is more fully described in the accompanying prospectus. You can find
definitions for some of the capitalized terms in the accompanying prospectus.
The notes will mature on November , 2010. The notes will bear interest at
the rate set forth on the cover page of this prospectus supplement, payable
semi-annually on May and November of each year, commencing May , 2001, to
the registered holders thereof on the preceding May or November , as the
case may be.
The notes will not have the benefit of a sinking fund.
Payment of the principal and interest on the notes will rank equally with
all of our other unsecured and unsubordinated debt. As of September 30, 2000,
we had approximately $8,274 million of indebtedness (and approximately $691
million of guarantees by Motorola) that would have ranked equally with the
notes and approximately $578 million of indebtedness and redeemable preferred
securities that would have ranked junior to the notes.
The Senior Indenture does not limit the amount of additional indebtedness
that we or any of our subsidiaries may incur. The notes will be our exclusive
obligations. Since our operations are partially conducted through subsidiaries,
primarily overseas, the cash flow and the consequent ability to service debt,
including our notes, are partially dependent upon the earnings of our
subsidiaries and the distribution of those earnings to, or upon other payments
of funds by those subsidiaries to, us. The subsidiaries are separate and
distinct legal entities and have no obligation, contingent or otherwise, to pay
any amounts due on the notes or to make funds available for such payments,
whether by dividends, loans or other payments. In addition, the payment of
dividends and the making of loans and advances to us by our subsidiaries may be
subject to statutory or contractual restrictions, are contingent upon the
earnings of those subsidiaries, and are subject to various business
considerations.
Any right of Motorola to receive assets of any of its subsidiaries upon
their liquidation or reorganization (and the resulting right of the holders of
the notes to participate in those assets) will be effectively subordinated to
the claims of that subsidiary's creditors (including trade creditors), except
to the extent that Motorola is itself recognized as a creditor of such
subsidiary, in which case our claims would be subordinated to any security
interests in the assets of such subsidiary and any indebtedness of such
subsidiary senior to that held by us. As of September 30, 2000, our
subsidiaries had outstanding approximately $6.6 billion of liabilities.
The notes are subject to defeasance under the conditions described in the
accompanying prospectus and the Senior Indenture.
We may, without the consent of the holders of the notes, create and issue
additional notes ranking equally with the notes and otherwise similar in all
respects so that such further notes would be consolidated and form a single
series of the notes.
Redemption At Our Option
We may, at our option, redeem the notes in whole or in part at any time at a
redemption price equal to the greater of:
. 100% of the principal amount of the notes to be redeemed, plus accrued
interest to the redemption date, or
S-5
<PAGE>
. as determined by the Independent Investment Banker, the sum of the
present values of the remaining principal amount and scheduled payments
of interest on the notes to be redeemed (not including any portion of
payments of interest accrued as of the redemption date) discounted to
the redemption date on a semi-annual basis at the Treasury Rate plus
basis points, plus accrued interest to the redemption date.
The redemption price will be calculated assuming a 360-day year consisting
of twelve 30-day months.
"Treasury Rate" means, with respect to any redemption date, the rate per
year equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated on the third business day preceding the redemption
date, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
that redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the notes that would be used, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
notes.
"Comparable Treasury Price" means, with respect to any redemption date:
. the average of the Reference Treasury Dealer Quotations for that
redemption date, after excluding the highest and lowest of the Reference
Treasury Dealer Quotations, or
. if the trustee obtains fewer than three Reference Treasury Dealer
Quotations, the average of all Reference Treasury Dealer Quotations so
received.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the trustee after consultation with us.
"Reference Treasury Dealer" means (a) each of Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Chase Securities Inc. and Goldman, Sachs & Co. and their
respective successors, unless any of them ceases to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), in
which case we shall substitute another Primary Treasury Dealer; and (b) any
other Primary Treasury Dealer selected by us.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by that Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding that redemption date.
We will mail notice of any redemption at least 30 days but not more than 60
days before the redemption date to each holder of the notes to be redeemed.
Unless we default in payment of the redemption price, on and after the
redemption date, interest will cease to accrue on the notes or portions of the
notes called for redemption.
Book-Entry Notes
The notes will be issued in the form of one or more definitive global
securities in registered form. The global securities will be deposited, until
all obligations of Motorola with respect to the notes are satisfied, with, or
on behalf of, The Depository Trust Company ("DTC") and registered, at the
request of DTC, in the name of Cede & Co. Beneficial interests in the global
securities will be represented through book-entry accounts of financial
institutions acting on behalf of beneficial owners as direct and indirect
participants in DTC. Investors may elect to hold their interests in the global
securities through either DTC (in the United States) or
S-6
<PAGE>
Clearstream Banking, societe anonyme or Morgan Guaranty Trust Company of New
York, Brussels Office, as operator of the Euroclear System, either directly, if
they are participants in such systems, or indirectly through organizations that
are participants in such systems. Clearstream Banking and Euroclear will hold
interests on behalf of their participants through customers' securities
accounts in Clearstream Banking's and Euroclear's names on the books of their
respective U.S. depositaries, which in turn will hold such interests in
customers' securities accounts in the U.S. depositaries' names on the books of
DTC. The Chase Manhattan Bank will act as U.S. depositary for Euroclear, and
Citibank, N.A. will act as U.S. depositary for Clearstream Banking. Beneficial
interests in the global securities may be held in denominations of $1,000 and
integral multiples of $1,000. The global securities may be transferred, as a
whole but not in part, only to another nominee of DTC or to a successor of DTC
or its nominee.
So long as DTC or its nominee is the registered owner of a global security,
DTC or such nominee, as the case may be, will be considered the sole owner and
holder of the notes represented by such global security for all purposes of the
notes and the indenture, as the case may be. Owners of beneficial interests in
global securities will not be entitled to have the notes represented by such
global securities registered in their names. Accordingly, each person owning a
beneficial interest in a global security must rely on the procedures of DTC, or
its nominee, and, if such person is not a participant, on the procedures of the
participant through which such person owns its interest, to exercise any rights
of a holder of notes.
Principal and interest payments on notes registered in the name of DTC or
its nominee will be made to DTC or its nominee, as the case may be, as the
registered owner of the global securities. None of Motorola, the trustee or any
paying agent or registrar for the notes will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial interests in the global securities or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
We expect that DTC or its nominee, upon receipt of any payment of principal
or interest, will credit the participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of the global securities as shown on the records of DTC or its nominee. We also
expect that payments by participants to owners of beneficial interests in the
global securities held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
in "street name", and will be the responsibility of such participants.
DTC advises that it is a limited-purpose trust company organized under the
laws of the State of New York, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code and a "clearing agency" registered under the provisions of Section 17A of
the Securities Exchange Act of 1934. DTC was created to hold securities of DTC
participants and to facilitate the clearance and settlement of securities
transactions among DTC participants in such securities through electronic book-
entry changes in accounts of DTC participants, thereby eliminating the need for
physical movement of securities. DTC participants include securities brokers
and dealers (including underwriters), banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's book-entry system
is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a DTC
participant, either directly or indirectly. DTC agrees with and represents to
DTC participants that it will administer its book-entry system in accordance
with its rules and by-laws and requirements of law.
Clearstream Banking advises that it is incorporated under the laws of
Luxembourg as a professional depositary. Clearstream Banking holds securities
for its customers and facilitates the clearance and settlement of securities
transactions between Clearstream customers through electronic book-entry
changes in accounts of Clearstream customers, thereby eliminating the need for
physical movement of certificates. Clearstream Banking provides to Clearstream
customers, among other things, services for safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. As a bank, Clearstream Banking is subject to regulation
by the Luxembourg Commission for the Supervision of the Financial Sector
(Commission de Surveillance du Secteur Financier). Clearstream customers are
financial
S-7
<PAGE>
institutions, including underwriters, securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations, and may
include the underwriters. Indirect access to Clearstream Banking is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Clearstream customer
either directly or indirectly.
Distributions with respect to notes held beneficially through Clearstream
Banking will be credited to cash accounts of Clearstream customers in
accordance with its rules and procedures, to the extent received by the U.S.
depositary for Clearstream Banking.
Euroclear advises that it was created in 1968 to hold securities for
participants of Euroclear and to clear and settle transactions among Euroclear
participants through simultaneous electronic book-entry delivery against
payment, thereby eliminating the need for physical movement of certificates and
any risk from lack of simultaneous transfers of securities and cash. Euroclear
includes various other services, including securities lending and borrowing,
and interfaces with domestic markets in several countries. Euroclear is
operated by the Brussels, Belgium office of Morgan Guaranty Trust Company of
New York (the "Euroclear operator"), under contract with Euroclear Clearance
Systems S.C., a Belgian cooperative corporation (the "cooperative"). All
operations are conducted by the Euroclear operator, and all Euroclear
securities clearance accounts and Euroclear cash accounts are accounts with the
Euroclear operator, not the cooperative. The cooperative establishes policies
for Euroclear on behalf of Euroclear participants. Euroclear participants
include banks (including central banks), securities brokers and dealers and
other professional financial intermediaries and may include the underwriters.
Indirect access to Euroclear is also available to other firms that clear
through or maintain a custodial relationship with a Euroclear participant,
either directly or indirectly.
