MOTOROLA INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
----------------------
FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1999

OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission File number 1-7221

MOTOROLA, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 36-1115800
(State of Incorporation) (I.R.S. Employer Identification No.)

1303 East Algonquin Road, Schaumburg, Illinois 60196
(Address of principal executive offices)

(847) 576-5000
(Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Name of Each Exchange
Title of Each Class on Which Registered
------------------- -----------------------
Common Stock, $3 Par Value per Share New York Stock Exchange
Chicago Stock Exchange
Rights to Purchase Junior Participating New York Stock Exchange
Preferred Stock, Series B Chicago Stock Exchange
Liquid Yield Option Notes due 2009 New York Stock Exchange
Liquid Yield Option Notes due 2013 New York Stock Exchange
6.68% Trust Originated Preferred Securities New York Stock Exchange
(issued by Motorola Capital Trust I and guaranteed
by Motorola, Inc.)

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ___
---

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]

The aggregate market value of voting and non-voting common equity held by
non-affiliates of the registrant as of January 31, 2000 was approximately $94.9
billion (based on closing sale price of $136.00 per share as reported for the
New York Stock Exchange-Composite Transactions).

The number of shares of the registrant's Common Stock, $3 par value per
share, outstanding as of January 31, 2000 was 714,636,270.

DOCUMENTS INCORPORATED BY REFERENCE

Document Location in Form 10-K
-------- ---------------------

Portions of Registrant's Proxy Statement for 2000 Annual Meeting of Stockholders Including Parts I, II, III and IV
Management's Discussion and Analysis and Consolidated Financial Statements

Table of Contents

Page
----

PART I.......................................................................................... 1
Item 1. Business............................................................................... 1
General....................................................................................... 1
Business Segments............................................................................. 1
Personal Communications Segment........................................................ 1
Network Systems Segment................................................................ 2
Commercial, Government and Industrial Systems Segment.................................. 4
Semiconductor Products Segment......................................................... 5
Other Products Segment................................................................. 6
Integrated Electronic Systems Sector................................................. 6
Internet and Networking Group........................................................ 7
Other Businesses..................................................................... 8
Merger with General Instrument Corporation............................................. 8
Financial Information About Segments.......................................................... 8
Customers..................................................................................... 8
Backlog....................................................................................... 9
Research and Development...................................................................... 9
Patents and Trademarks........................................................................ 9
Environmental Quality......................................................................... 10
Miscellaneous................................................................................. 10
Business Risk Factors......................................................................... 10
Financial Information About Foreign and Domestic Operations and Export Sales.................. 12
Item 2. Properties............................................................................. 13
Item 3. Legal Proceedings...................................................................... 13
Item 4. Submission of Matters to a Vote of Security Holders.................................... 15
Executive Officers of the Registrant............................................................ 15
PART II......................................................................................... 17
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.................. 17
Item 6. Selected Financial Data................................................................ 17
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.. 17
Item 8. Financial Statements and Supplementary Data............................................ 17
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure... 17
PART III........................................................................................ 17
Item 10. Directors and Executive Officers of the Registrant.................................... 17
Item 11. Executive Compensation................................................................ 17
Item 12. Security Ownership of Certain Beneficial Owners and Management........................ 18
Item 13. Certain Relationships and Related Transactions........................................ 18
PART IV......................................................................................... 18
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K....................... 18
14(a)(1) Financial Statements................................................................ 18
14(a)(2) Financial Statement Schedule and Auditors' Report................................... 18
14(a)(3) Exhibits............................................................................ 18

i

PART I

Throughout this 10-K report we "incorporate by reference" certain
information in parts of other documents filed with the Securities and Exchange
Commission (the "SEC"). The SEC allows us to disclose important information by
referring to it in that manner. Please refer to such information.

"Motorola" (which may be referred to as "we", "us" or "our") means
Motorola, Inc. or Motorola, Inc. and its subsidiaries, as the context requires.
"Motorola" is a registered trademark of Motorola, Inc.

Item 1: Business

General

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).

Business Segments

Personal Communications Segment

The Personal Communications Sector ("PCS" or the "segment") primarily
designs, manufactures, sells and services wireless subscriber equipment
including wireless telephones, iDEN(R) digital phones, and satellite radio-
telephones, paging and advanced messaging devices and personal 2-way radios,
with related software and accessory products. Products are marketed worldwide
through carriers, distributors, dealers, retailers, and, in certain markets,
through licensees.

Radio frequencies are required to provide wireless services. The allocation
of frequencies is regulated in the United States and other countries throughout
the world and limited spectrum space is allocated to wireless services. The
growth of the wireless and personal communications industry may be affected if
adequate frequencies are not allocated or, alternatively, if new technologies
are not developed to better utilize the frequencies currently allocated for such
use. Such occurrences might have an effect on the segment's results.

Generally, PCS carries reasonable product inventories in distribution
centers to meet customer delivery requirements. However, during 1999, worldwide
demand and production of wireless phones were greater than manufacturers and
component suppliers had anticipated at the beginning of 1999. As a result, there
were shortages of certain types of components used in manufacturing wireless
phones, including those used by Motorola. While component shortages are expected
to continue in the first and second quarters of 2000, the availability of
components continues to improve sequentially.

Generally, PCS does not permit customers to return merchandise and does not
grant extended payment terms, although exceptions may be made, primarily in the
retail segments of the segment's business, if necessary to meet unique market
conditions.

1

During 1999, in the Americas region, PCS and the wireless telephone market
experienced a continued acceleration in the technology shift to digital phones
and products from analog products. Asia and Europe had already substantially
completed the transition to digital. PCS introduced a variety of new digital
wireless products during 1999, with digital representing over 80% of unit
shipments in 1999.

The segment experiences intense competition in worldwide markets from numerous
global competitors including some of the world's largest companies. In
particular, the segment has experienced significant competition in the market
for digital wireless products. Competitive factors in the market for the
segment's products include: technology offered; price; product performance,
features, quality, delivery and warranty; the quality and availability of
service; company image; relationship with key customers and time-to-market.

The segment's backlog amounted to $2.8 billion at December 31, 1999 and $1.3
billion at December 31, 1998. The 1999 order backlog is believed to be
generally firm and 100% of that amount is expected to be shipped in 2000. The
forward-looking estimates of the firmness of such orders is subject to future
events which may cause the percentage of the 1999 backlog actually shipped to
change.

Materials used in the segment's operations are generally second-sourced to
ensure a continuity of supply. Occasionally, shortages or extended delivery
periods have occurred in various component parts, such as those discussed above,
the effects of which have generally been industry-wide and short in duration.
Energy necessary for the segment's manufacturing facilities consists of
electricity, natural gas and gasoline, all of which are currently in generally
adequate supply. The segment's facilities are highly automated and, therefore,
require a reliable source of electrical power. Labor is generally available in
reasonable proximity to the segment's manufacturing facilities. Difficulties in
obtaining any of the aforementioned items could affect the segment's results.

Patent protection is extremely important to the segment's operations. The
segment has an extensive portfolio of patents relating to its products,
technologies and manufacturing processes. Motorola is also licensed to use
certain patents owned by others. The protection of these licenses is also
important to the segment's operations. Reference is made to the material under
the heading "General" for information relating to patents and trademarks,
research and development activities and the seasonality and volatility of
business with respect to this segment.

PCS's headquarters are located in Libertyville, Illinois. Its major
facilities are located in Libertyville and Harvard, Illinois; Boynton Beach and
Plantation, Florida; Easter Inch, Scotland; Dublin, Ireland; Flensburg, Germany;
Tianjin, China; Penang, Malaysia; Singapore; Chihuahua, Mexico, and Jaguariuna,
Brazil. PCS also has interests in two Korean cellular handset design and
manufacturing firms, cellular joint ventures in Hangzhou and Shanghai, China,
and a manufacturing licensee in China. PCS also uses several original equipment
manufacturing ("OEM") contractors to support its worldwide manufacturing needs.
Additional engineering, software development and administration offices are
located in San Diego, California; Piscataway, New Jersey; Ft. Worth, Texas;
Tokyo, Japan; Beijing, China, and Korea.

Network Systems Segment

The Network Systems Segment ("NSS" or the "segment") primarily designs,
manufactures, sells, installs and services wireless cellular and personal
communication infrastructure equipment. Also included in this segment is the
satellite communications business, which markets, designs, builds, and operates
and maintains space-based telecommunications systems.

NSS wireless infrastructure products include electronic exchanges (i.e.,
telephone switches), base site controllers and radio base stations for Code
Division Multiple Access (CDMA), Personal Digital Cellular (PDC), Global System
for Mobile Communications (GSM), iDEN(R) integrated digital enhanced network,
wireless local loop, broadband fixed wireless, and analog technologies.
Products are marketed worldwide through a direct sales force, licensees or
agents.

The satellite communication business built and is operating and maintaining
the Iridium(R) satellite communication system. Iridium is the first low-earth
orbit, worldwide satellite-based communications network in existence for general
public use. Since August 1999, Iridium LLC (Iridium LLC and its operating
subsidiaries are

2

collectively referred to as "Iridium") has been operating as debtors-in-
possession under the regulations of Chapter 11 of the U.S. Bankruptcy Code. For
a more detailed discussion of Motorola's relationship with Iridium, see Note 8,
"Commitments and Contingencies: Iridium" and Note 15, "Subsequent Events," of
the Notes to Consolidated Financial Statements in the appendix to Motorola's
Proxy Statement for the 2000 annual meeting of stockholders.

Radio frequencies are required to provide wireless services. The allocation
of frequencies is regulated in the United States and other countries throughout
the world, and limited spectrum space is allocated to wireless services. The
growth of the wireless and personal communications industry may be affected if
adequate frequencies are not allocated or, alternatively, if new technologies
are not developed to better utilize the frequencies currently allocated for such
use. Such occurrences might have an effect on the segment's results.

