-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QU/UNSIlo8do4oOPURHiLqC3PvRNFYJHY9nCYtO/klAaO51/SRCDUjYjBV5wEplF vgMPpVrqMXghmrjCZpYZvg== 0000950131-99-002208.txt : 19990412 0000950131-99-002208.hdr.sgml : 19990412 ACCESSION NUMBER: 0000950131-99-002208 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19990409 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOTOROLA INC CENTRAL INDEX KEY: 0000068505 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 361115800 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-76041 FILM NUMBER: 99591099 BUSINESS ADDRESS: STREET 1: 1303 E ALGONQUIN RD CITY: SCHAUMBURG STATE: IL ZIP: 60196 BUSINESS PHONE: 8475765000 FORMER COMPANY: FORMER CONFORMED NAME: MOTOROLA DELAWARE INC DATE OF NAME CHANGE: 19760414 S-3 1 FORM S-3 As filed with the Securities and Exchange Commission on April 9, 1999 Registration No. 333- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM S-3 REGISTRATION STATEMENT Under the Securities Act of 1933 -------------- MOTOROLA, INC. (Exact name of Registrant as specified in its charter) -------------- Delaware 36-1115800 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation) -------------- 1303 East Algonquin Road Schaumburg, Illinois 60196 (847) 576-5000 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) -------------- With a copy to: Carl F. Koenemann Jeffrey A. Brown Executive Vice President Senior Counsel and Chief Financial Officer 1303 East Algonquin Road 1303 East Algonquin Road Schaumburg, Illinois 60196 Schaumburg, Illinois 60196 (847) 576-5014 (847) 576-5000 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------- Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act of 1933, please check the following box. [_] CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
Proposed Amount Maximum Amount of Title of Each Class of to be Aggregate Offering Registration Securities to Be Registered (1) Registered (2) Price (2) Fee (3) - ------------------------------------------------------------------------------- Debt Securities, Common Stock, par value $3 per share, Debt Securities Warrants and Common Stock Warrants................ $1,000,000,000 $1,000,000,000 $278,000 - -------------------------------------------------------------------------------
- ------------------------------------------------------------------------------- (1) Includes Debt Securities that may be issued upon exercise of Debt Security Warrants and shares of Common Stock that may be issued upon exercise of Common Stock Warrants or upon conversion of Debt Securities. Also includes preferred stock purchase rights relating to shares of Common Stock and securities issuable upon conversion of convertible securities for no separate consideration. Prior to the occurrence of certain events, the preferred stock purchase rights will not be evidenced separately from the Common Stock. (2) Or the equivalent thereof in one or more foreign currencies or composite currencies, including the Euro. If any Debt Securities or Debt Securities Warrants are issued at an original issue discount, such greater amount as shall result in net proceeds to the Registrant of $1,000,000,000. (3) The registration fee has been calculated pursuant to Rule 457(o) and reflects the offering price rather than the principal amount, of any Debt Securities issued at a discount. -------------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +The information in this preliminary prospectus is not complete and may be + +changed. We cannot sell these securities until the registration statement + +covering them has been declared effective by the SEC. This preliminary + +prospectus is not an offer to sell these securities and we are not soliciting + +offers to buy these securities in any state where the offer or sale is not + +permitted. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED APRIL 9, 1999 PROSPECTUS $1,000,000,000 Debt Securities and Debt Securities Warrants Common Stock and Common Stock Warrants ----------- We may use this prospectus to offer and sell securities from time to time. The types of securities we may sell include: . unsecured senior debt securities . common stock . unsecured subordinated . warrants to purchase common stock debt securities . units consisting of any combination of these . warrants to purchase debt securities securities We will provide the specific terms of these securities in supplements to this prospectus prepared in connection with each offering. These terms may include: In the case of any securities: In the case of . offering price debt securities: In the case of warrants: . size of . interest rate . the types of securities that may be offering acquired upon exercise . maturity . underwriting . expiration date discounts . ranking . exercise price . denomination or . whether they currency (other may be redeemed than with prior to respect to maturity common stock) . conditions to exercisability . whether they are convertible into common stock The securities offered will contain other significant terms and conditions. Please read this prospectus and the applicable prospectus supplement carefully before you invest. ----------- These securities have not been approved by the Securities and Exchange Commission or any state securities commission, nor have they determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense. ----------- The date of this prospectus is , 1999. ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the "SEC") using a "shelf" registration process. Under this shelf process, we may sell: . unsecured senior debt securities . common stock . unsecured subordinated debt securities . warrants to purchase common stock . warrants to purchase debt securities . units consisting of any combination of these securities in one or more offerings up to an aggregate initial public offering price of $1,000,000,000 or amounts equivalent to $1,000,000,000 in one or more foreign currencies, including the Euro. This prospectus provides you with a general description of those securities. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of the securities and the offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read this prospectus and the applicable prospectus supplement together with the additional information described below under the heading "Where You Can Find More Information." The registration statement that contains this prospectus (including the exhibits) contains additional important information about Motorola, Inc. and the securities offered under this prospectus. Specifically, we have filed certain legal documents that control the terms of the securities offered by this prospectus as exhibits to the registration statement. We will file certain other legal documents that control the terms of the securities offered by this prospectus as exhibits to reports we file with the SEC. That registration statement and the other reports can be read at the SEC web site or at the SEC offices mentioned under the heading "Where You Can Find More Information." WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. Our SEC filings are also available at the office of the New York Stock Exchange. For further information on obtaining copies of our public filings at the New York Stock Exchange, you should call (212) 656-5060. We "incorporate by reference" into this prospectus the information we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus and information that we file subsequently with the SEC will automatically update this prospectus. We incorporate by reference the documents listed below and any filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the initial filing of the registration statement that contains this prospectus and prior to the time that we sell all the securities offered by this prospectus: . The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998. . The description of the Common Stock included in the Registration Statement on Form 8-B dated July 2, 1973, including any amendments or reports filed for the purpose of updating such description. . The description of the Company's Preferred Stock Purchase Rights included in the Registration Statement on Form 8-A dated November 5, 1998, as amended. You may request a copy of these filings (other than exhibits, unless that exhibit is specifically incorporated by reference into that filing) at no cost, by writing to or telephoning us at the following address: A. Peter Lawson Secretary, Motorola, Inc. 1303 East Algonquin Road Schaumburg, Illinois 60196 Telephone: (847) 576-5000. You should rely only on the information contained or incorporated by reference in this prospectus or the applicable prospectus supplement. We have not authorized anyone else to provide you with different information. We may only use this prospectus to sell securities if it is accompanied by a prospectus supplement. We are only offering these securities in states where the offer is permitted. You should not assume that the information in this prospectus or the applicable prospectus supplement is accurate as of any date other than the dates on the front of those documents. 2 THE COMPANY Motorola is a global leader in providing integrated communications solutions and embedded electronic solutions. These include: . Software-enhanced wireless telephone, two-way radio, messaging and satellite communications products and systems, as well as networking and Internet-access products, for consumers, network operators, and commercial, government and industrial customers. . Embedded semiconductor solutions for customers in the consumer, networking and computing, transportation, and wireless communications markets. . Embedded electronic systems for automotive, communications, imaging, manufacturing systems, computer and consumer markets. Motorola is a corporation organized under the laws of the State of Delaware as the successor to an Illinois corporation organized in 1928. Motorola's principal executive offices are located at 1303 East Algonquin Road, Schaumburg, Illinois 60196 (telephone number (847) 576-5000). USE OF PROCEEDS Unless the applicable prospectus supplement provides otherwise, the Company will use the net proceeds from the sale of the offered securities for general corporate purposes. RATIOS OF EARNINGS TO FIXED CHARGES The following are the unaudited consolidated ratios of earnings to fixed charges for each of the years in the five-year period ended December 31, 1998:
Year Ended December 31, --------------------------- 1998 1997 1996 1995 1994 ---- ---- ---- ---- ---- Ratio of earnings to fixed charges.................. -- (a) 6.4 6.1 11.6 9.8