The Euroclear operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities
and cash from Euroclear and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear operator acts under the Terms and Conditions only on behalf of
Euroclear participants and has no record of or relationship with persons
holding through Euroclear participants.
Distributions with respect to notes held beneficially through Euroclear will
be credited to the cash accounts of Euroclear participants in accordance with
the Terms and Conditions, to the extent received by the U.S. depositary for
Euroclear.
Notes will not be issued in individual certificated form, except in very
limited circumstances as set forth under "Description of Debt Securities --
Global Securities" in the accompanying prospectus. In addition, if any of
Euroclear, Clearstream Banking or DTC notifies Motorola that it is unwilling or
unable to continue as a clearing system in connection with the global
securities or, in the case of DTC only, DTC ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, and in each case a
successor clearing system is not appointed by Motorola within 90 days after
receiving such notice from Euroclear, Clearstream Banking or DTC or on becoming
aware that DTC is no longer so registered, Motorola will issue or cause to be
issued individual certificates in registered form on registration of transfer
of, or in exchange for, book-entry interests in the notes represented by such
global securities upon delivery of such global securities for cancellation. In
the event individual certificates for the notes are issued, the holders thereof
will be able to receive payments on the notes and effect transfers of the notes
at the offices of the paying agent and transfer agent.
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<PAGE>
Global Clearance and Settlement Procedures
Initial settlement for the notes will be made in immediately available
funds. Secondary market trading between DTC participants will occur in the
ordinary way in accordance with DTC rules and will be settled in immediately
available funds using DTC's Same-Day Funds Settlement System. Secondary market
trading between Clearstream customers and/or Euroclear participants will occur
in the ordinary way in accordance with the applicable rules and operating
procedures of Clearstream Banking and Euroclear and will be settled using the
procedures applicable to conventional Eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly
through DTC on the one hand, and directly or indirectly through Clearstream
customers or Euroclear participants, on the other, will be effected in DTC in
accordance with DTC's rules on behalf of the relevant European international
clearing system by its U.S. depositary; however, such cross-market transactions
will require delivery of instructions to the relevant European international
clearing system by the counterparty in such systems in accordance with its
rules and procedures and within its established deadlines (European time). The
relevant European international clearing system will, if the transaction meets
its settlement requirements, deliver instructions to its U.S. depositary to
take action to effect final settlement on its behalf by delivering or receiving
notes in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Clearstream
customers and Euroclear participants may not deliver instructions directly to
the U.S. depositaries.
Because of time-zone differences, credits of notes received in Clearstream
Banking or Euroclear as a result of a transaction with a DTC participant will
be made during subsequent securities settlement processing and dated the
business day following the DTC settlement date. Such credits or any
transactions in such notes settled during such processing will be reported to
the relevant Clearstream customers or Euroclear participants on such business
day. Cash received in Clearstream Banking or Euroclear as a result of sales of
notes by or through a Clearstream customer or a Euroclear participant to a DTC
participant will be received with value on the DTC settlement date but will be
available in the relevant Clearstream or Euroclear cash account only as of the
business day following settlement in DTC.
Although DTC, Clearstream Banking and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of notes among participants of DTC,
Clearstream Banking and Euroclear, they are under no obligation to perform or
continue to perform such procedures and such procedures may be discontinued at
any time.
S-9
<PAGE>
UNDERWRITING
We intend to offer the notes through the underwriters. Subject to the terms
and conditions contained in an underwriting agreement between us and the
underwriters, we have agreed to sell to the underwriters and the underwriters
severally have agreed to purchase from us, the respective principal amount of
the notes listed opposite their names below.
<TABLE>
<CAPTION>
Principal
Amount
Underwriters of Notes
------------ ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................ $
Chase Securities Inc.........................................
Goldman, Sachs & Co..........................................
Banc of America Securities LLC...............................
Deutsche Bank Securities Inc.................................
Morgan Stanley & Co. Incorporated............................
Salomon Smith Barney Inc. ...................................
UBS Warburg LLC..............................................
--------------
Total................................................... $1,000,000,000
==============
</TABLE>
The underwriters have agreed to purchase all of the notes sold pursuant to
the underwriting agreement if any of the notes are purchased. If an underwriter
defaults, the underwriting agreement provides that the purchase commitments of
the nondefaulting underwriters may be increased or the underwriting agreement
may be terminated.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriters may be required to make in respect of those
liabilities.
The underwriters are offering the notes, subject to prior sale, when, as
and if issued to and accepted by them, subject to approval of legal matters by
their counsel, including the validity of the notes, and other conditions
contained in the underwriting agreement, such as the receipt by the
underwriters of officer's certificates and legal opinions. The underwriters
reserve the right to withdraw, cancel or modify offers to the public and to
reject orders in whole or in part.
Commissions and Discounts
The underwriters have advised us that they propose initially to offer the
notes to the public at the public offering price on the cover page of this
prospectus supplement, and to dealers at that price less a concession not in
excess of % of the principal amount of the notes. The underwriters may
allow, and the dealers may reallow, a discount not in excess of % of the
principal amount of the notes to other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.
The expenses of offering, not including the underwriting discount, are
estimated to be approximately $850,000 and are payable by us.
New Issue of Notes
The notes are a new issue of securities with no established trading
market. We do not intend to apply for listing of the notes on any national
securities exchange or for quotation of the notes on any automated dealer
quotation system. We have been advised by the underwriters that they presently
intend to make a market
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<PAGE>
in the notes after completion of the offering. However, they are under no
obligation to do so and may discontinue any market-making activities at any
time without any notice. We cannot assure the liquidity of the trading market
for the notes or that an active public market for the notes will develop. If an
active public trading market for the notes does not develop, the market price
and liquidity of the notes may be adversely affected.
Price Stabilization and Short Positions
In connection with the offering, the underwriters are permitted to engage in
transactions that stabilize the market price of the notes. Such transactions
may consist of bids or purchases to peg, fix or maintain the price of the
notes. If the underwriters create a short position in the notes in connection
with the offering, i.e., if they sell more notes than are on the cover page of
this prospectus supplement, the underwriters may reduce that short position by
purchasing notes in the open market. Purchases of a security to stabilize the
price or to reduce a short position could cause the price of the security to be
higher than it might be in the absence of such purchases.
Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the notes. In addition, neither we nor
any of the underwriters makes any representation that the underwriters will
engage in these transactions or that these transactions, once commenced, will
not be discontinued without notice.
Other Relationships
From time to time, the underwriters and certain of their affiliates have
engaged, and may in the future engage, in transactions with, and perform
services for, Motorola and its affiliates in the ordinary course of business.
H. Laurance Fuller, a director of Motorola, is also a director of The Chase
Manhattan Corporation and The Chase Manhattan Bank, which are affiliates of
Chase Securities Inc. Dr. Walter E. Massey, a director of Motorola, is also a
director of Bank of America Corporation, which is an affiliate of Banc of
America Securities LLC.
S-11
<PAGE>
LEGAL MATTERS
The validity of the notes will be passed upon for Motorola by Jeffrey A.
Brown of our Law Department and Winston & Strawn, Chicago, Illinois. As of
November 1, 2000, Mr. Brown owned approximately 844 shares of common stock and
held options to purchase 11,400 shares of common stock, of which options to
purchase 3,100 shares were currently exercisable. Certain legal matters
relating to the notes will be passed upon for the underwriters by Mayer, Brown
& Platt, Chicago, Illinois. Mayer, Brown & Platt provides legal services to
Motorola from time to time.
S-12
<PAGE>
PROSPECTUS
$1,000,000,000
[MOTOROLA LOGO]
Debt Securities and Debt Securities Warrants
Common Stock and Common Stock Warrants
----------------
We may use this prospectus to offer and sell securities from time to time.
The types of securities we may sell include:
. unsecured senior debt securities . common stock
. unsecured subordinated debt . warrants to purchase common stock
securities
. units consisting of any
. warrants to purchase debt combination of these securities
securities
We will provide the specific terms of these securities in supplements to
this prospectus prepared in connection with each offering. These terms may
include:
In the case of any
securities:
In the case of debt
. offering price securities:
In the case of
warrants:
. size of offering . interest rate
. underwriting discounts . maturity . the types of
securities that
may be acquired
upon exercise
. denomination or . ranking
currency (other than
with respect to common
stock)
. whether they may be
redeemed prior to . expiration date
maturity
. exercise price
. whether they are
convertible into . conditions to
common stock exercisability
The securities offered will contain other significant terms and conditions.
Please read this prospectus and the applicable prospectus supplement carefully
before you invest.
----------------
These securities have not been approved by the Securities and Exchange
Commission or any state securities commission, nor have they determined if
this prospectus is accurate or complete. Any representation to the contrary is
a criminal offense.
----------------
The date of this prospectus is November 7, 2000.
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. You
should read this prospectus and the applicable prospectus supplement together
with the additional information described below under the heading "Where You
Can Find More Information."
The registration statement that contains this prospectus (including the
exhibits) contains additional important information about Motorola, Inc. and
the securities offered under this prospectus. Specifically, we have filed
certain legal documents that control the terms of the securities offered by
this prospectus as exhibits to the registration statement. We will file certain
other legal documents that control the terms of the securities offered by this
prospectus as exhibits to reports we file with the SEC. That registration
statement and the other reports can be read at the SEC web site or at the SEC
offices mentioned under the heading "Where You Can Find More Information."