The nature of NSS's business is larger long-term contracts with major
operators. Therefore, the individual loss of any large customer could have a
material adverse affect on the segment's business.

For NSS, payment terms are particular to individual contracts, some of which
provide for the holdback of certain residual amounts due to Motorola until
system acceptance by the customer. In certain circumstances, NSS permits
customer returns in accordance with specific contract terms. Increasingly,
network operators are requiring suppliers, like NSS, to provide or arrange for
long-term financing in connection with equipment purchases. Financing may cover
all or a portion of the purchase price, as well as working capital and can be
sizable. NSS may also assist customers in obtaining financing from banks or
other sources. NSS expects that the need to provide this financing or arrange
financing for its customers will continue, and may become increasingly important
in this segment.

The segment experiences intense competition in worldwide markets from numerous
competitors ranging in size from some of the world's largest companies to small,
specialized firms. In particular, the segment has experienced significant
competition in the market for digital products. Competitive factors in the
market for the segment's products include: technology offered; price;
availability of vendor financing; product and system performance, features,
quality, delivery, availability and warranty; the quality and availability of
service; company image; relationship with key customers and time-to-market. In
the satellite communications business, the competitive factors are first-to-
market, available geographic coverage, price, quality and reliability.

The segment's backlog amounted to $2.2 billion at both December 31, 1999 and
December 31, 1998. No backlog relating to the Iridium program exists at
December 31, 1999 as a result of the Iridium bankruptcy proceedings described
above. If backlog relating to the Iridium program were removed from backlog at
December 31, 1998, that number would decrease from $2.2 billion to $1.5 billion.
The 1999 order backlog is believed to be generally firm and 100% of that amount
is expected to be shipped in 2000. The forward-looking estimates of the
firmness of such orders is subject to future events which may cause the
percentage of the 1999 backlog actually shipped to change.

Materials used in the segment's operations are generally second-sourced to
ensure a continuity of supply. Occasional shortages in purchased components do
occur. Energy necessary for the segment's manufacturing facilities consists of
electricity, natural gas and gasoline, all of which are currently in generally
adequate supply. The segment's facilities are highly automated and, therefore,
require a reliable source of electrical power. Labor is generally available in
reasonable proximity to the segment's manufacturing facilities. Difficulties in
obtaining any of the aforementioned items could affect the segment's results.

Patent protection is extremely important to the segment's operations. The
segment has an extensive portfolio of patents relating to its products, systems,
technologies and manufacturing processes. Motorola is also licensed to use
certain patents owned by others. The protection of these licenses is also
important to the segment's operations. Reference is made to the material under
the heading "General" for information relating to patents and trademarks,
research and development activities and the seasonality and volatility of
business with respect to this segment.

NSS's headquarters are located in Arlington Heights, Illinois. Major design
centers include Arlington Heights and Schaumburg, Illinois; Chandler, Arizona;
Fort Worth, Texas; Cork, Ireland; Vancouver, British Columbia, and Swindon,
England. NSS operates manufacturing facilities in Schaumburg, Illinois; Fort
Worth, Texas; Plantation, Florida; Jaguariuna, Brazil; Hangzhou and Tianjin,
China, and Swindon, England.

3

Commercial, Government and Industrial Systems Segment

The Commercial, Government and Industrial Solutions Sector ("CGISS" or the
"segment") provides integrated information and communications solutions for
commercial, government and industrial customers worldwide. Its Radio Solutions
business primarily designs, manufactures, sells, installs and services analog
and digital two-way radio voice and data communications products and systems to
a wide range of public safety, government, utility, transportation and other
worldwide markets. The Systems Solutions business develops advanced integration
technologies and markets and delivers comprehensive solutions to government,
defense, space and large-enterprise customers through the application of
converged information and communications technologies. The business also
provides platforms for smart card products using radio frequency identification
(RFID). CGISS also provides network services for two-way radio subscribers in
international markets through joint ventures.

The principal customers for two-way radio products and systems include public
safety agencies, such as police, fire, highway maintenance departments and
forestry services; petroleum companies; gas, electric and water utilities;
telephone companies; diverse industrial companies; mining companies;
transportation companies such as railroads, airlines, taxicab operations and
trucking firms; institutions, such as schools and hospitals; and companies in
the construction, vending machine and service businesses. These products are
also sold and leased to various federal agencies for many uses. The principal
customers for systems solutions include various departments within the U.S. and
other governments, the National Aeronautics and Space Administration, municipal
agencies and large commercial enterprises. There are a few customers that,
collectively, the loss of, or a significant reduction in purchases by, could
have a material adverse effect on CGISS's results.

Users of two-way radios are regulated by a variety of governmental and other
regulatory agencies throughout the world. In the United States, users of two-
way radios are licensed by the Federal Communication Commission ("FCC"), which
has broad authority to make rules and regulations and prescribe restrictions and
conditions to carry out the provisions of the Communications Act of 1934. The
FCC's authority includes, among other things, the power to classify radio
stations, prescribe the nature of the service to be rendered by each class of
station, assign frequencies to the various classes of stations and regulate the
kinds of equipment which may be used. Regulatory agencies in other countries
have similar types of authority. Consequently, the business and results of this
segment could be affected by the rules and regulations adopted by the FCC or
regulatory agencies in other countries from time to time. Motorola has
developed products using trunking and data communications technologies to
enhance spectral efficiencies. The growth and results of the two-way radio
communications industry may be affected, however, by the regulations of the FCC
or other regulatory agencies relating to the allocation of frequencies for land
mobile communications users, especially in urban areas where such frequencies
are heavily used.

The products manufactured and marketed by CGISS are sold directly through its
own distribution force or through independent authorized distributors and
dealers, commercial mobile radio service operators and independent commission
sales representatives. The direct distribution force also provides system
engineering and installation and other technical and systems management services
to meet the customer's particular needs. The customer may choose to install and
maintain the equipment with its own employees, or may obtain installation,
service and parts from a network of Motorola authorized service stations (most
of whom are also authorized dealers) or from other non-Motorola service
stations. Subscriber units are sold directly and through indirect distribution
channels.

Leasing and conditional sale arrangements are also made available to
customers. The majority of the leases and conditional sale contracts entered
into by CGISS are sold to several unaffiliated finance companies or banks on
terms, which, in most instances, provide recourse to Motorola with certain
limitations. In addition, a significant number of leases and conditional sale
contracts are sold to a Motorola finance subsidiary. In certain circumstances,
CGISS permits customers to return products in accordance with industry
practices. CGISS's business includes providing custom products based on
assembling basic units into a large variety of models or combinations. This
requires the stocking of inventories and large varieties of piece parts and
replacement parts, as well as a variety of basic level assemblies in order to
meet short delivery requirements.

This segment experiences widespread, intense competition from numerous
competitors ranging from some of the world's largest, diversified companies to
foreign state-owned telecommunications companies to many small, specialized
firms. In addition, CGISS faces competition from numerous companies whose
principal manufacturing

4

operations are located outside the United States, which may serve to reduce
their manufacturing costs and enhance their brand recognition in their locale.
Competitive factors for CGISS include: price; technology offered; product
performance, quality, delivery and availability; and the quality and
availability of service and systems engineering, with no one factor being
dominant. An additional factor is the availability of vendor financing, as
infrastructure customers continue to look to equipment vendors as an additional
source of financing.

This segment's backlog amounted to $2.0 billion at December 31, 1999 and $1.4
billion at December 31, 1998. The 1999 backlog amount is believed to be
generally firm, and approximately 76% of that amount is expected to be shipped
during 2000. This forward-looking estimate of the firmness of such orders is
subject to future events, which may cause the percentage of the 1999 backlog
actually shipped to change.

Availability of the materials and components required by CGISS is relatively
dependable and certain, but normal fluctuations in market demand and supply
could cause temporary, selective shortages and affect results. Direct sourcing
of materials and components from foreign suppliers is becoming more extensive.
CGISS operates certain offshore subassembly plants, the loss of one or more of
which could constrain its production capabilities and affect results. Natural
gas, electricity and, to a lesser extent, oil are the primary sources of energy.
Current supplies of these forms of energy are generally considered to be
adequate for this segment's U.S. and foreign operations. However, difficulties
in obtaining any of the aforementioned items could affect the segment's results.

Patent protection is very important to the segment's business. Reference is
made to the material under the heading "General" for information relating to
patents and trademarks, research and development activities and volatility with
respect to this segment.

This segment's headquarters are located in Schaumburg, Illinois, with major
manufacturing/assembly facilities in Schaumburg, Illinois; Plantation, Florida;
Mount Pleasant, Iowa; Scottsdale, Arizona; Arad, Israel; Penang, Malaysia;
Berlin, Germany, and Tianjin, China.

Semiconductor Products Segment

The Semiconductor Products Sector ("SPS" or the "segment") designs, produces
and sells integrated semiconductor and software solutions for customers serving
the networking and computing, transportation and wireless communication markets
and for consumer applications in imaging and entertainment.

Semiconductors control and amplify electrical signals and are used in a broad
range of electronic products, including consumer electronic products, computers,
communications equipment, solid-state ignition systems and other automotive
electronic products, major home appliances, industrial controls, robotics,
aircraft, space vehicles, calculators and automatic controls.

SPS sells its products worldwide to original equipment manufacturers ("OEMs")
and a network of industrial distributors through its own sales force, agents and
distributors. Products manufactured by SPS are also supplied to other operating
units of Motorola. Other businesses of Motorola collectively constitute the
segment's largest customer and the volume of purchases by these businesses has
affected, and could continue to affect, SPS's results.

Customers are allowed to return merchandise for the longer of (i) the product
warranty period of the distributor or (ii) three years. The segment and its
results are affected by the cyclical nature of the semiconductor industry.
Available capacity, cyclical customer demands, new product introductions and
aggressive pricing has and could continue to impact its business and results.