- -------- (a) Earnings were inadequate to cover fixed charges by $1.4 billion. For purposes of computing the ratios of earnings to fixed charges, we have divided income before income tax expense plus fixed charges by fixed charges. Fixed charges consist of interest costs and estimated interest included in rentals (one-third of net rental expense). 3 DESCRIPTION OF DEBT SECURITIES The following is a general description of the debt securities that we may offer from time to time. The particular terms of the debt securities offered by any prospectus supplement and the extent, if any, to which the general provisions described below may apply will be described in the applicable prospectus supplement. The debt securities will be either senior debt securities or subordinated debt securities. The "Senior Securities" will be issued under the "Senior Indenture" dated May 1, 1995 between the Company and Harris Trust and Savings Bank ("Harris"), as trustee (or any successor trustee). The "Subordinated Securities" will be issued under a "Subordinated Indenture" between the Company and the trustee named therein (or any successor trustee). The Senior Indenture and the Subordinated Indenture are collectively referred to in this prospectus as the "Indentures," and each of the trustee under the Senior Indenture and the trustee under the Subordinated Indenture are referred to in this prospectus as a "Trustee." The Indentures are included as exhibits to the registration statement and the following description is qualified in its entirety by reference to the provisions of the Indentures and the applicable prospectus supplement. You should read these documents carefully to fully understand the terms of the debt securities. The numerical references in parentheses below are to sections of the Indentures. Unless otherwise indicated, capitalized terms used in the following summary that are defined in the Indentures have the meanings used in the Indentures. As used in this "Description of Debt Securities," the "Company" refers to Motorola, Inc. and does not, unless the context otherwise indicates, include its subsidiaries. General The Senior Securities are unsubordinated obligations of the Company. They will be unsecured and will rank equally with each other and all of our other senior and unsubordinated debt, unless otherwise indicated in the applicable prospectus supplement. (Section 301 of the Senior Indenture.) Each applicable prospectus supplement will set forth, as of the most recent practicable date, the aggregate amount of outstanding debt that would rank junior to the Senior Securities. The Subordinated Securities are subordinated in right of payment to the prior payment in full of the Senior Indebtedness of the Company. See "-- Subordinated Indenture Provisions" below. The Subordinated Securities will be unsecured and will rank equally with each other, unless otherwise indicated in the applicable prospectus supplement. (Section 301 of the Subordinated Indenture.) Each applicable prospectus supplement will set forth, as of the most recent practicable date, the aggregate amount of outstanding debt that would rank senior to the Subordinated Securities. The Indentures do not limit the aggregate principal amount of debt securities that may be issued thereunder and provide that debt securities may be issued thereunder from time to time in one or more series. Terms We will prepare a prospectus supplement for each series of debt securities that we issue. Each prospectus supplement will set forth the applicable terms of the debt securities to which it relates, which may include the following: . the title of the securities; . any limit on the aggregate principal amount of the securities; . the maturity; . the interest rate and the date from which interest will accrue; . the interest payment dates and the record dates for payment of interest, or the discount to face value and accretion rate in the case of debt securities issued at a substantial discount to the principal amount; . the price and date of any optional redemption by the Company; 4 . the obligation, if any, of the Company to redeem the offered securities and any requirement to maintain a "sinking fund" to support such obligation; . the currency or currencies in which the Company will pay principal or interest; . any conversion features; and . whether the defeasance or covenant defeasance provisions of the applicable Indenture apply. The Company can also establish any other terms and conditions of the debt securities to the extent they do not conflict with the terms of the Indentures. (Section 301 of each Indenture.) Therefore, you must read the applicable Indenture and prospectus supplement carefully to understand the terms of any series of debt securities. Effective Subordination The debt securities will be obligations exclusively of the Company. Since the Company's operations are partially conducted through subsidiaries, primarily overseas, the Company's cash flow and therefore its ability to service debt, including the debt securities offered by the applicable prospectus supplement, are partially dependent upon the earnings of its subsidiaries and the distribution of those earnings to, or upon loans or other payments of funds by those subsidiaries to, the Company. The subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts due pursuant to the debt securities or to make any funds available to the Company to repay its obligations, whether by dividends, loans or other payments. In addition, the payment of dividends and the making of loans and advances to the Company by its subsidiaries may be subject to statutory or contractual restrictions, are contingent upon the earnings of those subsidiaries and are subject to various business considerations. Any right of the Company to receive assets of any of its subsidiaries upon their liquidation or reorganization and therefore the right of the holders of the debt securities to participate in those assets will be effectively subordinated to the claims of that subsidiary's creditors, including trade creditors. No Limitations on Other Debt The general provisions of the Indentures do not contain any provisions that would limit the ability of the Company to incur indebtedness or that would afford holders of debt securities protection in the event of a highly leveraged or similar transaction involving