2
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file with the SEC at its public reference facilities at
450 Fifth Street, N.W., Washington, D.C. 20549. You can also obtain copies of
the documents at prescribed rates by writing to the Public Reference Section
of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the operation of the public
reference facilities. Our SEC filings are also available at the office of the
New York Stock Exchange. For further information on obtaining copies of our
public filings at the New York Stock Exchange, you should call (212) 656-5060.
We "incorporate by reference" into this prospectus the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus and information that we file subsequently
with the SEC will automatically update this prospectus. We incorporate by
reference the documents listed below and any filings we make with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 after the initial filing of the registration statement that contains this
prospectus and prior to the time that we sell all the securities offered by
this prospectus:
. Annual Report on Form 10-K for the fiscal year ended December 31, 1999.
. Current Report on Form 8-K, dated January 5, 2000, as amended on March
17, 2000.
. Current Report on Form 8-K, dated March 23, 2000, as amended on March
24, 2000, June 2, 2000 and November 7, 2000.
. Quarterly Reports on Form 10-Q for the quarters ended September 30,
2000, July 1, 2000 and April 1, 2000.
. The description of the Common Stock included in the Registration
Statement on Form 8-B dated
July 2, 1973, including any amendments or reports filed for the purpose
of updating such description.
. The description of the Company's Preferred Stock Purchase Rights
included in the Registration Statement on Form 8-A dated November 5,
1998, as amended.
You may request a copy of these filings (other than exhibits, unless that
exhibit is specifically incorporated by reference into that filing) at no
cost, by writing to or telephoning us at the following address:
A. Peter Lawson
Secretary, Motorola, Inc.
1303 East Algonquin Road
Schaumburg, Illinois 60196
Telephone: (847) 576-5000.
You should rely only on the information contained or incorporated by
reference in this prospectus or the applicable prospectus supplement. We have
not authorized anyone else to provide you with different information. We may
only use this prospectus to sell securities if it is accompanied by a
prospectus supplement. We are only offering these securities in states where
the offer is permitted. You should not assume that the information in this
prospectus or the applicable prospectus supplement is accurate as of any date
other than the dates on the front of those documents.
3
<PAGE>
THE COMPANY
Motorola is a global leader in providing integrated communications solutions
and embedded electronic solutions. These include:
. Software-enhanced wireless telephone, two-way radio, messaging and
satellite communications products and systems, as well as networking and
Internet-access products, for consumers, network operators, and
commercial, government and industrial customers.
. Embedded semiconductor solutions for customers in networking,
transportation, wireless communications and imaging and entertainment
markets.
. Embedded electronic systems for automotive, communications, imaging,
manufacturing systems, computer and industrial markets.
. Digital and analog systems and set-top terminals for broadband cable
television operators.
Motorola 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).
USE OF PROCEEDS
Unless the applicable prospectus supplement provides otherwise, we will use
the net proceeds from the sale of the offered securities for general corporate
purposes.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the unaudited consolidated ratios of earnings to fixed
charges for each of the years in the five-year period ended December 31, 1999
and the nine months ended September 30, 2000:
<TABLE>
<CAPTION>
Nine Months
Year Ended December 31, Ended
------------------------- September 30,
1999 1998 1997 1996 1995 2000
---- ---- ---- ---- ---- -------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges...... 3.5 --(a) 6.3 5.2 12.0 4.8
</TABLE>
--------
(a) Earnings were inadequate to cover fixed charges by $1.2 billion.
For purposes of computing the ratios of earnings to fixed charges, we have
divided income before income tax expense plus fixed charges by fixed charges.
Fixed charges consist of interest costs and estimated interest included in
rentals (one-third of net rental expense).
4
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following is a general description of the debt securities that we may
offer from time to time. The particular terms of the debt securities offered by
any prospectus supplement and the extent, if any, to which the general
provisions described below may apply will be described in the applicable
prospectus supplement.
The debt securities will be either senior debt securities or subordinated
debt securities. The "Senior Securities" will be issued under the "Senior
Indenture" dated May 1, 1995 between the Company and BNY Midwest Trust Company
(as successor trustee to Harris Trust and Savings Bank), as trustee (or any
further successor trustee). The "Subordinated Securities" will be issued under
a "Subordinated Indenture" between the Company and the trustee named therein
(or any successor trustee). The Senior Indenture and the Subordinated Indenture
are collectively referred to in this prospectus as the "Indentures," and each
of the trustee under the Senior Indenture and the trustee under the
Subordinated Indenture are referred to in this prospectus as a "Trustee." The
Indentures are included as exhibits to the registration statement and the
following description is qualified in its entirety by reference to the
provisions of the Indentures and the applicable prospectus supplement. You
should read these documents carefully to fully understand the terms of the debt
securities.
The numerical references in parentheses below are to sections of the
Indentures. Unless otherwise indicated, capitalized terms used in the following
summary that are defined in the Indentures have the meanings used in the
Indentures. As used in this "Description of Debt Securities," the "Company"
refers to Motorola, Inc. and does not, unless the context otherwise indicates,
include its subsidiaries.
General
The Senior Securities are unsubordinated obligations of the Company. They
will be unsecured and will rank equally with each other and all of our other
unsubordinated debt, unless otherwise indicated in the applicable prospectus
supplement. (Section 301 of the Senior Indenture.) Each applicable prospectus
supplement will set forth, as of the most recent practicable date, the
aggregate amount of outstanding debt that would rank junior to the Senior
Securities. The Subordinated Securities are subordinated in right of payment to
the prior payment in full of the Senior Indebtedness of the Company. See "--
Subordinated Indenture Provisions" below. The Subordinated Securities will be
unsecured and will rank equally with each other, unless otherwise indicated in
the applicable prospectus supplement. (Section 301 of the Subordinated
Indenture.) Each applicable prospectus supplement will set forth, as of the
most recent practicable date, the aggregate amount of outstanding debt that
would rank senior to the Subordinated Securities. The Indentures do not limit
the aggregate principal amount of debt securities that may be issued thereunder
and provide that debt securities may be issued thereunder from time to time in
one or more series.
Terms
We will prepare a prospectus supplement for each series of debt securities
that we issue. Each prospectus supplement will set forth the applicable terms
of the debt securities to which it relates, which may include the following:
. the title of the securities;
. any limit on the aggregate principal amount of the securities;
. the maturity;
. the interest rate and the date from which interest will accrue;
. the interest payment dates and the record dates for payment of interest,
or the discount to face value and accretion rate in the case of debt
securities issued at a substantial discount to the principal amount;
. the price and date of any optional redemption by the Company;
5
<PAGE>
. the obligation, if any, of the Company to redeem the offered securities
and any requirement to maintain a "sinking fund" to support such
obligation;
. the currency or currencies in which the Company will pay principal or
interest;
. any conversion features; and
. whether the defeasance or covenant defeasance provisions of the
applicable Indenture apply.
The Company can also establish any other terms and conditions of the debt
securities to the extent they do not conflict with the terms of the Indentures.
(Section 301 of each Indenture.) Therefore, you must read the applicable
Indenture and prospectus supplement carefully to understand the terms of any
series of debt securities.
Effective Subordination
The debt securities will be obligations exclusively of the Company. Since
the Company's operations are partially conducted through subsidiaries,
primarily overseas, the Company's cash flow and therefore its ability to
service debt, including the debt securities offered by the applicable
prospectus supplement, are partially dependent upon the earnings of its
subsidiaries and the distribution of those earnings to, or upon loans or other
payments of funds by those subsidiaries to, the Company. The subsidiaries are
separate and distinct legal entities and have no obligation to pay any amounts
due pursuant to the debt securities or to make any funds available to the
Company to repay its obligations, whether by dividends, loans or other
payments. In addition, the payment of dividends and the making of loans and
advances to the Company by its subsidiaries may be subject to statutory or
contractual restrictions, are contingent upon the earnings of those
subsidiaries and are subject to various business considerations.
Any right of the Company to receive assets of any of its subsidiaries upon
their liquidation or reorganization and therefore the right of the holders of
the debt securities to participate in those assets will be effectively
subordinated to the claims of that subsidiary's creditors, including trade
creditors.
No Limitations on Other Debt
The general provisions of the Indentures do not contain any provisions that
would limit the ability of the Company to incur indebtedness or that would
afford holders of debt securities protection in the event of a highly leveraged
or similar transaction involving the Company. However, the Indentures do
restrict the Company and its domestic subsidiaries from granting certain
security interests on certain of their property or assets unless the debt
securities are equally secured. See "--Restrictive Covenants" below.
Open-Ended Indenture
The Indentures are "open-ended," meaning the Company may issue a number of
different series of debt securities, with different terms and conditions, under
each of the Indentures. (Section 301 of each Indenture.) There is no limit on
the amount of debt securities the Company can issue under either Indenture, and
the Company has already issued a significant amount of debt securities under
the Senior Indenture.
Defeasance and Covenant Defeasance
Under the Indentures, the Company has the ability to take certain steps to
effect a "defeasance" or a "covenant defeasance." A "defeasance" allows the
Company to be discharged from any and all obligations in respect of a series of
debt securities (except for certain obligations to register the transfer or
exchange of such debt securities, to replace temporary, destroyed, stolen, lost
or mutilated debt securities, to maintain paying
6
<PAGE>
agencies and to hold monies for payment in trust). A "covenant defeasance"
allows the Company to stop complying with certain restrictive covenants
relating to:
. consolidation, merger, conveyance, transfer or lease;
. maintenance of the Company's existence and properties;
. payment of taxes and other claims; and
. restrictions on secured debt and sale and leaseback transactions.