The segment's capacity for certain products is being increased to meet current
market demand. In addition, the segment supplements its internal manufacturing
capacity with joint venture manufacturing facilities and purchases of products
from outside vendors. SPS has announced a goal to increase the use of foundry
manufacturing for older and specialized technologies. By year-end 1999, SPS had
outsourced 25% of its sales for 1999.

The semiconductor industry is subject to rapid changes in technology, and
requires a high level of capital spending and an extensive research, development
and design program to maintain state-of-the-art technology. Accordingly, SPS
maintains an extensive research and development program in advanced
semiconductor technology

5

and a significant portion of Motorola's capital expenditures have historically
been, and are expected to continue to be, for semiconductor facilities.

SPS experiences intense competition from numerous competitors ranging from
large companies offering a full range of products to small companies
specializing in certain segments of the market. The competitive environment
also is changing as a result of increased alliances between competitors. The
segment competes in many semiconductor markets, including the
telecommunications, personal computer/work station, industrial, transportation,
consumer, computer, and distributor markets. Important factors in competition
include: price; technology offered; product features, quality, availability and
warranty; the quality and availability of service; time-to-market and company
image. The ability to develop new products to meet customer requirements and to
meet customer delivery schedules are also competitive factors.

The segment's backlog amounted to $1.7 billion at both December 31, 1999 and
December 31, 1998. Backlog as of December 31, 1999 excluded the Semiconductor
Components Group business, which was sold in the third quarter of 1999. Orders
may be and are placed by customers for delivery up to 12 months in the future
but for purposes of calculating backlog only the next 13 weeks requirements are
reported. In the semiconductor industry, backlog quantities and shipment
schedules under outstanding purchase orders are frequently revised to reflect
changes in customer needs. Binding agreements calling for the sale of specific
quantities at specific prices are, typically, contractually subject to price or
quantity revisions and are, as a matter of industry practice, rarely formally
enforced. Therefore, the segment believes that most of its order backlog is
cancelable. For these reasons, the amount of backlog as of any particular date
may not be an accurate indicator of future results.

The segment is not currently experiencing any shortages in obtaining raw
materials. A significant portion of certain materials and parts used by SPS is
supplied from a single country. With respect to these and other materials, the
segment is constantly evaluating additional sources of supply to minimize the
risk of obtaining materials from only a few sources. Electricity, oil and
natural gas are used extensively in the segment's operations. All of these
energy sources are available in adequate quantities for current needs.
Electricity and oil are the primary energy sources for the segment's foreign
operations, and presently, there are no shortages of these sources although the
reliability of electrical power has been a problem from time to time at certain
facilities outside of the U.S. Difficulties in obtaining any of the
aforementioned items could affect SPS's results.

Patent protection is very important to SPS's operations. In addition, Motorola
is licensed to use certain patents owned by others. The protection of these
licenses is also important to SPS's operations. Reference is made to the
material under the heading "General" for information relating to patents and
trademarks, research and development activities and seasonality of business with
respect to this industry segment.

The Semiconductor Products segment's headquarters are in Austin, Texas. Its
major facilities are located in Austin, Texas; Chandler, Mesa and Tempe,
Arizona; Tianjin, China; Toulouse, France; Munich, Germany; Kwai Chung and Tai
Po, Hong Kong; Sendai and Tokyo, Japan; Tel Aviv, Israel; Kuala Lumpur,
Malaysia; Singapore, and East Kilbride and South Queensferry, Scotland. In
connection with the sale of its Semiconductor Component Group, the segment sold
manufacturing facilities located in Phoenix, Arizona; Aizu, Japan; Seremban,
Malaysia; Guadalajara, Mexico, and Carmona, the Philippines. The segment also
sold major facilities in Chung-Li, Taiwan and Paju, South Korea during 1999.
SPS is consolidating its production network into fewer integrated "anchor" sites
for economies of scale and improved efficiency.

Other Products Segment

Integrated Electronic Systems Sector

The Integrated Electronic Systems Sector ("IESS" or the "sector") designs,
manufactures and sells automotive and industrial electronics systems and
solutions, portable energy storage products and systems, multi-function embedded
board and computer system products, and telematics products and solutions.

The Automotive and Industrial Electronics Group ("AIEG") uses its high-quality
application and engineering expertise to design and sell custom electronic
solutions for original equipment manufacturers ("OEMs") including foreign and
domestic automobile manufacturers, heavy vehicle manufacturers, farm equipment
manufacturers and industrial customers.

6

The Energy Systems Group ("ESG") delivers complete portable energy system
solutions for many of today's leading brand-name mobile phones, notebooks, palm
computers, and other portable electronic products. A significant portion of ESG
sales is to other industry segments within Motorola, primarily the cellular
telephone business.

The Motorola Computer Group ("MCG") specializes in embedded computing
technology that is integrated by OEMs into a wide variety of products including
the following applications: products and solutions utilized in
telecommunications infrastructures; CAT scanners and MRI medical systems; flight
simulators; and semiconductor manufacturing equipment.

The Telematics Communications Group ("TCG") provides automotive customers with
integrated cellular phones as well as a variety of wireless Internet systems
including navigation and driver safety, and hands-free Internet access.

A significant part of the sector's business is dependent upon the business of
the other Motorola industry segments, collectively, and two external customers.
Each of these key customers is served by more than one group within the sector,
and with multiple product offerings within the groups. The loss of a
significant portion of these customers' business could have a material adverse
effect upon the sector. The sale of Motorola's Ceramic and Quartz Component
Division was completed in the first quarter of 1999 and definitive agreements
were signed in the fourth quarter to sell the Motorola Lighting Inc. division.
That sale closed in the first quarter of 2000.

Demand for the products of AIEG and TCG is linked to automobile sales in the
United States and other countries. Demand for ESG products is substantially
linked to the sales of other industry segments within Motorola. Demand for MCG
products is linked to manufacturing systems, imaging, and telecommunications in
the United States and other countries. The sector experiences competition from
numerous global competitors, including the automobile manufacturers' internal or
affiliated electronic control suppliers. Competitive factors in the sale of
IESS products include: price; product quality, performance and delivery; supply
integrity; quality reputation; responsiveness; and design and manufacturing
technology. An additional factor for MCG products is the availability of
software. In certain circumstances, IESS permits customers to return products
in accordance with industry practices.

The sector's backlog amounted to $356 million at December 31, 1999 and $315
million at December 31, 1998. The 1999 backlog for the sector is believed to be
generally firm, and approximately 100% of that amount is expected to be shipped
during 2000. This forward looking estimate of the firmness of such orders is
subject to future events that may cause the percentage of the 1999 backlog
actually shipped to change.

All materials used by IESS in its operations have good availability at this
time. The sector uses electricity and gas in its operations, which are
currently adequate in supply. However, difficulties in obtaining any of the
aforementioned items could affect the results for IESS.

Patent protection is important to the sector's business. Reference is made to
the material under the heading "General" for information relating to patents and
trademarks and research and development activities with respect to this sector.

The sector's headquarters are located in Northbrook, Illinois. It also has
manufacturing operations located in Tempe, Arizona; Atlanta, Georgia; Harvard
and Elk Grove Village, Illinois; Elma, New York; Seguin, Texas; Tianjin, China;
Stotfold, England; Angers, France; Dublin, Ireland, and Penang, Malaysia. The
business has closed or sold its component manufacturing facilities in
Schaumburg, Illinois, San Jose, Costa Rica and Carlisle, Pennsylvania. It
transferred its Motorola Lighting Inc. facility in Lake Zurich to its new owner
upon the division's sale in the first quarter of 2000.

Internet and Networking Group

The Internet and Networking Group ("ING" or the "group") manufactures and
sells cable modems, cable access units, analog and digital transmission devices
and other data communication devices, as well as wireline networking

7

products like routers for carrying converged voice and data traffic. ING's
manufacturing occurs both inside and outside the United States. The majority of
distribution and sales occurs outside of the United States.

There are a few customers that, collectively, the loss of, or a significant
reduction in purchases by, could have a material adverse effect on the group's
results.

This group experiences widespread, intense competition from numerous
competitors ranging from some of the world's largest, diversified companies to
small, specialized firms. Competitive factors for the group include: price;
technology offered; product performance, features, quality, availability and
warranty; the quality and availability of service; time-to-market and company
image.

The group's backlog amounted to $164 million at December 31, 1999 and $166
million at December 31, 1998. The 1999 backlog is believed to be generally
firm, and approximately 100% of that amount is expected to be shipped during
2000. This forward-looking estimate of the firmness of such orders is subject
to future events, which may cause the percentage of the 1999 backlog actually
shipped to change.

Materials and components required by this group are relatively dependable and
certain, but normal fluctuations in market demand and supply could cause
temporary, selective shortages. Occasionally, shortages or extended delivery
periods have occurred in various component parts, the effects of which have
generally been industry-wide and short in duration. Natural gas, electricity
and oil are the primary sources of energy necessary for the segment's
operations. These types of energy are currently readily available, but
difficulties in obtaining any of the aforementioned items could affect the
segment's results.

Patent protection is very important to the group's business. Reference is
made to the material under the heading "General" for information relating to
patents and trademarks, research and development activities and seasonality of
business with respect to this group.

This group's headquarters are located in Mansfield, Massachusetts, with
manufacturing facilities in Mansfield, Massachusetts and Singapore;
additionally, research development and administration offices are located in
Scotts Valley and Palo Alto, California; Arlington Heights and Naperville,
Illinois, and Mansfield, Massachusetts.

Other Businesses

The Network Management Group ("NMG" or the "group"), part of the
Communications Enterprise, is comprised of the Network Communications Division
and the Satellite Ventures Division. NMG holds and manages investments in
wireless operating systems in a number of international jurisdictions and in
gateway companies for the Iridium(R) satellite communications network.