the Company. However, the Indentures do restrict the Company and its domestic subsidiaries from granting certain security interests on certain of their property or assets unless the debt securities are equally secured. See "--Restrictive Covenants" below. Open-Ended Indenture The Indentures are "open-ended," meaning the Company may issue a number of different series of debt securities, with different terms and conditions, under each of the Indentures. (Section 301 of each Indenture.) There is no limit on the amount of debt securities the Company can issue under either Indenture, and the Company has already issued a significant amount of debt securities under the Senior Indenture. Defeasance and Covenant Defeasance Under the Indentures, the Company has the ability to take certain steps to effect a "defeasance" or a "covenant defeasance." A "defeasance" allows the Company to be discharged from any and all obligations in respect of a series of debt securities (except for certain obligations to register the transfer or exchange of such debt securities, to replace temporary, destroyed, stolen, lost or mutilated debt securities, to maintain paying 5 agencies and to hold monies for payment in trust). A "covenant defeasance" allows the Company to stop complying with certain restrictive covenants relating to: . consolidation, merger, conveyance, transfer or lease; . maintenance of the Company's existence and properties; . payment of taxes and other claims; and . restrictions on secured debt and sale and leaseback transactions. A "covenant defeasance" also causes certain events specified in the Indentures to no longer be deemed an Event of Default under the Indentures. To effect a "defeasance" or a "covenant defeasance," the Company must deposit with the applicable Trustee an amount of money or U.S. government securities that, through the payment of interest and principal in respect thereof in accordance with their terms, will provide money in an amount sufficient to pay the principal of (and premium, if any) and each installment of interest, if any, on the debt securities of such series at the time such payments are due. The Company will remain liable for any shortfall between the amount deposited with the Trustee and the amount due holders of debt securities upon any acceleration of payment. The Company may only effect a "defeasance" or a "covenant defeasance" if it has provided a legal opinion that such action will not cause holders of such debt securities to recognize income, gain or loss for federal income tax purposes as a result and that holders will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred. Such opinion, in the case of a "defeasance," must refer to and be based upon a ruling of the Internal Revenue Service or a change in applicable Federal income tax law occurring after the date of the applicable Indenture. The applicable prospectus supplement may further describe the provisions, if any, regarding defeasance or covenant defeasance with respect to the debt securities of a particular series. (Article Fifteen of each Indenture.) Restrictive Covenants Restrictions on Secured Debt If the Company or any Domestic Subsidiary incurs or guarantees any Debt secured by a Mortgage on any Principal Property or on any shares of stock or Debt of any Domestic Subsidiary, the Company must secure the debt securities of each series equally and ratably with (or prior to) such secured Debt, unless, after giving effect to such transaction, the aggregate amount of all such Debt so secured, together with all Attributable Debt in respect of sale and leaseback transactions involving Principal Properties (see "--Restrictions on Sales and Leasebacks" below), would not exceed 5% of the Consolidated Net Tangible Assets of the Company and its consolidated subsidiaries. This restriction does not apply to, and there will be excluded from secured Debt in any computation under such restriction, Debt secured by: (a) Mortgages on property of, or on any shares of stock of or Debt of, any corporation existing at the time such corporation becomes a Domestic Subsidiary or at the time it is merged into or consolidated with the Company or a Domestic Subsidiary; (b) Mortgages in favor of the Company or a Domestic Subsidiary; (c) Mortgages in favor of governmental bodies to secure progress or advance payments; (d) Mortgages on property, shares of stock or Debt existing at the time of acquisition thereof (including acquisition through merger or consolidation); 6 (e) purchase money Mortgages and Mortgages to secure the construction cost of property; and (f) any extension, renewal or refunding of any Mortgage referred to in clauses (a) through (e), above. Restrictions on Sales and Leasebacks Neither the Company nor any Domestic Subsidiary may enter into any sale and leaseback transaction involving any Principal Property, completion of construction and commencement of full operation of which has occurred more than 180 days prior thereto, unless (a) the Company or such Domestic Subsidiary could mortgage such property as provided for above under "-- Restrictive Covenants--Restrictions on Secured Debt" in an amount equal to the Attributable Debt with respect to the sale and leaseback transaction without equally and ratably securing the debt securities of each series or (b) the Company, within 120 days, applies to the retirement of its Funded Debt an amount not less than the greater of (i) the net proceeds of the sale of the Principal Property leased pursuant to such arrangement or (ii) the fair market value of the Principal Property so leased (subject to credits for certain voluntary retirements of Funded Debt). This