A "covenant defeasance" also causes certain events specified in the
Indentures to no longer be deemed an Event of Default under the Indentures.
To effect a "defeasance" or a "covenant defeasance," the Company must
deposit with the applicable Trustee an amount of money or U.S. government
securities that, through the payment of interest and principal in respect
thereof in accordance with their terms, will provide money in an amount
sufficient to pay the principal of (and premium, if any) and each installment
of interest, if any, on the debt securities of such series at the time such
payments are due. The Company will remain liable for any shortfall between the
amount deposited with the Trustee and the amount due holders of debt securities
upon any acceleration of payment.
The Company may only effect a "defeasance" or a "covenant defeasance" if it
has provided a legal opinion that such action will not cause holders of such
debt securities to recognize income, gain or loss for federal income tax
purposes as a result and that holders will be subject to federal income tax on
the same amount and in the same manner and at the same times as would have been
the case if such deposit and defeasance had not occurred. Such opinion, in the
case of a "defeasance," must refer to and be based upon a ruling of the
Internal Revenue Service or a change in applicable Federal income tax law
occurring after the date of the applicable Indenture.
The applicable prospectus supplement may further describe the provisions, if
any, regarding defeasance or covenant defeasance with respect to the debt
securities of a particular series. (Article Fifteen of each Indenture.)
Restrictive Covenants
Restrictions on Secured Debt
If the Company or any Domestic Subsidiary incurs or guarantees any Debt
secured by a Mortgage on any Principal Property or on any shares of stock or
Debt of any Domestic Subsidiary, the Company must secure the debt securities of
each series equally and ratably with (or prior to) such secured Debt, unless,
after giving effect to such transaction, the aggregate amount of all such Debt
so secured, together with all Attributable Debt in respect of sale and
leaseback transactions involving Principal Properties (see "--Restrictions on
Sales and Leasebacks" below), would not exceed 5% of the Consolidated Net
Tangible Assets of the Company and its consolidated subsidiaries.
This restriction does not apply to, and there will be excluded from secured
Debt in any computation under such restriction, Debt secured by:
(a) Mortgages on property of, or on any shares of stock of or Debt of,
any corporation existing at the time such corporation becomes a Domestic
Subsidiary or at the time it is merged into or consolidated with the
Company or a Domestic Subsidiary;
(b) Mortgages in favor of the Company or a Domestic Subsidiary;
(c) Mortgages in favor of governmental bodies to secure progress or
advance payments;
(d) Mortgages on property, shares of stock or Debt existing at the time
of acquisition thereof (including acquisition through merger or
consolidation);
7
<PAGE>
(e) purchase money Mortgages and Mortgages to secure the construction
cost of property; and
(f) any extension, renewal or refunding of any Mortgage referred to in
clauses (a) through (e), above.
Restrictions on Sales and Leasebacks
Neither the Company nor any Domestic Subsidiary may enter into any sale and
leaseback transaction involving any Principal Property, completion of
construction and commencement of full operation of which has occurred more
than 180 days prior thereto, unless (a) the Company or such Domestic
Subsidiary could mortgage such property as provided for above under "--
Restrictive Covenants--Restrictions on Secured Debt" in an amount equal to the
Attributable Debt with respect to the sale and leaseback transaction without
equally and ratably securing the debt securities of each series or (b) the
Company, within 120 days, applies to the retirement of its Funded Debt an
amount not less than the greater of (i) the net proceeds of the sale of the
Principal Property leased pursuant to such arrangement or (ii) the fair market
value of the Principal Property so leased (subject to credits for certain
voluntary retirements of Funded Debt). This restriction will not apply to any
sale and leaseback transaction (a) between the Company and a Domestic
Subsidiary or between Domestic Subsidiaries or (b) involving the taking back
of a lease for a period, including renewals, of three years or less. (Section
1011 of each Indenture.)
Certain Definitions
The following are certain key definitions used in the descriptions above of
restrictions on secured debt and sales and leasebacks contained in the
Indentures. These and other definitions are contained in the Indentures. You
should read the applicable Indenture to understand these restrictions fully.
"Attributable Debt" means the total net amount of rent required to be paid
during the remaining term of any lease, discounted at the rate per annum borne
by the Senior Securities of each series, compounded annually.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (a) all current liabilities (excluding any constituting Funded Debt
by reason of their being renewable or extendable) and (b) goodwill and other
intangibles. (Section 1010 of each Indenture.)
"Domestic Subsidiary" means a Subsidiary of the Company except a Subsidiary
of the Company which neither transacts any substantial portion of its business
nor regularly maintains any substantial portion of its fixed assets within the
United States, or which is engaged primarily in financing the operations of
the Company or its Subsidiaries, or both, outside the United States.
"Principal Property" includes any single parcel of real estate, any
manufacturing plant or warehouse owned or leased by the Company or any
Domestic Subsidiary which is located within the United States and the gross
book value (without deduction of any depreciation reserves) of which on the
date as of which the determination is being made exceeds 1% of Consolidated
Net Tangible Assets, other than any manufacturing plant or warehouse or a
portion thereof (a) which is a pollution control or other facility financed by
obligations issued by a state or local government unit or (b) which, in the
opinion of the Board of Directors of the Company, is not of material
importance to the total business conducted by the Company and its subsidiaries
as an entirety.
"Subsidiary of the Company" means a corporation, a majority of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company and/or one or more Subsidiaries of the Company.
Events of Default
The following are Events of Default under the Indentures with respect to
any debt securities:
. failure to pay principal of (or premium, if any) on any debt security of
that series when due;
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<PAGE>
. failure to pay any installment of interest on any debt security of that
series when due, continued for 30 days;
. failure to deposit any sinking fund payment, when due, in respect of any
debt security of that series;
. failure to perform any other covenant of the Company in the applicable
Indenture (other than a covenant included in the applicable Indenture
solely for the benefit of any series of debt securities other than that
series), continued for 60 days after written notice as provided in the
applicable Indenture;
. certain events in bankruptcy, insolvency or reorganization; and
. any other Event of Default provided with respect to debt securities of
that series. (Section 501 of each Indenture.)
If an Event of Default with respect to the outstanding debt securities of
any series occurs and continues either the Trustee or the holders of at least
25% in principal amount of the outstanding debt securities of that series may
declare the principal amount of all debt securities of that series to be due
and payable immediately; provided that in the case of certain events of
bankruptcy, insolvency or reorganization, such principal amount (or portion
thereof) will automatically become due and payable. However, at any time after
an acceleration with respect to debt securities of any series has occurred, but
before a judgment or decree based on such acceleration has been obtained, the
holders of a majority in principal amount of the outstanding debt securities of
that series may, under certain circumstances, rescind and annul such
acceleration. (Section 502 of each Indenture.) For information as to waiver of
defaults, see "--Modification and Waiver." You must read the applicable
prospectus supplement for a description of the acceleration provisions of any
debt securities issued as original issue discount or indexed securities.
Subject to the duty of the Trustee during default to act with the required
standard of care, the Trustee will be under no obligation to exercise any of
its rights or powers under the applicable Indenture at the request or direction
of any of the holders, unless such holders have offered the Trustee reasonable
security or indemnity. (Section 603 of each Indenture.) Subject to such
indemnification and certain other limitations, the holders of a majority in
principal amount of the outstanding debt securities of any series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the debt securities of that series. (Section 512
of the Senior Indenture and Section 505 of the Subordinated Indenture.)
The Company will be required to furnish to the Trustee an annual statement
as to the performance by the Company of certain of its obligations under the
applicable Indenture and as to any default in such performance. (Section 1006
of each Indenture.)
Modification and Waiver
Modifications and amendments of each Indenture may be made by the Company
and the Trustee with the consent of the holders of 66 2/3% in principal amount
of the outstanding debt securities of each series affected thereby; provided,
however, that no such modification or amendment may, without the consent of the
holder of each outstanding debt security affected thereby:
. change the stated maturity date of the principal of, or any installment
of principal of or interest on, any debt security;
. reduce the principal amount of (or premium, if any) or interest, if any,
on, any debt security;
. reduce the amount of principal of any original issue discount debt
security payable upon acceleration of the maturity thereof;
. change the place or currency of payment of principal of (or premium, if
any) or interest, if any, on, any debt security;
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<PAGE>
. impair the right to institute suit for the enforcement of any payment on
or with respect to any debt security; or
. reduce the percentage in principal amount of outstanding debt securities
of any series, the consent of the holders of which is required for
modification or amendment of the Indenture or for waiver of compliance
with certain provisions of the applicable Indenture or for waiver of
certain defaults. (Section 902 of each Indenture.)
The holders of a majority of the outstanding debt securities of any series
may on behalf of the holders of all debt securities of that series waive,
insofar as that series is concerned, compliance by the Company with certain
restrictive provisions of the applicable Indenture. (Section 1012 of each
Indenture.) The holders of a majority of the outstanding debt securities of any
series may on behalf of the holders of all debt securities of that series waive
any past default under the applicable Indenture with respect to debt securities
of that series, except a default in the payment of the principal of (or
premium, if any) or interest, if any, on any debt security of that series or in
respect of any provision which under the applicable Indenture cannot be
modified or amended without the consent of the holder of each outstanding debt
security of that series affected. (Section 513 of the Senior Indenture and
Section 504 of the Subordinated Indenture.)