Merger with General Instrument Corporation

On January 5, 2000, Motorola and General Instrument Corporation completed
their previously announced merger. The merger positions Motorola as a leader in
the convergence of voice, video and data technologies. The new Broadband
Communications Sector will focus on solutions that deliver interactive
television, the Internet and cable modem business of Motorola's Internet and
Networking Group. Through the merger Motorola also acquired a majority
ownership in Next Level Communications, Inc., which completed an initial public
offering in the fourth quarter of 1999. For this year-end reporting, Motorola
continues to use the previous segments because management continued to make
operating decisions and assess performance based on these segments. For a
description of Motorola's 2000 segment realignment, see the information included
under the "2000 Segment Realignment" section of "Management's Discussion and
Analysis of Financial Condition and Results of Operations" contained in the
appendix to Motorola's Proxy Statement for the 2000 annual meeting of
stockholders.

Financial Information About Segments. The response to this section of Item 1
incorporates by reference Note 10, "Information by Segment and Geographic
Region," of the Notes to Consolidated Financial Statements contained in the
appendix to Motorola's Proxy Statement for the 2000 annual meeting of
stockholders.

Customers. Motorola is not dependent for a material part of its overall
business upon a single or a very few customers. Approximately 3.0 % of
Motorola's total sales and revenues in 1999 were received from various branches
and agencies, including the armed services, of the U.S. Government. All
contracts with the U.S. Government are subject to cancellation at the
convenience of the Government.

8

Government contractors, including Motorola, are routinely subjected to
numerous audits and investigations, which may be either civil or criminal in
nature. The consequences of these audits and investigations may include
administrative action to suspend business dealings with the contractor and to
exclude it from receiving new business. In addition, Motorola, like other
contractors, is internally reviewing aspects of its government contracting
operations, and, where appropriate, taking corrective actions and making
voluntary disclosures to the Government. These audits and investigations could
adversely affect Motorola and its results.

Backlog. Motorola's aggregate backlog position, including the backlog
position of subsidiaries through which some of its business units operate, as of
the end of the last two fiscal years, was approximately as follows:

December 31, 1999............................... $9.20 billion
December 31, 1998............................... $7.16 billion

No backlog relating to the Iridium program exists at December 31, 1999 as a
result of the Iridium bankruptcy proceedings described elsewhere herein. If
backlog relating to the Iridium program were removed from backlog at December
31, 1998, that number would decrease from $7.16 billion to $6.44 billion.

Except as previously discussed in this Item 1(c), the orders supporting the
1999 backlog amounts shown in the foregoing table are believed to be generally
firm, and approximately 95% of orders on hand at December 31, 1999 are expected
to be shipped during 2000. However, this is a forward-looking estimate of the
amount expected to be shipped, and future events may cause the percentage
actually shipped to change.

Motorola uses the percentage-of-completion method to recognize revenues and
costs associated with most long-term contracts. For contracts involving certain
technologies, revenues and profits, or parts thereof, are deferred until
technological feasibility is established and customer acceptance is obtained.
For other product sales, revenue is recognized at the time of shipment, and
reserves are established for price protection and cooperative marketing programs
with distributors.

Research and Development. Motorola's business segments participate in very
competitive industries with constant changes in technology. Throughout its
history, Motorola has relied, and continues to rely, primarily on its research
and development programs for the development of new products and its production
engineering capabilities for the improvement of existing products. Technical
data and product application ideas are exchanged among Motorola's business
segments on a regular basis. Management believes, looking forward, that
Motorola's commitment to research and development programs, both to improve
existing products and services and to develop new products and services,
together with its utilization of state-of-the-art technology, should allow each
of its segments to remain competitive.

Research and development expenditures relating to new product development or
product improvement, other than customer-sponsored contracts, were approximately
$3.44 billion in 1999, $2.89 billion in 1998 and $2.75 billion in 1997. In
addition, research funded under customer-sponsored contracts amounted to
approximately $108 million in 1999, $433 million in 1998 and $616 million in
1997.

Approximately 19,900 professional employees were engaged in such research
activities (including customer-sponsored contracts) during 1999.

Patents and Trademarks. As of December 31, 1999, Motorola owned approximately
10,542 utility and design patents in the United States and 11,265 patents in
foreign countries. These foreign patents are mostly counterparts of Motorola's
U.S. patents, but an increasing number result from research conducted outside
the United States and are originally filed in the country of origin. During
1999, Motorola was granted 1,271 U.S. utility and design patents. A number of
U.S. and foreign patents previously owned by Motorola were assigned to the
purchasers of certain businesses that were sold during 1999. Many of the
patents owned by Motorola are used in its operations or licensed for use by
others, and Motorola is licensed to use certain patents owned by others. In
some instances, certain of the patents licensed by Motorola to others have
generated significant amounts of revenue to Motorola.

Motorola has obtained registration of the "MOTOROLA" and "Stylized M Logo"
trademarks throughout the world for many products and services. Worldwide
recognition of these marks has resulted in their categorization as "famous"
marks. These marks are valuable corporate assets. Certain other trademarks and
service marks of Motorola are registered in relevant markets. Motorola's
increasing focus on marketing products directly to consumers is reflected in an
increasing emphasis on brand equity creation and protection. In the consumer
brand arena, four separate target categories have been designated by the
ACCOMPLI(TM), TALKABOUT(R), TIMEPORT(TM)

9

and V.SERIES(TM) brands. Global registration and support for these new brands is
an ongoing priority. The DIGITAL DNA(TM) brand remains a strong and highly
visible presence in the semiconductor branding strategy.

Environmental Quality. Motorola operations are from time to time the subjects
of investigations, conferences, discussions and negotiations with various
federal, state and local environmental agencies with respect to the discharge or
cleanup of hazardous waste and compliance by those operations with environmental
laws and regulations. The balance of the response to this section of Item 1
incorporates by reference the information contained under the caption
"Environmental and Legal" in Note 9, "Commitments and Contingencies: Other," of
the Notes to Consolidated Financial Statements contained in the appendix to
Motorola's Proxy Statement for the 2000 annual meeting of stockholders.

Miscellaneous. At December 31, 1999, there were approximately 121,000
employees of Motorola and its subsidiaries. The business of Motorola and its
industry segments has certain seasonal characteristics: the Semiconductor
Products segment has tended to have stronger, seasonally-adjusted sales in the
first half of the year; and sales of products, such as wireless telephones and
pagers, in consumer markets tend to increase in the fourth quarter. An increase
or decrease in large system orders in our infrastructure businesses could cause
volatility in orders, revenues and profits recognized in any particular period.

Business Risk Factors. Except for historical matters, the matters discussed
in this Form 10-K are forward-looking statements that involve risks and
uncertainties. Forward-looking statements include, but are not limited to,
statements under the following headings; (i) "Personal Communications Segment,"
about the allocation and regulation of frequencies, the impact from the loss of
key customers, the expected component shortages during 2000, expected shipments
during 2000, and the availability of supplies and labor; (ii) "Network Systems
Segment," about the allocation and regulation of frequencies, the impact from
the loss of key customers, expected shipments during 2000, and the availability
of supplies and labor; (iii) "Commercial, Government and Industrial Solutions
Segment," about the impact from the loss of key customers, the allocation and
regulation of frequencies, expected shipments during 2000, and the availability
of supplies; (iv) "Semiconductor Products Segment," about the impact from the
loss of key customers, the impact of available capacity, cyclical customer
demands, new product introductions and aggressive pricing, capital expenditures,
expected shipments during 2000, backlog and the availability of supplies; (v)
"Integrated Electronic Systems Sector," about the impact from the loss of key
customers, expected shipments during 2000, and the availability of supplies and
software; (vi) "Internet and Networking Group," about the expected shipments
during 2000, the impact from the loss of key customers, expected shipments
during 2000, and the availability of supplies; (vii) "General," about expected
shipments during 2000, seasonality of business, large system orders and
competitiveness through research and development and utilization of technology;
(viii) "Item 2: Properties," about the completion of facilities currently being
constructed and plans to sell or shut down currently operating facilities; and
(ix) "Item 3: Legal Proceedings," about the ultimate disposition of pending
legal matters.

Motorola wishes to caution readers that in addition to the important factors
described elsewhere in this Form 10-K, the following important factors, among
others, sometimes have affected, and in the future could affect, Motorola's
actual results and could cause Motorola's actual consolidated results during
2000, and beyond, to differ materially from those expressed in any forward-
looking statements made by, or on behalf of, Motorola:

Changes in Laws Affecting Frequency

. The effects of, and changes in, laws and regulations and other activities
of governments, agencies and similar organizations, including, but not
limited to, those affecting frequency, use and availability of spectrum
authorizations and licensing.

Risks from Large System Contracts

. Risks related to the trend towards increasingly large system contracts for
infrastructure equipment and the resulting reliance on large customers, the
technological risks of such contracts, especially when the contracts
involve new technology, and financial risks to Motorola under these
contracts, including the difficulty of projecting costs associated with
large contracts.

Component Shortages

. Motorola's ability to meet customer demands depends in part on our ability
to obtain timely delivery of

10

parts and components from our suppliers. Motorola has experienced component
shortages in the past, including components for wireless telephones, that
have adversely affected our operations. Although Motorola works closely
with our suppliers to avoid these types of shortages, there can be no
assurances that Motorola will not continue to encounter these problems in
the future.

Demand for Customer Financing

. Increasing demand for customer financing of equipment sales, particularly
infrastructure equipment, and the ability of Motorola to provide financing
on competitive terms with other companies.

Transition From Analog to Digital

. The ability of Motorola's wireless telephone business to continue its
transition to digital technologies and successfully compete in that
business and retain or gain market share. Motorola faces intense
competition in these markets from both established companies and new
entrants. Product life cycles can be short and new products are expensive
to develop and bring to market.