restriction will not apply to any sale and leaseback transaction (a) between the Company and a Domestic Subsidiary or between Domestic Subsidiaries or (b) involving the taking back of a lease for a period, including renewals, of three years or less. (Section 1011 of each Indenture.) Certain Definitions The following are certain key definitions used in the descriptions above of restrictions on secured debt and sales and leasebacks contained in the Indentures. These and other definitions are contained in the Indentures. You should read the applicable Indenture to understand these restrictions fully. "Attributable Debt" means the total net amount of rent required to be paid during the remaining term of any lease, discounted at the rate per annum borne by the Senior Securities of each series, compounded annually. "Consolidated Net Tangible Assets" means the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (a) all current liabilities (excluding any constituting Funded Debt by reason of their being renewable or extendable) and (b) goodwill and other intangibles. (Section 1010 of each Indenture.) "Domestic Subsidiary" means a Subsidiary of the Company except a Subsidiary of the Company which neither transacts any substantial portion of its business nor regularly maintains any substantial portion of its fixed assets within the United States, or which is engaged primarily in financing the operations of the Company or its Subsidiaries, or both, outside the United States. "Principal Property" includes any single parcel of real estate, any manufacturing plant or warehouse owned or leased by the Company or any Domestic Subsidiary which is located within the United States and the gross book value (without deduction of any depreciation reserves) of which on the date as of which the determination is being made exceeds 1% of Consolidated Net Tangible Assets, other than any manufacturing plant or warehouse or a portion thereof (a) which is a pollution control or other facility financed by obligations issued by a state or local government unit or (b) which, in the opinion of the Board of Directors of the Company, is not of material importance to the total business conducted by the Company and its subsidiaries as an entirety. "Subsidiary of the Company" means a corporation, a majority of the outstanding voting stock of which is owned, directly or indirectly, by the Company and/or one or more Subsidiaries of the Company. Events of Default The following are Events of Default under the Indentures with respect to any debt securities: . failure to pay principal of (or premium, if any) on any debt security of that series when due; 7 . failure to pay any installment of interest on any debt security of that series when due, continued for 30 days; . failure to deposit any sinking fund payment, when due, in respect of any debt security of that series; . failure to perform any other covenant of the Company in the applicable Indenture (other than a covenant included in the applicable Indenture solely for the benefit of any series of debt securities other than that series), continued for 60 days after written notice as provided in the applicable Indenture; . certain events in bankruptcy, insolvency or reorganization; and . any other Event of Default provided with respect to debt securities of that series. (Section 501 of each Indenture.) If an Event of Default with respect to the outstanding debt securities of any series occurs and continues either the Trustee or the holders of at least 25% in principal amount of the outstanding debt securities of that series may declare the principal amount of all debt securities of that series to be due and payable immediately; provided that in the case of certain events of bankruptcy, insolvency or reorganization, such principal amount (or portion thereof) will automatically become due and payable. However, at any time after an acceleration with respect to debt securities of any series has occurred, but before a judgment or decree based on such acceleration has been obtained, the holders of a majority in principal amount of the outstanding debt securities of that series may, under certain circumstances, rescind and annul such acceleration. (Section 502 of each Indenture.) For information as to waiver of defaults, see "--Modification and Waiver." You must read the applicable prospectus supplement for a description of the acceleration provisions of any debt securities issued as original issue discount or indexed securities. Subject to the duty of the Trustee during default to act with the required standard of care, the Trustee will be under no obligation to exercise any of its rights or powers under the applicable Indenture at the request or direction of any of the holders, unless such holders have offered the Trustee reasonable security or indemnity. (Section 603 of each Indenture.) Subject to such indemnification and certain other limitations, the holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the debt securities of that series. (Section 512 of the Senior Indenture and Section 505 of the Subordinated Indenture.) The Company will be required to furnish to the Trustee an annual statement as to the performance by the Company of certain of its obligations under the applicable Indenture and as to any default in such performance. (Section 1006 of each Indenture.) Modification and Waiver Modifications and amendments of each Indenture may be made by the Company and the Trustee with the consent of the holders of 66 2/3% in principal amount of the outstanding debt securities of each series affected thereby; provided, however, that no such modification or amendment