In addition, under the Subordinated Indenture, no modification or amendment
thereof may, without the consent of the holders of each outstanding
subordinated debt security affected thereby, modify any of the provisions of
such Indenture relating to the subordination of the subordinated debt
securities in a manner adverse to the holders thereof without the consent of
all the holders thereof and no such modification or amendment may adversely
affect the rights of the holders of Senior Indebtedness then outstanding under
Article Sixteen of such Indenture (described under the caption "-- Subordinated
Indenture Provisions") without the consent of the requisite holders of Senior
Indebtedness (as required pursuant to the terms of such Senior Indebtedness).
(Section 902 of the Subordinated Indenture.)
Each Indenture contains provisions for convening meetings of the holders of
debt securities of a series issued thereunder if debt securities of that series
are issuable in whole or in part as bearer securities. (Section 1401 of each
Indenture.) A meeting may be called at any time by the Trustee for such debt
securities, or upon the request of the Company or the holders of at least 10%
in principal amount of the outstanding debt securities of such series, in any
such case upon notice given in accordance with the applicable Indenture.
(Section 1402 of each Indenture.) Except for any consent that must be given by
each holder of a debt security affected, any resolution presented at a meeting
or adjourned meeting at which a quorum is present may be adopted by the
affirmative vote of the holders of a majority in principal amount of the
outstanding debt securities of that series; provided, however, that, except for
any consent that must be given by each holder of a debt security affected, any
resolution with respect to any consent which may be given by the holders of not
less than 66 2/3% in principal amount of the outstanding debt securities of a
series issued under an Indenture may be adopted at a meeting or an adjourned
meeting at which a quorum is present only by the affirmative vote of the
holders of 66 2/3% in principal amount of such outstanding debt securities of
that series; and provided, further, that, except for any consent that must be
given by each holder of a debt security affected, any resolution with respect
to any demand, consent, waiver or other action which may be made, given or
taken by the holders of a specified percentage, which is less than a majority,
in principal amount of the outstanding debt securities of a series issued under
one of the Indentures may be adopted at a meeting or adjourned meeting at which
a quorum is present by the affirmative vote of the holders of such specified
percentage in principal amount of the outstanding debt securities of that
series. (Section 1404 of each Indenture.)
Any resolution passed or decision taken at any meeting of holders of debt
securities of any series duly held in accordance with the applicable Indenture
with respect thereto will be binding on all holders of debt securities of that
series and the related coupons issued under that Indenture. The quorum at any
meeting of holders of a series of debt securities called to adopt a resolution,
and at any reconvened meeting, will be persons holding or representing a
majority in principal amount of the outstanding debt securities of such series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent which may be
10
<PAGE>
given by the holders of not less than 66 2/3% in principal amount of the
outstanding debt securities of a series, the persons holding or representing 66
2/3% in principal amount of the outstanding debt securities of such series
issued under that Indenture will constitute a quorum. (Section 1404 of each
Indenture.)
Consolidation, Merger, Conveyance, Transfer or Lease
The Company, without the consent of any holders of outstanding debt
securities, may consolidate or merge with or into, or transfer or lease its
assets substantially as an entirety to, any entity, and any other entity may
consolidate or merge with or into, or transfer or lease its assets
substantially as an entirety to, the Company, provided that, (i) the entity (if
other than the Company) formed by such consolidation or into which the Company
is merged or which acquires or leases such assets of the Company is organized
and existing under the laws of any United States jurisdiction and assumes the
Company's obligations on the debt securities and under the applicable
Indenture, (ii) after giving effect to such transaction no Event of Default,
and no event which, after notice or lapse of time or both, would become an
Event of Default, has happened and is continuing (provided that a transaction
will only be deemed to be in violation of this condition (ii) as to any series
of debt securities as to which such Event of Default or such event has happened
and is continuing) and (iii) certain other conditions are met. (Article Eight
of each Indenture.)
Form, Denominations, Exchange, Registration and Transfer
Debt securities may be issued as registered securities or bearer securities,
and may be issued in global form. Global securities are described below under
"--Global Securities." Unless otherwise provided in the applicable prospectus
supplement, registered securities will be issued in denominations of $1,000 and
integral multiples thereof and bearer securities will be issued in
denominations of $5,000 and integral multiples thereof. Unless otherwise
indicated in the applicable prospectus supplement, bearer securities will have
interest coupons attached. (Section 201 of each Indenture.)
Registered securities will be exchangeable for other registered securities
of the same series. In addition, if a series of debt securities has been issued
as both registered securities and bearer securities, subject to certain
conditions, holders may exchange bearer securities for registered securities.
Registered securities generally may not be exchanged for bearer securities
unless the applicable prospectus supplement provides for such an exchange
(Section 305 of each Indenture.)
We will not mail bearer securities in connection with their original
issuance to any location in the United States. In addition, the United States
Internal Revenue Code of 1986, as amended (the "Code"), requires us to obtain
written certification from the initial purchaser of a bearer security to the
effect that: (i) such bearer security is not being acquired by or on behalf of
a United States person (as defined under the Code) or (ii) if a beneficial
interest in such bearer security is being acquired by or on behalf of a United
States person, that such United States person is a foreign branch of a United
States financial institution (as defined under the Code) that is purchasing for
its own account or for resale or such person is acquiring the bearer security
through the foreign branch of a United States financial institution and the
financial institution agrees, in either case, to comply with certain
requirements of the Code or (iii) such bearer security is being acquired by a
United States or foreign financial institution for resale during the restricted
period (as defined in the Code) and has not been acquired for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions. (Section 303 of each Indenture.)
You may present registered securities for registration of transfer at the
office of the Trustee, or at the office of any transfer agent designated by the
Company without service charge and upon payment of any taxes and other
governmental charges. (Section 305 of each Indenture.) The Company may change
transfer agents or designate additional transfer agents at any time, except
that, if the Company has issued a series of debt securities solely as
registered securities, it must maintain a transfer agent in each place of
payment for such series and, if the Company has issued a series of debt
securities as bearer securities, it must maintain a transfer agent in a place
of payment for such series located outside the United States. (Section 1002 of
each Indenture.)
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If the Company elects or is required to redeem or exchange particular debt
securities, it will not be required to (i) issue, register the transfer of or
exchange such debt securities for a period of 15 days before the first
publication or mailing of the notice of redemption or exchange, (ii) register
the transfer of or exchange any registered security selected for redemption or
(iii) exchange any bearer security selected for redemption except that a bearer
security selected for redemption may be exchanged for a registered security
that will be surrendered for redemption. (Section 305 of each Indenture.)
Global Securities
The following will apply to debt securities of any series, unless the
prospectus supplement relating to that series provides otherwise.
Upon issuance, the debt securities of each series will be represented by one
or more "global securities" which will be deposited with, or on behalf of, the
depositary and will be registered in the name of the depositary or a nominee of
the depositary. Unless otherwise indicated in the prospectus supplement
relating to a series of debt securities, The Depositary Trust Company ("DTC")
will act as the depositary and the global securities will be deposited with, or
on behalf of, DTC or its nominee, and registered securities will be registered
in the name of a nominee of DTC. Except under limited circumstances described
below, global securities will not be exchangeable for definitive certificated
debt securities.
Upon the issuance of a global security, DTC will credit on its book-entry
registration and transfer system the principal amounts of the individual debt
securities represented by such global security to the accounts of persons that
have accounts with DTC ("Participants"). Ownership of beneficial interests in a
global security will be limited to Participants or persons that may hold
interests through Participants. Ownership of beneficial interests in such
global security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by DTC (with respect to interests of
Participants) and records of Participants (with respect to interests of persons
who hold through Participants). The laws of some states require that certain
purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to own,
pledge or transfer beneficial interest in a global security.
So long as the depository is the registered owner of a global security, the
depository will be considered the sole owner or holder of the debt securities
represented by such global security for all purposes under the applicable
Indenture. Except as provided below, owners of beneficial interests in a global
security will not be entitled to have any of the individual debt securities
registered in their names, will not receive or be entitled to receive physical
delivery of any such debt securities in definitive form and will not be
considered the owners or holders thereof under the applicable Indenture.
Payments of principal of and any interest (and premium, if any) on
individual debt securities represented by a global security will be made to DTC
or its nominee, as the case may be, as the sole registered owner of such global
security and the sole holder of the debt securities represented by the global
security for all purposes under the applicable Indenture. Neither the Company
nor the Trustee, nor any agent of the Company or the Trustee, will have any
responsibility or liability for any aspect of DTC's records relating to or
payments made on account of beneficial ownership interests in the global
securities representing any debt securities or for maintaining, supervising or
reviewing any of DTC's records relating to those beneficial ownership
interests.
The Company has been advised by DTC that, upon receipt of any payment in
respect of a global security, DTC will immediately credit Participants'
accounts for their pro rata share of such payments. The Company also expects
that payments by Participants to owners of beneficial interests in global
securities held through such Participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
These payments will be the sole responsibility of the Participants.