Development of New Products and Technologies

. The risks related to Motorola's significant investment in developing and
introducing new products such as digital wireless telephones, two-way and
voice paging, CDMA and other technologies for third-generation (3G)
wireless, products for transmission of telephony and high-speed data over
hybrid fiber coaxial cable systems, integrated digital radios, and
semiconductor products. These risks include: difficulties and delays in the
development, production, testing and marketing of products; customer
acceptance of products, particularly as Motorola's focus on the consumer
market increases; the development of industry standards; the significant
amount of resources Motorola must devote to the development of new
technology; and the ability of Motorola to differentiate its products and
compete with other companies in the same market.

Demand for Wireless Communications Equipment

. The need for continued significant demand for wireless communications
equipment, including equipment of the type Motorola manufactures or is
developing.

Ability to Compete in Semiconductor Market

. The ability of Motorola's semiconductor business to compete in the highly
competitive semiconductor market. Factors that could adversely affect
Motorola's ability to compete include: production inefficiencies and higher
costs related to underutilized facilities, including both wholly-owned and
joint venture facilities; shortage of manufacturing capacity for some
products; competitive factors, such as rival chip architectures, mix of
products, acceptance of new products and price pressures; risk of inventory
obsolescence due to shifts in market demand; the continued growth of
embedded technologies and systems and Motorola's ability to compete in that
market; and the effect of orders from Motorola's equipment businesses.

Success and Impact of Increased Use of Foundry Manufacturing Capacity

. The ability of Motorola's semiconductor business to increase its
utilization of foundry manufacturing capacity and the impact of such
efforts on capital expenditures, production costs and the ability to
satisfy delivery requirements.

Risks Related to the Iridium System

. Unfavorable outcomes to any currently pending or future litigation
involving the Iridium project.

. Difficulties, delays and unexpected liabilities or expenses encountered in
connection with the implementation of Iridium's liquidation proceedings,
including those encountered in finalizing and implementing the deorbiting
process and in resolving any remaining obligations Motorola has under its
agreements related to the Iridium project.

. Difficulties, delays and unexpected liabilities or expenses incurred in
effectively reallocating resources that were previously dedicated to the
Iridium project.

11

Outcome of Litigation

. The outcome of pending and future litigation and the protection and
validity of patents and other intellectual property rights. Patent and
other intellectual property rights of Motorola are important competitive
tools and many generate income under license agreements. There can be no
assurances as to the favorable outcome of litigation or that intellectual
property rights will not be challenged, invalidated or circumvented in one
or more countries.

Integration of New Businesses

. The ability of Motorola to integrate its newly acquired businesses, and to
achieve strategic objectives, cost savings and other benefits.

Recruitment and Retention of Employees

. The ability of Motorola to recruit and retain engineers and other highly
skilled personnel needed to compete in an intensely competitive market and
develop successful new products.

Development of Acquired Technologies

. During 1998 and 1999, Motorola acquired controlling and non-controlling
interests in several businesses that had technology that was not fully
developed. If the technology is not fully developed in a timely manner,
Motorola's investments in such companies could be materially adversely
impacted.

Strategic Alliances

. Motorola's success in partnering with other industry leaders to meet
customer product and service requirements, particularly in its
communications businesses.

Euro Conversion

. Risks related to the introduction of the euro currency in Europe, including
the ability of Motorola to successfully compete in Europe.

Additional Risk Factors Included In Proxy Statement

Certain portions of Motorola's Proxy Statement for the 2000 annual meeting of
stockholders with Management's Discussion and Analysis and Consolidated
Financial Statements are incorporated by reference into this Form 10-K. There
are additional important factors included therein, including those on pages F-25
through F-28 of the appendix to Motorola's Proxy Statement for the 2000 annual
meeting of stockholders, that sometimes have affected, and in the future could
affect, Motorola's actual results and could cause Motorola's actual consolidated
results during 2000, and beyond, to differ materially from those expressed in
any forward-looking statements made by, or on behalf of, Motorola.

Financial Information About Foreign and Domestic Operations and Export Sales.

Domestic export sales to third parties were $2.37 billion in 1999, $3.06
billion in 1998 and $3.98 billion in 1997. Domestic export sales to affiliates
were $6.57 billion in 1999, $4.96 billion in 1998 and $6.86 billion in 1997.

The remainder of the response to this section of Item 1 incorporates by
reference Note 8, "Commitments and Contingencies: Iridium" and Note 9,
"Commitments and Contingencies: Other," of the Notes to Consolidated Financial
Statements and the "1999 Compared to 1998" and "1998 Compared to 1997" sections
of "Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in the appendix to Motorola's Proxy Statement for the 2000
annual meeting of stockholders.

(R)Reg. U.S. Patent & Trademark Office.

MOTOROLA, Stylized M Logo, iDEN, ACCOMPLI, TALKABOUT, TIMEPORT, V.SERIES and
DIGITAL DNA are trademarks or registered trademarks of Motorola, Inc.

Iridium(R) is a registered trademark and service mark of Iridium LLC.

12

Item 2: Properties

Motorola's principal executive offices are located at 1303 East Algonquin
Road, Schaumburg, Illinois 60196. Its other major facilities in the United
States are located in Arlington Heights, Harvard, Libertyville, Northbrook and
Schaumburg, Illinois; Elma, New York; Phoenix, Chandler, Scottsdale, Mesa and
Tempe, Arizona; Boynton Beach and Plantation, Florida; Lawrenceville, Georgia;
Austin, Ft. Worth and Seguin, Texas; Mount Pleasant, Iowa; Mansfield,
Massachusetts, and San Jose, California. Motorola also operates manufacturing
facilities and sales offices in many other countries. (See "Item 1: Business"
for information regarding the location of the principal manufacturing facilities
for each industry segment.) Motorola owns 97 facilities (manufacturing, sales,
service and office), 52 of which are located in North America and 45 of which
are located in other countries. Motorola leases 511 such facilities, 245 of
which are located in North America and 266 of which are located in other
countries.

Motorola generally considers the productive capacity of the plants operated by
each of its industry segments adequate and suitable for the requirements of each
business group. New semiconductor product manufacturing facilities are under
construction in Xi-Qing, China and an expansion of the semiconductor product
manufacturing facility in Chandler, Arizona is currently underway and expected
to be completed during the second quarter of 2000. A new manufacturing facility
in Jaguariuna, Brazil was completed during the third quarter of 1999. This new
facility is being shared by a number of Motorola business units within the
Communications Enterprise. In addition to these new manufacturing locations,
Motorola continues with the global expansion of software centers around the
world. During 1999 we opened software centers in Montreal, Canada and Krakow,
Poland and announced a planned expansion at the software center in Adelaide,
Australia.

As part of Motorola's overall strategy to reduce operating costs and improve
the financial performance of the corporation, a number of businesses and
facilities were either sold or are currently up for sale. In connection with
the sale of the Semiconductor Components Group of the Semiconductor Products
Sector during 1999 Motorola sold facilities in Phoenix, Arizona; Aizu, Japan;
Seremban, Malaysia; Guadalajara, Mexico, and Carmona, the Philippines.
Semiconductor facilities in Chung-Li, Taiwan and Paju, South Korea were also
sold during 1999. Facilities that have been shut down and are currently up for
sale include facilities in Irvine, California; Research Triangle Park, North
Carolina; San Jose, Costa Rica, and two start-up facilities in Jaguariuna,
Brazil. Additional sites that were shut down in 1998 and sold during 1999 are
located in Huntsville, Alabama and Carlisle, Pennsylvania.

The extent of utilization of such manufacturing facilities varies from plant
to plant and from time to time during the year.

Item 3: Legal Proceedings

Motorola is currently a named defendant in seven cases arising out of alleged
groundwater, soil and air pollution in Phoenix and Scottsdale, Arizona.
McIntire et al. v. Motorola remains pending in the U.S. District Court for the
District of Arizona, while Baker et al. v. Motorola et al., Lofgren et al. v.
Motorola et al., Bentancourt et al. v. Motorola et al., Ford et al. v. Motorola
et al., Wilkins et al. v. Motorola et al and Dawson et al. v. Motorola, et al.
are pending in the Arizona Superior Court, Maricopa County. The McIntire
lawsuit, filed on December 20, 1991, involves approximately 920 plaintiffs who
allege that the operations of Motorola at several facilities in Phoenix and
Scottsdale, Arizona have caused property damage and health problems by
contaminating the soil, groundwater and air in the area surrounding those
facilities. The Baker lawsuit, filed on February 11, 1992, is a class action,
involving six representative individual named plaintiffs, alleging that Motorola
and a number of other defendants contaminated the soil, air and groundwater in
the Phoenix/Scottsdale area, diminishing property values and exposing members of
the class to possible adverse health effects. On August 24, 1994, the Baker
court certified two classes, a property damage class consisting of all persons
who since 1987 were residents, property owners or lessees of property which
overlies, or is adjacent to, the alleged groundwater pollution, and a medical
monitoring class consisting of all persons who resided in Phoenix and/or
Scottsdale for more than one year continuously during the years between 1955 and
1989, and who received potable drinking water containing trichloroethylene at a
level equal to or exceeding 2.0 parts per billion, on average. Motorola is now
the sole remaining defendant in the property claims in Scottsdale and East
Phoenix.

13

The Lofgren, Bentancourt, Ford, Wilkins and Dawson lawsuits, filed on April
6, 1993, July 16, 1993, June 10, 1994, July 19, 1995 and August 7, 1997,
respectively, were consolidated. The consolidated cases involved more than 200
plaintiffs, alleging that Motorola and a number of other defendants contaminated
the soil, air and groundwater in the Phoenix/Scottsdale area, causing health
problems. On June 1, 1998, the Lofgren court ruled inadmissible proffered
testimony from each of the plaintiffs' medical causation experts and granted
summary judgment on those personal injury claims in favor of Motorola and the
other remaining defendants. An appeal is expected after the court formally
enters final judgment.

All seven pending lawsuits described above seek compensatory and punitive
damages. The McIntire complaint includes personal injury and property damage
claims and seeks injunctive relief. The Baker complaint seeks damages for
medical monitoring and alleges claims for property, business and economic loss
and seeks declaratory and injunctive relief. The consolidated Lofgren cases
involve claims for personal injury.