may, without the consent of the holder of each outstanding debt security affected thereby: . change the stated maturity date of the principal of, or any installment of principal of or interest on, any debt security; . reduce the principal amount of (or premium, if any) or interest, if any, on, any debt security; . reduce the amount of principal of any original issue discount debt security payable upon acceleration of the maturity thereof; 8 . change the place or currency of payment of principal of (or premium, if any) or interest, if any, on, any debt security; . impair the right to institute suit for the enforcement of any payment on or with respect to any debt security; or . reduce the percentage in principal amount of outstanding debt securities of any series, the consent of the holders of which is required for modification or amendment of the Indenture or for waiver of compliance with certain provisions of the applicable Indenture or for waiver of certain defaults. (Section 902 of each Indenture.) The holders of a majority of the outstanding debt securities of any series may on behalf of the holders of all debt securities of that series waive, insofar as that series is concerned, compliance by the Company with certain restrictive provisions of the applicable Indenture. (Section 1012 of each Indenture.) The holders of a majority of the outstanding debt securities of any series may on behalf of the holders of all debt securities of that series waive any past default under the applicable Indenture with respect to debt securities of that series, except a default in the payment of the principal of (or premium, if any) or interest, if any, on any debt security of that series or in respect of any provision which under the applicable Indenture cannot be modified or amended without the consent of the holder of each outstanding debt security of that series affected. (Section 513 of the Senior Indenture and Section 504 of the Subordinated Indenture.) In addition, under the Subordinated Indenture, no modification or amendment thereof may, without the consent of the holders of each outstanding subordinated debt security affected thereby, modify any of the provisions of such Indenture relating to the subordination of the subordinated debt securities in a manner adverse to the holders thereof without the consent of all the holders thereof and no such modification or amendment may adversely affect the rights of the holders of Senior Indebtedness then outstanding under Article Sixteen of such Indenture (described under the caption "-- Subordinated Indenture Provisions") without the consent of the requisite holders of Senior Indebtedness (as required pursuant to the terms of such Senior Indebtedness). (Section 902 of the Subordinated Indenture.) Each Indenture contains provisions for convening meetings of the holders of debt securities of a series issued thereunder if debt securities of that series are issuable in whole or in part as bearer securities. (Section 1401 of each Indenture.) A meeting may be called at any time by the Trustee for such debt securities, or upon the request of the Company or the holders of at least 10% in principal amount of the outstanding debt securities of such series, in any such case upon notice given in accordance with the applicable Indenture. (Section 1402 of each Indenture.) Except for any consent that must be given by each holder of a debt security affected, any resolution presented at a meeting or adjourned meeting at which a quorum is present may be adopted by the affirmative vote of the holders of a majority in principal amount of the outstanding debt securities of that series; provided, however, that, except for any consent that must be given by each holder of a debt security affected, any resolution with respect to any consent which may be given by the holders of not less than 66 2/3% in principal amount of the outstanding debt securities of a series issued under an Indenture may be adopted at a meeting or an adjourned meeting at which a quorum is present only by the affirmative vote of the holders of 66 2/3% in principal amount of such outstanding debt securities of that series; and provided, further, that, except for any consent that must be given by each holder of a debt security affected, any resolution with respect to any demand, consent, waiver or other action which may be made, given or taken by the holders of a specified percentage, which is less than a majority, in principal amount of the outstanding debt securities of a series issued under one of the Indentures may be adopted at a meeting or adjourned meeting at which a quorum is present by the affirmative vote of the holders of such specified percentage in principal amount of the outstanding debt securities of that series. (Section 1404 of each Indenture.) Any resolution passed or decision taken at any meeting of holders of debt securities of any series duly held in accordance with the applicable Indenture with respect thereto will be binding on all holders of debt securities of that series and the related coupons issued under that Indenture. The quorum at any meeting of 9 holders of a series of debt securities called to adopt a resolution, and at any reconvened meeting, will be persons holding or representing a majority in principal amount of the outstanding debt securities of such series; provided, however, that if any action is to be taken at such meeting with respect to a consent which may be given by the holders of not less than 66 2/3% in principal amount of the outstanding debt securities of a series, the persons holding or representing 66 2/3% in principal amount of the outstanding