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Global securities may not be transferred except as a whole by DTC to a
nominee of DTC. Global securities representing debt securities are exchangeable
for certificated debt securities only if:
. DTC or its nominee notifies the Company that it is unwilling or unable
to continue as depositary for these global securities;
. DTC ceases to be qualified as required by the applicable Indenture;
. the Company instructs the Trustee in accordance with the applicable
Indenture that those global securities will be so exchangeable; or
. there shall have occurred and be continuing an Event of Default or an
event which after notice or lapse of time would be an Event of Default
with respect to the debt securities represented by such global security.
Any global securities that are exchangeable as described above shall be
exchangeable for certificated debt securities issuable in denominations of
$1,000 (or $5,000 in the case of bearer debt securities) and integral multiples
of $1,000 (or $5,000 in the case of bearer debt securities) in excess thereof
and registered in such names as DTC shall direct. Subject to the foregoing,
global securities are not exchangeable, except for global securities of like
denomination to be registered in the name of DTC or its nominee. If debt
securities are subsequently issued in registered form, they would thereafter be
transferred or exchanged without any service charge at the corporate trust
office of the Trustee or at any other office or agency maintained by the
Company for such purpose.
So long as DTC or its nominee is the registered holder and owner of global
securities, DTC or its nominee, as the case may be, will be considered the sole
owner or holder of the debt securities represented by the global securities for
the purposes of receiving payment on the debt securities, receiving notices and
for all other purposes under the applicable Indenture and the debt securities.
Except as provided above, owners of beneficial interests in global securities
will not be entitled to receive physical delivery of debt securities in
definitive form and will not be considered the holders thereof for any purpose
under the applicable Indenture. Accordingly, each person owning a beneficial
interest in the global securities must rely on the procedures of DTC and, if
such person is not a Participant, on the procedures of the Participant through
which such person owns its interest, to exercise any rights of a holder under
the applicable Indenture. The Indentures provide that DTC may grant proxies and
otherwise authorize Participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a
holder is entitled to give or take under the applicable Indenture. The Company
understands that under existing industry practices in the event that the
Company requests any action of holders or that an owner of a beneficial
interest in global securities desires to give or take any action which a holder
is entitled to give or take under the applicable Indenture. DTC would authorize
the Participants holding the relevant beneficial interests to give or take such
action, and such Participants would authorize beneficial owners owning through
such Participants to give or take such action or would otherwise act upon the
instructions of beneficial owners through them.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds
securities that its Participants deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
Access to DTC's system is also available to others, such as securities brokers
and dealers, banks and trust companies that
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clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly. The rules applicable to DTC and its Participants
are on file with the SEC.
According to DTC, the foregoing information with respect to DTC has been
provided to the Industry for informational purposes only and is not intended to
serve as a representation, warranty or contract modification of any kind.
Payment and Paying Agents
Unless the applicable prospectus supplement provides otherwise, the place of
payment for all registered securities will be Chicago, Illinois, U.S.A., and
the Company will initially designate the corporate trust office of the
applicable Trustee for this purpose. At the option of the Company, interest, if
any, also may be paid on registered securities (i) by check mailed to the
address of the person entitled thereto as such person's address appears in the
security register or (ii) by wire transfer to an account located in the United
States maintained by the person entitled thereto as specified in the security
register. (Sections 307, 1001 and 1002 of each Indenture.) Unless the
applicable prospectus supplement provides otherwise, payment of any installment
of interest on registered securities will be made to the person in whose name
such registered security is registered at the close of business on the record
date for such interest. (Section 307 of each Indenture.)
If the Company issues bearer securities, it must maintain an office or
agency outside the United States at which the principal of (and premium, if
any) and interest, if any, on the bearer securities will be paid. (Section 1002
of each Indenture.) The initial locations of such offices and agencies will be
specified in the applicable prospectus supplement. Unless the applicable
prospectus supplement provides otherwise, payments made with respect to bearer
securities will be made, at the holder's option, by (i) check in the currency
designated in the bearer security presented or mailed to an address outside the
United States or (ii) paid by wire transfer to an account in such currency
maintained at a bank located outside the United States. Payments will not be
made in the United States. (Sections 307 and 1002 of each Indenture.)
Nevertheless, payments made with respect to bearer securities payable in U.S.
dollars will be made at the office of the Company's paying agent in Chicago,
Illinois if (but only if) payment outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions and
the Trustee has received an opinion of counsel that such payment within the
United States is legal. (Sections 307 and 1002 of each Indenture.) Unless the
applicable prospectus supplement provides otherwise, payment of installments of
interest on any bearer securities on or before maturity will be made only
against surrender of coupons for such interest installments as they mature.
(Section 1001 of each Indenture.)
Unless the applicable prospectus supplement provides otherwise, the Company
will make all payments of principal of (and premium, if any) and interest, if
any, on any debt security that is payable in a currency other than U.S. dollars
in U.S. dollars if such currency (i) ceases to be used both by the government
of the country that issued the currency and by a central bank or other public
institution of or within the international banking community for the settlement
of transactions, (ii) is the Euro and ceases to be used both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities or (iii) is any currency
unit (or composite currency) other than the Euro and ceases to be used for the
purposes for which it was established. (Section 312 of each Indenture.)
The Company may designate additional offices or agencies for payment with
respect to any debt securities, approve a change in the location of any such
office or agency and, except as provided above, rescind the designation of any
such office or agency.
All moneys deposited with a paying agent or held for the payment of
principal of (or premium, if any) or interest, if any, on any debt security
that remains unclaimed at the end of two years after such payment has become
due will, at request of the Company, be repaid to the Company, or discharged
from trust, and the holder of such debt security may thereafter look only to
the Company for payment thereof. (Section 1003 of each Indenture.)
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Subordinated Indenture Provisions
Subordinated Securities are subordinate and junior in right of payment, to
the extent set forth in the Subordinated Indenture, to the prior payment in
full of all existing and future Senior Debt of the Company. (Section 1601 of
the Subordinated Indenture.)
Senior Debt is defined in the Subordinated Indenture as the principal of
(and premium, if any) and interest on (including interest accruing after the
filing of a petition initiating any proceeding pursuant to any bankruptcy law)
and other amounts due on or in connection with any Debt incurred, assumed or
guaranteed by the Company, whether outstanding on the date of the Subordinated
Indenture or thereafter incurred, assumed or guaranteed, and all renewals,
extensions and refundings of any such Debt. Excluded from the definition of
Senior Debt are the following:
. any debt which expressly provides (i) that such debt is not senior in
right of payment to the Subordinated Securities, or (ii) that such debt
is subordinated to any other debt of the Company, unless such debt
expressly provides that such Debt is senior in right of payment to the
Subordinated Securities;
. debt of the Company in respect of the Subordinated Securities;
. debt of the Company in respect of its outstanding Liquid Yield
Option(TM) Notes due 2009 (the "2009 LYONs"(TM)) and its outstanding
Liquid Yield Option(TM) Notes due 2013 (the "2013 LYONs"(TM)), which
2009 LYONs and 2013 LYONs rank on a parity with the Subordinated
Securities;
. debt of the Company in respect of the extension notes which may be
issued in the future, at specified dates, in respect of the 2009 LYONs
and in payment of the purchase price thereof (which extension notes
would rank on a parity with the Subordinated Securities and any 2009
LYONs and 2013 LYONs remaining outstanding). (Section 101 of the
Subordinated Indenture.); and
. debt of the Company in respect of the 6.68% Deferrable Interest Junior
Subordinated Debentures due March 31, 2039 representing a long-term loan
made to the Company by Motorola Capital Trust I, a Delaware statutory
business trust and wholly-owned subsidiary of the Company (the "Trust"),
and obligations of the Company related to its guarantee of certain
obligations of the Trust under its 6.68% Trust Originated Preferred
SecuritiesSM.
There are no restrictions in the Subordinated Indenture on the creation of
additional Senior Debt (or any other indebtedness). (Section 101 of the
Subordinated Indenture.) The prospectus supplement with respect to any
Subordinated Securities will set forth (a) as of the most recent practicable
date (i) the aggregate amount of consolidated indebtedness outstanding that
would constitute either Senior Debt or indebtedness of subsidiaries of the
Company and (ii) the aggregate amount of outstanding indebtedness that would
rank on a parity with the Subordinated Securities and (b) any then-existing
limitation on the issuance of additional Senior Debt.
By reason of such subordination, in the event of dissolution, insolvency,
bankruptcy or other similar proceedings, upon any distribution of assets, (i)
the holders of all Senior Debt will first be entitled to receive payment in
full of all amounts due or to become due thereon, or payment of such amounts
shall have been provided for, before the holders of Subordinated Securities
would be entitled to receive any payment or distribution with respect to such
securities, (ii) the holders of Subordinated Securities will be required to pay
over their share of such distribution to the holders of Senior Debt until such
Senior Debt is paid in full and (iii) creditors of the Company who are not
holders of Subordinated Securities or holders of Senior Debt may recover less,
ratably, than holders of Senior Debt and may recover more, ratably, than the
holders of Subordinated Securities. (Section 16.02 of the Subordinated
Indenture.)
Unless the applicable prospectus supplement provides otherwise, in the event
that the Subordinated Securities are declared due and payable prior to their
Stated Maturity by reason of the occurrence of an Event
--------
(TM)Trademark of Merrill Lynch & Co.