A class action, In Re Nextel Communications Securities Litigation, against
Nextel Communications, Inc., certain of its officers and directors and Motorola
for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and SEC Rule 10b-5, is pending in the United States District Court
for the District of New Jersey. The pending complaint, a consolidation of cases
previously filed against Nextel, was filed on July 11, 1995 and maintains that
the defendants artificially inflated the price of Nextel common stock through a
series of alleged misrepresentations and omissions. Plaintiffs propose a class
period of July 22, 1993 through January 10, 1995 and seek an unspecified amount
of monetary damages. On February 17, 2000, the parties entered into a
stipulation of settlement. The hearing of the proposed settlement is scheduled
for June 15, 2000.

Motorola and several of its officers and directors are named defendants in
a consolidated class action, Kaufman, et. al. v Motorola, Inc., et. al., for
alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act
and SEC Rule 10b-5. The case was filed on May 19, 1995 and is pending in the
U.S. District Court for the Northern District of Illinois. Plaintiffs claim that
Motorola and the individual defendants inflated the price of Motorola stock by
failing to timely disclose a buildup of cellular phone inventory with its
distributors. The district court has certified a class consisting of purchasers
of Motorola common stock during the period of November 4, 1994 through February
17, 1995. Plaintiffs seek an unspecified amount of damages. A recent trial date
of March 6, 2000 was vacated and no new trial date has been set.

Motorola has been a defendant in several cases arising out of its
manufacture and sale of portable cellular telephones. Jerald P. Busse, et al. v.
Motorola, Inc. et al., filed on October 26, 1995 in the Circuit Court of Cook
County, Illinois, Chancery Division, is a purported class action alleging that
defendants have failed to adequately warn consumers of the alleged dangers of
cellular telephones and challenging ongoing safety studies as invasions of
privacy. All claims were dismissed on defendants' motion. Upon plaintiffs'
motion for reconsideration, the Court allowed the plaintiffs to replead the
invasion of privacy claims. Defendants have once again filed a motion for
summary judgment. Kane, et al., v. Motorola, Inc., et al., filed on December 13,
1993 in the Circuit Court of Cook County, Illinois, alleges that plaintiffs'
brain cancer was caused by or aggravated by a prototype communication device.
Medica et al., v. Motorola, Inc., et el., filed September 7, 1999, alleges that
use of a Motorola cellular phone caused plaintiff Phil Medica's malignant brain
tumor.

On October 16, 1998, the plaintiffs in Pennsylvania Bancshares, Inc. et al.
v. Motorola, Inc., et al., a purported class action filed on October 10, 1995 in
the Court of Common Pleas, Montgomery County, Pennsylvania, filed a notice of
voluntary dismissal with prejudice as to all claims for monetary relief and
without prejudice as to all claims for equitable relief. Plaintiffs alleged that
Motorola systematically engages in deceptive trade practices, including without
limitation, intentionally misrepresenting the quality of certain types of
cellular telephones. The dismissal is currently before the court for decision.
Silber, et al. v. Motorola, Inc., et al., filed on August 1, 1995 in the Supreme
Court of The State of New York, County of Suffolk, which was transferred from
the County of New York, is an action wherein it is alleged that a traffic
accident was caused by the use of a cellular phone. On April 27, 1999, Motorola
obtained summary judgment on plaintiffs' claims. Plaintiffs have appealed.

Motorola has been named as one of several defendants in a number of nearly
identical putative class action securities lawsuits arising out of alleged
material misrepresentations or omissions regarding difficulties in the satellite
communications business of Iridium World Communications, LTD, Iridium LLC and
Iridium Operating LLC. Freeland v. Iridium World Communications, LTD, et al.,
Yong v. Iridium World Communications, LTD, et al., Kleinman v. Iridium World
Communications, LTD, et al., Marshall v. Iridium World Communications, LTD, et
al., Ackerman v. Iridium World Communications, LTD, et al., Hargrove v. Iridium
World Communications, LTD, et al.,

14

Turner v. Iridium World Communications, LTD, et al., Astiazaran v. Iridium World
Communications, LTD, et al., Coyle v. Iridium World Communications, LTD, et al.,
Demopoulos v. Iridium World Communications, LTD, et al., Evans v. Iridium World
Communications, LTD, et al., Ginechese v. Iridium World Communications, LTD, et
al., Hammerschmidt v. Iridium World Communications, LTD, et al., Hoyt v. Iridium
World Communications, LTD, et al., Mace v. Iridium World Communications, LTD, et
al., Mandelbaum v. Iridium World Communications, LTD, et al., Maytorena v.
Iridium World Communications, LTD, et al., Phiel v. Iridium World
Communications, LTD, et al., Strougo v. Iridium World Communications, LTD, et
al., and Garvin v. Iridium World Communications, LTD, et al., have all been
filed in the US District Court for the District of Columbia. The alleged classes
consist of purchasers of Iridium securities during the period from July 14, 1998
to May 13, 1999. A motion to consolidate the cases is currently pending. As a
result of bankruptcy proceedings regarding Iridium LLC and other Iridium
business entities, these cases have been stayed as to the Iridium business
defendants but are continuing as to Motorola and all other defendants. In
addition, Motorola has been named as a defendant in Andrews, et al. v. Iridium
World Communications, LTD, et al., in the Superior Court of California (San
Diego). The approximately 42 plaintiffs were purchasers of Iridium securities
and allege violations of California law relating to securities.

The information contained under the caption "Environmental and Legal" in
Note 9, "Commitments and Contingencies: Other," of the Notes to Consolidated
Financial Statements contained in the appendix to Motorola's Proxy Statement for
the 2000 annual meeting of stockholders is incorporated herein by reference.

Motorola is a defendant in various other suits, claims and investigations
which arise in the normal course of business. In the opinion of management, the
ultimate disposition of these matters, including those matters described above
in this Item 3, will not have a material adverse effect on the consolidated
financial position, liquidity or results of operations of Motorola.

Item 4: Submission of Matters to a Vote of Security Holders

Not applicable.

Executive Officers of the Registrant

Following are the persons who were the executive officers of Motorola as of
February 29, 2000, their ages as of January 1, 2000, their current titles and
positions held during the last five years:

Christopher B. Galvin; age 49; Chairman of the Board since May 1999; Chief
Executive Officer since January 1997; President and Chief Operating Officer from
December 1993 to January 1997.

Robert W. Galvin; age 77; Chairman of the Executive Committee of the Board of
Directors since January 1990.

Robert L. Growney; age 57; President and Chief Operating Officer since January
1997; Executive Vice President and President and General Manager, Messaging,
Information and Media Sector from January 1994 to January 1997.

Keith J. Bane; age 60; Executive Vice President and President, Global Strategy
and Corporate Development since August 1999; Executive Vice President and
President, Americas Region from March 1997 to August 1999; Executive Vice
President and Chief Corporate Staff Officer from February 1995 to March 1997;
Senior Vice President and Chief Corporate Staff Officer from August 1994 to
February 1995.

Robert L. Barnett; age 59; Executive Vice President and President, Commercial,
Government and Industrial Solutions Sector, Communications Enterprise since July
1998; Executive Vice President and President, Land Mobile Products Sector from
March 1997 to July 1998; Senior Vice President and President and General
Manager, Land Mobile Products Sector from March 1996 to March 1997; Corporate
Vice President and General Manager, iDEN Group, Land Mobile Products Sector from
May 1995 to March 1996; independent consultant to the telecommunications
industry from 1992 to May 1995.

Edward Breen; age 43; Executive Vice President and President, Broadband
Communications Sector since January 2000; Chairman of the Board, President and
Chief Executive Officer of General Instrument Corporation from December 1997 to
January 2000; President, Broadband Networks Group of General Instrument
Corporation from February 1996 to October 1997; Executive Vice President,
Terrestrial Systems of General Instrument Corporation from October 1994 to
January 1996.

15

Arnold S. Brenner; age 62; Executive Vice President and President, Global
Government Relations since 1997; Acting President, Motorola Europe, Middle East
and Africa, from April 1998 to January 1999; Executive Vice President and
General Manager, Japan Group from November 1988 to 1997.

Glenn A. Gienko; age 47; Executive Vice President and Motorola Director of Human
Resources since May 1996; Senior Vice President and Director of Human Resources
from June 1995 to May 1996; Corporate Vice President - Human Resources, General
Systems Sector from February 1994 to June 1995.

Merle L. Gilmore; age 51; Executive Vice President and President, Communications
Enterprise since July 1998; Executive Vice President and Deputy to the Chief
Executive Office for the Enterprise-Wide Communications Business Plan from April
1998 to July 1998; Executive Vice President and President, Motorola Europe,
Middle East and Africa from March 1997 to April 1998; Executive Vice President
and President and General Manager, Land Mobile Products Sector, from July 1994
to March 1997.

Joseph M. Guglielmi; age 58; Executive Vice President and President, Integrated
Electronic Systems Sector ("IESS") since December 1998; Senior Vice President
and President, IESS from October 1998 to December 1998; Senior Vice President
and Office of the President, IESS from August 1998 to October 1998; Corporate
Vice President and Office of the President, IESS from July 1998 to August 1998;
Corporate Vice President and General Manager, Motorola Computer Group from
September 1995 to July 1998; Chairman and Chief Executive Officer of Taligent,
Inc., a software development company, from March 1992 to August 1995; Corporate
Vice President, International Business Machines from April 1987 to February
1992.

Bo Hedfors; age 55; Executive Vice President and President, Network Solutions
Sector, Communications Enterprise ("NSS") since February 1999; Senior Vice
President and President, NSS from December 1998 to February 1999; Corporate Vice
President and President, NSS from September 1998 to December 1998; President and
Chief Executive Officer of Ericsson Inc., the U.S. subsidiary of Telefon AB LM
Ericsson, from 1994 to August 1998.