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of Default, then the Company would be obligated to promptly notify holders of
Senior Debt of such acceleration. Unless the applicable prospectus supplement
provides otherwise, the Company may not pay the Subordinated Securities until
120 days have passed after such acceleration occurs and may thereafter pay the
Subordinated Securities if the terms of the Subordinated Indenture otherwise
permit payment at that time. (Section 16.03 of the Subordinated Indenture.)
Unless the applicable prospectus supplement provides otherwise, no payment
of the principal (and premium, if any) or interest, if any, with respect to any
of the Subordinated Securities may be made, except the Subordinated Securities
may be acquired for Common Stock or other Capital Stock or as otherwise set
forth in the Subordinated Indenture, if any default with respect to Senior Debt
occurs and is continuing that permits the acceleration of the maturity thereof
and such default is either the subject of judicial proceedings or the Company
receives notice of the default, unless (a) 120 days pass after notice of the
default is given and such default is not then the subject of judicial
proceedings or the default with respect to the Senior Debt is cured or waived
and (b) the terms of the Subordinated Indenture otherwise permit the payment or
acquisition of the Subordinated Securities at that time. (Section 16.04 of the
Subordinated Indenture.)
The Trustee
BNY Midwest Trust Company (as successor trustee to Harris Trust and Savings
Bank) is trustee under (i) an indenture with the Company dated as of March 15,
1985 relating to the Company's 8.40% Debentures due August 15, 2031, (ii) an
indenture with the Company dated as of October 1, 1991 relating to the
Company's 7.60% Notes due January 1, 2007 and the Company's 6 1/2% Notes due
March 1, 2008, (iii) the Senior Indenture relating to the Company's 5.80% Notes
due October 15, 2008, the Company's 7 1/2% Debentures due May 15, 2025, the
Company's 6 1/2% Debentures due September 1, 2025, the Company's 6 1/2%
Debentures due November 15, 2028 and the Company's 5.22% Debentures due October
1, 2097 and (iv) a subordinated indenture, preferred securities guarantee and
declaration of trust with the Company and/or the Trust, all of which are dated
as of February 3, 1999, relating to the Company's 6.68% Deferrable Interest
Junior Subordinated Debentures due March 31, 2039 and the Trust's 6.68% Trust
Originated Preferred SecuritiesSM.
DESCRIPTION OF CAPITAL STOCK
The following description of the Company's capital stock is subject to the
detailed provisions of the Company's restated certificate of incorporation, as
amended (the "Certificate of Incorporation"), and bylaws, as amended (the
"Bylaws"), and to the Rights Agreement (as defined below). This description
does not purport to be complete and is qualified in its entirety by reference
to the terms of the Certificate of Incorporation, the Bylaws and the Rights
Agreement, which are filed as exhibits to the registration statement. See
"Where You Can Find More Information."
Common and Preferred Stock
The authorized capital stock of the Company consists of 4,200,000,000 shares
of Common Stock, par value $3 per share, and 500,000 shares of Preferred Stock,
par value $100 per share, issuable in series ("Preferred Stock"). There are no
shares of Preferred Stock presently outstanding. The Board of Directors of the
Company is authorized to create and issue one or more series of Preferred Stock
and to determine the rights and preferences of each series, to the extent
permitted by the Certificate of Incorporation. The holders of shares of the
Company's Common Stock are entitled to one vote for each share held and each
share of the Company's Common Stock is entitled to participate equally in
dividends out of funds legally available therefor, as and when declared by the
Board of Directors, and in the distribution of assets in the event of
liquidation. The shares of the Company's Common Stock have no preemptive or
conversion rights, redemption provisions or sinking fund provisions. The
outstanding shares of the Company's Common Stock are duly and validly issued,
fully
--------
SM"Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
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paid and nonassessable, and any shares of Common Stock issued in an offering
pursuant to this prospectus and any shares of Common Stock issuable upon the
(i) exercise of Common Stock Warrants or (ii) conversion or exchange of debt
securities which are convertible into or exchangeable for Common Stock, will be
duly and validly issued, fully paid and nonassessable.
Preferred Stock Purchase Rights
On November 5, 1998, Motorola authorized a new rights agreement between the
Company and Harris Trust and Savings Bank, as Rights Agent (the "Rights
Agreement") to replace the existing rights agreement dated as of November 9,
1988, as amended, and the associated rights, which expired as of the close of
business on November 20, 1998. The following summary of certain provisions of
the Rights Agreement does not purport to be complete and is qualified in its
entirety by reference to all of the provisions of the Rights Agreement,
including particular provisions or defined terms of the Rights Agreement. See
"Where You Can Find More Information."
Under the Rights Agreement, each outstanding share of Common Stock of the
Company is accompanied by a preferred stock purchase right (a "Right"). Each
Right entitles the registered holder to purchase from the Company one thirty-
thousandth of a share (as adjusted to reflect the Company's 3-for-1 stock split
in the form of a 200% stock dividend paid on June 1, 2000) of Junior
Participating Preferred Stock, Series B, $100 par value per share, of the
Company (the "Preferred Shares") at a price of $66.66 per one thirty-thousandth
(or $200 per one ten-thousandth) of a Preferred Share (the "Preferred Share
Purchase Price"), subject to adjustment. The Rights attach to shares of Common
Stock outstanding as of the close of business on November 20, 1998 and to
shares of Common Stock which become outstanding thereafter prior to the
earliest of the Distribution Date (as defined below), the redemption of the
Rights, the exchange of the Rights and the expiration of the Rights (and, in
certain cases, following the Distribution Date).
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired. The Rights should
not interfere with any merger or other business combination approved by the
Board of Directors because of the ability of the Board of Directors to redeem
the Rights.
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") acquired, or obtained the right to acquire, beneficial ownership of
10% or more of the outstanding shares of Common Stock (a "Triggering Event")
and (ii) 10 days following the commencement or announcement of a tender offer
or exchange offer for 10% or more of such outstanding shares of Common Stock
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Stock certificates
outstanding as of November 20, 1998, by such Common Stock certificate. The
Rights Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the shares of Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after November 20, 1998, upon the transfer or
new issuance of shares of Common Stock (including, unless the applicable
prospectus supplement provides otherwise, the shares of Common Stock issued (i)
in an offering pursuant to this prospectus, (ii) upon exercise of any Common
Stock Warrants or (iii) upon conversion or exchange of debt securities which
are convertible into or exchangeable for Common Stock) will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights) the surrender for transfer
of any certificate for shares of Common Stock, outstanding as of November 20,
1998, with or without such notation or a copy of a summary of Rights being
attached thereto, will also constitute the transfer of the Rights associated
with the shares of Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
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The Rights are not exercisable until the Distribution Date. The Rights will
expire on November 20, 2008, unless earlier redeemed by the Company as
described below.
The Preferred Share Purchase Price payable, and the number of Preferred
Shares or other securities, cash or other property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution (i)
in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) upon the grant to holders of the
Common Stock of certain rights or warrants to subscribe for Common Stock or
convertible securities at less than the current market price of the Common
Stock, (iii) upon the distribution to holders of the Common Stock of evidences
of indebtedness or assets (excluding regular periodic cash dividends) and (iv)
in connection with any recapitalization of the Company.
In the event that a person becomes an Acquiring Person, each Right (other
than Rights that are or were beneficially owned by the Acquiring Person and
certain related persons and transferees, which will thereafter be void) shall
thereafter be exercisable not for Preferred Shares, but for a number of shares
of Common Stock (or, in certain cases, fractional Preferred Shares, other
Common Stock equivalents or cash) having a market value of two times the
exercise price of the Right. In the event that, at the time or after a person
becomes an Acquiring Person, the Company is involved in a merger or other
business combination in which (i) the Company is not the surviving corporation,
(ii) Common Stock is changed or exchanged or (iii) 50% or more of the Company's
consolidated assets or earning power are sold, then each Right (other than
Rights that are or were owned by the Acquiring Person and certain related
persons and transferees, which will thereafter be void) shall thereafter be
exercisable for a number of shares of common stock of the acquiring company
having a market value of two times the exercise price of the Right.
In addition, at any time after a Triggering Event and before a person has
acquired beneficial ownership of 50% or more of the outstanding Common Stock,
the Company may elect to exchange all or part of the Rights (excluding void
Rights held by an Acquiring Person and certain related persons and transferees)
at an exchange ratio of one share of Common Stock, or one thirty-thousandth
(subject to adjustment) of a Preferred Share (or other Common Stock
equivalent), per Right.
At any time prior to a Triggering Event, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price (the
"Rights Redemption Price") of $.0033 per Right (as adjusted to reflect the
Company's 3-for-1 stock split in the form of a 200% stock dividend paid on June
1, 2000). Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Rights
Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
At any time prior to a Triggering Event, the Company may amend or supplement
the Rights Agreement without the approval of the Rights Agent or any holder of
the Rights. Thereafter, no amendment may adversely affect the interests of the
Rights holders (other than an Acquiring Person).
The Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment equal to the greater of $250 per share and 30,000
times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment equal to the greater of $1,000 per share and
30,000 times the payment made per share of Common Stock. Each Preferred Share
will have 30,000 votes per share, voting together with the Common Stock. In the
event of any merger, consolidation or other transaction in which Common Stock
is exchanged, each Preferred Share will be entitled to receive 30,000 times the
amount received per share of Common Stock.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one thirty-thousandth interest in a Preferred
Share that may be purchased upon exercise of each Right should approximate the
value of one share of Common Stock.
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No fractional shares of Common Stock or Preferred Shares will be required to
be issued upon the exercise of a Right (other than fractions of Preferred
Shares that are integral multiples of one thirty-thousandth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Common Stock or Preferred Shares on the last trading day
prior to the date of exercise.
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DESCRIPTION OF SECURITIES WARRANTS
We may issue warrants for the purchase of debt securities or common stock,
either independently or together with debt securities. Each series of warrants
will be issued under a separate warrant agreement between the Company and a
bank or trust company, as agent. The warrant agent will act solely as an agent
of the Company and will not assume any obligation for any warrant holders.
Copies of the forms of warrant agreements and the forms of warrant certificates
are filed as exhibits to the registration statement. The following description
of certain provisions of the forms of warrant agreements and warrant
certificates does not purport to be complete and is qualified in its entirety
by reference to all the provisions of the warrant agreements and the warrant
certificates.
General
If we offer warrants for the purchase of debt securities, the applicable
prospectus supplement will describe their terms, which may include the
following:
. the title and aggregate number of such warrants;
. the title, rank, aggregate principal amount, denomination, and terms of
the underlying debt securities;
. the currency of the underlying debt securities or of payment of the
exercise price;
. whether the warrants are issued as a unit with a debt security, and if
so, the number of warrants attached to each such debt security;
. the date, if any, on and after which such warrants and any related
securities will be transferable separately;
. the principal amount of the debt securities purchasable upon exercise of
each warrant and the price, or the manner of determining the price, at
which such debt securities may be purchased upon exercise;
. when such warrants may be exercised and the expiration date;
. whether the warrant certificates will be issued in registered or bearer
form;
. United States federal income tax consequences;
. the terms of any right of the Company to redeem or accelerate the
exercisability of such warrants;
. whether such warrants are to be issued with any other securities;
. the offering price; and
. any other terms of such warrants.
If we offer warrants for the purchase of Common Stock, the applicable
prospectus supplement will describe their terms, which may include the
following:
. the title and aggregate number of such warrants and whether such
warrants will be sold with other securities;
. the number of shares of Common Stock that may be purchased on exercise
of each warrant;
. the price or manner of determining the price, the manner in which the
exercise price may be paid and any minimum number of warrants
exercisable at one time;
. the terms of any right of the Company to redeem such warrants;
. the date, if any, on and after which such warrants and any related
series of debt securities will be transferable separately;
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. when such warrants may be exercisable and the expiration date;
. the terms of any right of the Company to accelerate the exercisability
of the warrants;
. United States federal income tax consequences; and
. any other terms of such warrants.
Warrants for the purchase of Common Stock will be offered and exercisable
for U.S. dollars only.
Warrants may be exchanged for new warrants of different denominations, may
(if in registered form) be presented for registration of transfer and may be
exercised at the corporate trust office of the warrant agent or any other
office indicated in the applicable prospectus supplement. No service charge
will be made for any permitted transfer or exchange of warrant certificates,
but holders must pay any tax or other applicable governmental charge. Prior to
the exercise of any warrant to purchase underlying debt securities, holders of
such warrants will not have any of the rights of holders of the debt securities
purchasable upon such exercise, including the right to receive payments of
principal of (or premium, if any) or interest, if any, on the debt securities
purchasable upon such exercise or to enforce covenants in the applicable
indenture. Prior to the exercise of any warrants to purchase Common Stock,
holders of such warrants will not have any rights of holders of the Common
Stock purchasable upon such exercise, including the right to receive payments
of dividends, if any, on the Common Stock purchasable upon such exercise or to
exercise any applicable right to vote.
Exercise of Warrants
Each warrant will entitle the holder to purchase underlying debt securities
or Common Stock, as the case may be, at the exercise price described in, or
calculable from, the applicable prospectus supplement. Unexercised warrants
will become void after the close of business on the expiration date.
Holders can exercise warrants by delivering the exercise price and certain
required information to the warrant agent. Warrants will be deemed to have been
exercised upon receipt of payment of the exercise price, subject to the
receipt, within five business days, of the warrant certificate. Upon receipt of
such payment and such warrant certificate properly completed and duly executed
at the corporate trust office of the warrant agent or any other office
indicated in the applicable prospectus supplement, the Company will, as soon as
practicable, issue and deliver the underlying debt securities or Common Stock,
as the case may be, purchasable upon such exercise. If fewer than all of the
warrants represented by a warrant certificate are exercised, the Company will
issue a new warrant certificate for the remaining warrants. The holder of a
warrant must pay any tax or other governmental charge imposed in connection
with the issuance of underlying debt securities or Common Stock purchased upon
exercise of a warrant.
Modifications
The warrant agreements and the terms of the warrants may be modified or
amended by the Company and the warrant agent, without the consent of any
holder, for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective or inconsistent provision contained therein, or in
any other manner that the Company deems necessary or desirable and that will
not materially adversely affect the interests of the holders of the warrants.
The Company and the warrant agent may also modify or amend the warrant
agreement and the terms of the warrants with the consent of a majority of the
holders of the then outstanding unexercised warrants affected thereby; provided
that no such modification or amendment that accelerates the expiration date,
increases the exercise price, reduces the number of outstanding warrants
required for consent of any such modification or amendment, or otherwise
materially adversely affects the rights of the holders of the warrants, may be
made without the consent of each holder affected thereby.
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Common Stock Warrant Adjustments
The terms and conditions on which the exercise price of and/or the number of
shares of Common Stock covered by a warrant are subject to adjustment will be
set forth in the warrant certificate and the applicable prospectus supplement.
Such terms will include provisions for adjusting the exercise price and/or the
number of shares of Common Stock covered by such warrant; the events requiring
such adjustment; the events upon which the Company may, in lieu of making such
adjustment, make proper provisions so that the holder of such warrant, upon
exercise thereof, would be treated as if such holder had exercised such warrant
prior to the occurrence of such events; and provisions affecting exercise in
the event of certain events affecting the Common Stock.
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PLAN OF DISTRIBUTION
We may sell the securities offered pursuant to this prospectus through
agents, through underwriters or dealers or directly to one or more purchasers.
Underwriters, dealers and agents that participate in the distribution of the
securities offered pursuant to this prospectus may be underwriters as defined
in the Securities Act of 1933 and any discounts or commissions received by them
from us and any profit on the resale of the offered securities by them may be
treated as underwriting discounts and commissions under the Securities Act. Any
underwriters or agents will be identified and their compensation (including
underwriting discount) will be described in the applicable prospectus
supplement. The prospectus supplement will also describe other terms of the
offering, including any discounts or concessions allowed or reallowed or paid
to dealers and any securities exchanges on which the offered securities may be
listed.
The distribution of the securities offered under this prospectus may occur
from time to time in one or more transactions at a fixed price or prices, which
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
If the applicable prospectus supplement indicates, we will authorize dealers
or our agents to solicit offers by certain institutions to purchase offered
securities from us pursuant to contracts that provide for payment and delivery
on a future date. We must approve all institutions, but they may include, among
others:
. commercial and savings banks;
. insurance companies;
. pension funds;
. investment companies; and
. educational and charitable institutions.
The institutional purchaser's obligations under the contract are only
subject to the condition that the purchase of the offered securities at the
time of delivery is allowed by the laws that govern the purchaser. The dealers
and our agents will not be responsible for the validity or performance of the
contracts.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make as a result of those
certain civil liabilities.
When we issue the securities offered by this prospectus (except for shares
of Common Stock), they may be new securities without an established trading
market. If we sell a security offered by this prospectus to an underwriter for
public offering and sale, the underwriter may make a market for that security,
but the underwriter will not be obligated to do so and could discontinue any
market making without notice at any time. Therefore, we cannot give any
assurances to you concerning the liquidity of any security offered by this
prospectus.
Underwriters and agents and their affiliates may be customers of, engage in
transactions with, or perform services for us or our subsidiaries in the
ordinary course of their and/or our businesses.
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LEGAL MATTERS
Certain legal matters will be passed upon for us by Jeffrey A. Brown of our
Law Department and Winston & Strawn, Chicago, Illinois. As of November 1, 2000,
Mr. Brown owned approximately 844 shares of common stock and held options to
purchase 11,400 shares of common stock, of which options to purchase 3,100
shares were currently exercisable.
EXPERTS
The consolidated financial statements and schedule of Motorola and
subsidiaries as of December 31, 1999 and 1998 and for each of the years in the
three-year period ended December 31, 1999 have been incorporated by reference
herein and in the registration statement in reliance upon the reports of KPMG
LLP, independent certified public accountants, incorporated by reference herein
and in the registration statement, and upon the authority of said firm as
experts in auditing and accounting.
The financial statements and the related financial statement schedules
incorporated herein by reference from the General Instrument Corporation Annual
Report on Form 10-K for the year ended December 31, 1998 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which
is incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
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$1,000,000,000
[MOTOROLA LOGO]
% Notes due November , 2010
-------------------------------
PROSPECTUS SUPPLEMENT
-------------------------------
Merrill Lynch & Co.
Chase Securities Inc.
Goldman, Sachs & Co.
Banc of America Securities LLC
Deutsche Banc Alex. Brown
Morgan Stanley Dean Witter
Salomon Smith Barney
UBS Warburg LLC
November , 2000
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