Carl F. Koenemann; age 61; Executive Vice President and Chief Financial Officer
since December 1991.

Ferdinand C. Kuznik; age 58; Executive Vice President and President, Motorola
Europe, Middle East and Africa since July 1999; Executive Vice President and
President, Personal Communications Sector, Communications Enterprise from July
1998 to July 1999; Executive Vice President and President, Cellular Subscriber
Sector from August 1997 to July 1998; Senior Vice President and General Manager,
Radio Network Solutions Group, Land Mobile Products Sector from 1994 to August
1997.

A. Peter Lawson; age 53; Executive Vice President, General Counsel and Secretary
since May 1998; Senior Vice President, General Counsel and Secretary from
November 1996 to May 1998; Senior Vice President and General Counsel from March
1996 to November 1996; Senior Vice President and Assistant General Counsel from
November 1994 to March 1996.

James A. Norling; age 57; Executive Vice President and President, Personal
Communications Sector, Communications Enterprise since July 1999; Executive Vice
President, Deputy to the Chief Executive Office and President, Motorola Europe,
Middle East and Africa from January 1999 to July 1999; Executive Vice President
and Deputy to the Chief Executive Office and President, Global Telecom Solutions
Group from July 1998 to January 1999; Executive Vice President and President,
Messaging, Information and Media Sector from January 1997 to July 1998;
Executive Vice President and President, Motorola Europe, Middle East and Africa
from April 1993 to January 1997.

C. D. Tam; age 55; Executive Vice President and President, Asia Pacific Region
since January 1, 1999; Senior Vice President and General Manager of the
Transportation Systems Group, Semiconductor Products Sector from January 1997 to
December 1998; Senior Vice President and General Manager, Asia Pacific
Semiconductor Group, Semiconductor Products Sector from January 1991 to December
1996.

Frederick T. Tucker; age 59; Executive Vice President, Deputy to the Chief
Executive Office and President, Semiconductor Products Sector since January
2000; Executive Vice President and Deputy to the Chief Executive Office from
October 1998 to January 2000; Executive Vice President and President and General
Manager, Integrated Electronic Systems Sector ("IESS") from July 1997 to October
1998; Executive Vice President and General Manager, IESS from September 1992 to
July 1997.

16

Richard W. Younts; age 60; Executive Vice President and Senior Advisor on Asian
Affairs since December 1998; Executive Vice President and President, Asia
Pacific Region from 1997 to December 1998; Executive Vice President and
Corporate Executive Director International-Asia and Americas from December 1993
to 1997.

The above executive officers will serve as officers of Motorola until the
regular meeting of the Board of Directors in May 2000 or until their respective
successors shall have been elected. Christopher B. Galvin is a son of Robert W.
Galvin. There is no family relationship between any of the other executive
officers listed above.

PART II

Item 5: Market for Registrant's Common Equity and Related Stockholder Matters

Motorola's common stock is listed on the New York, Chicago, London and
Tokyo Stock Exchanges. The remainder of the response to this Item incorporates
by reference the information under the caption "Quarterly and Other Financial
Data" of Motorola's Consolidated Financial Statements contained in the appendix
to Motorola's Proxy Statement for the 2000 annual meeting of stockholders.

Item 6: Selected Financial Data

The response to this Item incorporates by reference the information under
the caption "Five Year Financial Summary" contained in the appendix to
Motorola's Proxy Statement for the 2000 annual meeting of stockholders.

Item 7: Management's Discussion and Analysis of Financial Condition and Results
of Operations

The response to this Item incorporates by reference the information under
the caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained in the appendix to Motorola's Proxy Statement
for the 2000 annual meeting of stockholders.

Item 8: Financial Statements and Supplementary Data

The response to this Item incorporates by reference the information under
the captions "Management's Responsibility For Financial Statements,"
"Independent Auditors' Report," "Consolidated Statements of Operations,"
"Consolidated Balance Sheets," "Consolidated Statements of Stockholders'
Equity," "Consolidated Statements of Cash Flows," "Notes to Consolidated
Financial Statements," "Five-Year Financial Summary" and "Quarterly and Other
Financial Data" of Motorola's Consolidated Financial Statements contained in the
appendix to Motorola's Proxy Statement for the 2000 annual meeting of
stockholders.

Item 9: Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure

None.

PART III

Item 10: Directors and Executive Officers of the Registrant

The response to this Item required by Item 401 of Regulation S-K, with
respect to directors, incorporates by reference the information under the
caption "Nominees" on pages 2 through 5 of Motorola's Proxy Statement for the
2000 annual meeting of stockholders and, with respect to executive officers, is
contained in Part I hereof under the caption "Executive Officers of the
Registrant". The response to this Item required by Item 405 of Regulation S-K
incorporates by reference the information under the caption "Section 16(a)
Beneficial Ownership Reporting Compliance" on page 23 of Motorola's Proxy
Statement for the 2000 annual meeting of stockholders.

Item 11: Executive Compensation

The response to this Item incorporates by reference the information under the
caption "Director Compensation" on pages 6 and 7 of Motorola's Proxy Statement
for the 2000 annual meeting of stockholders and "Summary Compensation Table,"
"Stock Option Grants in 1999," "Aggregated Option Exercises in 1999 and 1999
Year-End Option Values," "Long-Term Incentive Plans - Awards in 1999,"
"Retirement Plans," and "Termination of Employment and Change in Control
Arrangements" on pages 15 through 19 of Motorola's Proxy Statement for the 2000
annual meeting of stockholders.

17

Item 12: Security Ownership of Certain Beneficial Owners and Management

The response to this Item incorporates by reference the information under
the caption "Ownership of Securities" on pages 13 and 14 of Motorola's Proxy
Statement for the 2000 annual meeting of stockholders.

Item 13: Certain Relationships and Related Transactions

The response to this Item incorporates by reference the relevant
information under the caption "Director Compensation" on pages 6 and 7 of
Motorola's Proxy Statement for the 2000 annual meeting of stockholders.

PART IV

Item 14: Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) 1. Financial Statements

See Part II, Item 8 hereof.

2. Financial Statement Schedule and Auditors' Report

Title Schedule
----- --------

Valuation and Qualifying Accounts................. II

All schedules omitted are inapplicable or the information required is
shown in the Consolidated Financial Statements or notes thereto. The
auditors' report of KPMG LLP with respect to the Financial Statement
Schedule is located at page 19.

3. Exhibits

Exhibits required to be attached by Item 601 of Regulation S-K are
listed in the Exhibit Index attached hereto, which is incorporated
herein by this reference. Following is a list of management contracts
and compensatory plans and arrangements required to be filed as exhibits
to this form by Item 14(c) hereof:

Motorola Executive Incentive Plan ("MEIP")
Motorola Long Range Incentive Plan of 1994
Share Option Plan of 1982
Share Option Plan of 1991
Share Option Plan of 1996
Motorola Elected Officers Supplementary Retirement Plan
Executive Health Plan
Accidental Death and Dismemberment Insurance for MEIP Participants
Arrangement for Directors' Fees
Retirement Plan for Non-Employee Directors
Deferred Fee Plan for Outside Directors
Motorola Non-Employee Directors Stock Plan
Officers' Group Life Insurance Policy
Form of Termination Agreement
Policy Protecting Salary and Medical Benefits
Insurance Policy for Non-Employee Directors
Motorola Incentive Plan of 1998
Consultant Agreement with Gary L. Tooker
Motorola Omnibus Incentive Plan of 2000

(b) Reports on Form 8-K.

Motorola filed no reports on Form 8-K during the last quarter of 1999.

(c) Exhibits:

See Item 14(a)3 above.

18

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Motorola, Inc.

Under date of January 17, 2000, except as to Note 15, which is as of March
17, 2000, we reported on the consolidated balance sheets of Motorola, Inc. and
subsidiaries as of December 31, 1999 and 1998, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1999, as contained in the 1999
proxy statement to stockholders. These consolidated financial statements and our
report thereon are incorporated by reference in the annual report on Form 10-K
for the year ended December 31, 1999. In connection with our audits of the
aforementioned consolidated financial statements, we also audited the related
financial statement schedule as listed in Part IV, Item 14(a)2. The financial
statement schedule is the responsibility of Motorola's management. Our
responsibility is to express an opinion on the financial statement schedule
based on our audits.

In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein

KPMG LLP

Chicago, Illinois
January 17, 2000, except as to Note 15,
which is as of March 17, 2000

19

SCHEDULE II
MOTOROLA, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS
Three Years Ended December 31, 1999
(In millions)

Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Additions
------------------------------
Balance at Charged to Charged to Balance at
beginning of costs & other end of
period expenses accounts (6) Deductions period
-----------------------------------------------------------------------------

1999
Restructuring and other charges............ $666 --- ($232) $ 394 (1) $ 40
Allowance for doubtful accounts............ $220 $ 196 --- $ 127 (2) $ 289
Allowance for losses on commercial
receivables.............................. $167 $ 125 --- --- $ 292
Product and service warranties............. $333 $ 252 --- $ 259 (3) $ 326
Customer reserves.......................... $422 $ 500 --- $ 512 (4) $ 410
Iridium reserves........................... $649 $2,069 --- $ 763 (5) $1,955

1998
Restructuring and other charges............ $159 $1,980 ($22) $1,451 (1) $ 666
Allowance for doubtful accounts............ $173 $ 138 --- $ 91 (2) $ 220
Allowance for losses on commercial
receivables.............................. --- $ 167 --- --- $ 167
Product and service warranties............. $337 $ 226 --- $ 230 (3) $ 333
Customer reserves.......................... $602 $ 306 --- $ 486 (4) $ 422
Iridium reserves........................... $554 $ 95 --- --- $ 649

1997
Restructuring and other charges............ --- $ 327 ($9) $ 159 (1) $ 159
Allowance for doubtful accounts............ $137 $ 75 --- $ 39 (2) $ 173
Product and service warranties............. $314 $ 218 --- $ 195 (3) $ 337
Customer reserves.......................... $385 $1,060 --- $ 843 (4) $ 602
Iridium reserves........................... $422 $ 132 --- --- $ 554
- --------------------------------------------------------------------------------------------------------------------------

(1) Restructuring and other charges accrual usage
(2) Uncollectable accounts written off
(3) Warranty claims paid
(4) Customer claims paid/reductions in reserves
(5) Iridium reserves accrual usage
(6) Reversal into income

20

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Motorola, Inc.

We consent to incorporation by reference in the registration statements on
Form S-8 (Nos. 33-59285, 333-03681, 333-12817, 333-51847, 333-65941, 333-82681,
333-94547 and 333-88735) of Motorola, Inc. of our reports dated January 17,
2000, except as to Note 15, which is as of March 17, 2000, with respect to the
consolidated balance sheets of Motorola, Inc. and subsidiaries as of December
31, 1999 and 1998, and the related consolidated statements of operations,
stockholders' equity, and cash flows and the related financial statement
schedule for each of the years in the three-year period ended December 31, 1999,
which reports appear in or are incorporated by reference in the annual report on
Form 10-K of Motorola, Inc. for the year ended December 31, 1999.

KPMG LLP

Chicago, Illinois
March 20, 2000

21

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Motorola, Inc. has duly caused this amended report to be
signed on its behalf by the undersigned, thereunto duly authorized.

MOTOROLA, INC.

By: /s/ Christopher B. Galvin
--------------------------------
Christopher B. Galvin
Chairman of the Board and
Chief Executive Officer

March 17, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934, this
amended report has been signed below by the following persons on behalf of
Motorola, Inc. and in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ Christopher B. Galvin Chairman of the Board and 3/17/00
- ------------------------------------------------
Christopher B. Galvin Chief Executive Officer
(Principal Executive Officer)

/s/ Carl F. Koenemann Executive Vice President and 3/17/00
- ------------------------------------------------
Carl F. Koenemann Chief Financial Officer
(Principal Financial Officer)

/s/ Anthony M. Knapp Senior Vice President and Controller 3/17/00
- ------------------------------------------------
Anthony M. Knapp (Principal Accounting Officer)

/s/ Ronnie C. Chan Director 3/17/00
- ------------------------------------------------
Ronnie C. Chan

/s/ H. Laurance Fuller Director 3/17/00
- ------------------------------------------------
H. Laurance Fuller

/s/ Robert W. Galvin Director 3/17/00
- ------------------------------------------------
Robert W. Galvin

/s/ Robert L. Growney Director 3/17/00
- ------------------------------------------------
Robert L. Growney

/s/ Anne P. Jones Director 3/17/00
- ------------------------------------------------
Anne P. Jones

22

Signature Title Date
--------- ----- ----

/s/ Donald R. Jones Director 3/17/00
- ------------------------------------------------
Donald R. Jones

/s/ Judy C. Lewent Director 3/17/00
- ------------------------------------------------
Judy C. Lewent

/s/ Walter E. Massey Director 3/17/00
- ------------------------------------------------
Dr. Walter E. Massey

/s/ Nicholas Negroponte Director 3/17/00
- ------------------------------------------------
Nicholas Negroponte

/s/ John E. Pepper, Jr. Director 3/17/00
- ------------------------------------------------
John E. Pepper, Jr.

/s/ Samuel C. Scott III Director 3/17/00
- ------------------------------------------------
Samuel C. Scott III

/s/ Gary L. Tooker Director 3/17/00
- ------------------------------------------------
Gary L. Tooker

/s/ B. Kenneth West Director 3/17/00
- ------------------------------------------------
B. Kenneth West

/s/ John A. White Director 3/17/00
- ------------------------------------------------
Dr. John A. White

23

EXHIBIT INDEX

Exhibit No. Exhibit
- ----------- -------

3.1 Restated Certificate of Incorporation of Motorola, Inc., as amended
(incorporated by reference to Exhibit 3(i)(b) to Motorola's Quarterly
Report on Form 10-Q for the fiscal quarter ended April 2, 1994).

3.2 Certificate of Designations, Preferences and Rights of Junior
Participating Preferred Stock, Series B (incorporated by reference to
Exhibit 3.3 to Motorola's Registration Statement on Form S-3 dated
January 20, 1999 (Registration No. 333-70827)).

3.3 By-Laws of Motorola, Inc., revised as of February 17, 1999
(incorporated by reference to Exhibit 3.3 to Motorola's Annual Report
on Form 10-K for the fiscal year ended December 31, 1998).

4.1 Rights Agreement dated November 5, 1998 between Motorola, Inc., and
Harris Trust and Savings Bank, as Rights Agent (incorporated by
reference to Exhibit 1.1 to Amendment No. 1 to Motorola's Registration
Statement on Form 8-A/A dated March 16, 1999).

4.2 Instruments defining the rights of holders of long-term debt of the
registrant and of all subsidiaries for which consolidated or
unconsolidated financial statements are required to be filed are being
omitted pursuant to paragraph (4)(iii)(A) of Item 601 of Regulation S-
K. Registrant agrees to furnish a copy of any such instrument to the
Commission upon request.

10.1 Motorola Executive Incentive Plan as amended through February 4, 1998,
(incorporated by reference to Exhibit 10.1 to Motorola's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 27, 1998).

10.2 Motorola Long Range Incentive Plan of 1994, as amended through
February 4, 1998 (incorporated by reference to Exhibit 10.2 to
Motorola's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 27, 1998).

10.3 Share Option Plan of 1982, as amended through March 24, 1992
(incorporated by reference to Exhibit 10.3 to Motorola's Annual Report
on Form 10-K for the fiscal year ended December 31, 1990, Exhibit
10.2(a) to Motorola's Annual Report on Form 10-K for the fiscal year
ended December 31, 1991 and Exhibit 10.3 to Motorola's Annual Report
on Form 10-K for the fiscal year ended December 31, 1992).

10.4 Share Option Plan of 1991, as amended through August 7, 1995
(incorporated by reference to Exhibit 10.4 to Motorola's Annual Report
on Form 10-K for the fiscal year ended December 31, 1993 and Exhibit
10.4 to Motorola's Report on Form 10-K for the fiscal year ended
December 31, 1995).

10.5 Resolutions Amending Sections 8 and 10(2) of the Share Option Plan of
1982, and Resolutions Amending Sections 7 and 9(b) of the Share Option
Plan of 1991, effective August 15, 1996 (incorporated by reference to
Exhibit 10.5 to Motorola's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996).

10.6 Share Option Plan of 1996, as amended through May 7, 1997
(incorporated by reference to Exhibit 10 to Motorola's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 28, 1997).

10.7 Motorola Elected Officers Supplementary Retirement Plan, as amended
through February 6, 1995 (incorporated by reference to Exhibit 10.5 to
Motorola's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994).

10.8 Executive Health Plan (incorporated by reference to Exhibit 10.8 to
Motorola's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996).

10.9 Accidental death and dismemberment insurance for MEIP participants
(incorporated by reference to Exhibit 10.7 to Motorola's Annual Report
on Form 10-K for the fiscal year ended December 31, 1990).

10.10 Arrangement for directors' fees and retirement plan for non-employee
directors (description incorporated by reference from pages 5 and 6 of
Motorola's Proxy Statement for the 2000 annual meeting of
stockholders).

10.11 Deferred Fee Plan for Outside Directors, as amended February 6, 1996
(incorporated by reference to

24

Exhibit 10.9 to Motorola's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995).

10.12 Motorola Non-Employee Directors Stock Plan, as amended and restated on
February 4, 1998 (incorporated by reference to Exhibit 10.12 to
Motorola's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 27, 1998).

10.13 Officers' Group Life Insurance Policy (incorporated by reference to
Exhibit 10.10 to Motorola's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990).

10.14 Form of Termination Agreement in respect of a change in control
(incorporated by reference to Exhibit 10.15 to Motorola's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989).

10.15 Policy protecting salary and medical benefits of employees in the
event of an unsolicited change in control (incorporated by reference
to Exhibit 10.16 to Motorola's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990).

10.16 Insurance policy covering non-employee Directors (incorporated by
reference to the description on page 6 of Motorola's Proxy Statement
for the 1999 annual meeting of stockholders and to Exhibit 10.16 to
Motorola's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989).

10.17 Iridium Space System Contract between Motorola, Inc. and Iridium,
Inc., as amended to date, and Iridium Communications Systems
Operations and Maintenance Contract between Motorola, Inc. and
Iridium, Inc., as amended to date (incorporated by reference to
Exhibits 99.2 and 99.3, respectively, to Motorola's Current Report on
Form 8-K dated August 2, 1993 and Exhibits 99(a) and 99(b),
respectively, to Motorola's Quarterly Report on Form 10-Q for the
quarter ended October 1, 1994).

10.18 Motorola Incentive Plan of 1998 (incorporated by reference to Exhibit
10 to Motorola's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 28, 1998).

10.19 Consultant Agreement dated September 30, 1999 between Motorola, Inc.
and Gary L. Tooker (incorporated by reference to Exhibit 10 to
Motorola's Quarterly Report on Form 10-Q for the fiscal quarter ended
October 2, 1999).

10.20 Agreement and Plan of Merger dated September 14, 1999 between
Motorola, Inc., Lucerne Acquisition Corp. and General Instrument
Corporation (incorporated by reference to Exhibit 2.1 to Amendment No.
2 to Motorola's Registration Statement on Form S-4 dated November 29,
1999).

* 10.21 Motorola Omnibus Incentive Plan of 2000.

* 21 Subsidiaries of Motorola.

23 Consent of KPMG LLP. See page 21 of the Annual Report on Form 10-K of
which this Exhibit Index is a part.

* 27 Financial Data Schedule (filed only electronically with SEC).

_______________________________
* Filed herewith

25