debt securities of such series issued under that Indenture will constitute a quorum. (Section 1404 of each Indenture.) Consolidation, Merger, Conveyance, Transfer or Lease The Company, without the consent of any holders of outstanding debt securities, may consolidate or merge with or into, or transfer or lease its assets substantially as an entirety to, any entity, and any other entity may consolidate or merge with or into, or transfer or lease its assets substantially as an entirety to, the Company, provided that, (i) the entity (if other than the Company) formed by such consolidation or into which the Company is merged or which acquires or leases such assets of the Company is organized and existing under the laws of any United States jurisdiction and assumes the Company's obligations on the debt securities and under the applicable Indenture, (ii) after giving effect to such transaction no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, has happened and is continuing (provided that a transaction will only be deemed to be in violation of this condition (ii) as to any series of debt securities as to which such Event of Default or such event has happened and is continuing) and (iii) certain other conditions are met. (Article Eight of each Indenture.) Form, Denominations, Exchange, Registration and Transfer Debt securities may be issued as registered securities or bearer securities, and may be issued in global form. Global securities are described below under "--Global Securities." Unless otherwise provided in the applicable prospectus supplement, registered securities will be issued in denominations of $1,000 and integral multiples thereof and bearer securities will be issued in denominations of $5,000 and integral multiples thereof. Unless otherwise indicated in the applicable prospectus supplement, bearer securities will have interest coupons attached. (Section 201 of each Indenture.) Registered securities will be exchangeable for other registered securities of the same series. In addition, if a series of debt securities has been issued as both registered securities and bearer securities, subject to certain conditions, holders may exchange bearer securities for registered securities. Registered securities generally may not be exchanged for bearer securities unless the applicable prospectus supplement provides for such an exchange (Section 305 of each Indenture.) We will not mail bearer securities in connection with their original issuance to any location in the United States. In addition, the United States Internal Revenue Code of 1986, as amended (the "Code"), requires us to obtain written certification from the initial purchaser of a bearer security to the effect that: (i) such bearer security is not being acquired by or on behalf of a United States person (as defined under the Code) or (ii) if a beneficial interest in such bearer security is being acquired by or on behalf of a United States person, that such United States person is a foreign branch of a United States financial institution (as defined under the Code) that is purchasing for its own account or for resale or such person is acquiring the bearer security through the foreign branch of a United States financial institution and the financial institution agrees, in either case, to comply with certain requirements of the Code or (iii) such bearer security is being acquired by a United States or foreign financial institution for resale during the restricted period (as defined in the Code) and has not been acquired for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. (Section 303 of each Indenture.) You may present registered securities for registration of transfer at the office of the Trustee, or at the office of any transfer agent designated by the Company without service charge and upon payment of any taxes and other governmental charges. (Section 305 of each Indenture.) The Company may change transfer agents or 10 designate additional transfer agents at any time, except that, if the Company has issued a series of debt securities solely as registered securities, it must maintain a transfer agent in each place of payment for such series and, if the Company has issued a series of debt securities as bearer securities, it must maintain a transfer agent in a place of payment for such series located outside the United States. (Section 1002 of each Indenture.) If the Company elects or is required to redeem or exchange particular debt securities, it will not be required to (i) issue, register the transfer of or exchange such debt securities for a period of 15 days before the first publication or mailing of the notice of redemption or exchange, (ii) register the transfer of or exchange any registered security selected for redemption or (iii) exchange any bearer security selected for redemption except that a bearer security selected for redemption may be exchanged for a registered security that will be surrendered for redemption. (Section 305 of each Indenture.) Global Securities The following will apply to debt securities of any series, unless the prospectus supplement relating to that series provides otherwise. Upon issuance, the debt securities of each series will be represented by one or more "global securities" which will be deposited with, or on behalf of, the depositary and will be registered in the name of the depositary or a nominee of the depositary. Unless otherwise indicated in the prospectus supplement relating to a series of debt securities, The Depositary Trust Company ("DTC") will act as the depositary and the global securities will be deposited with, or on behalf of, DTC or its nominee, and registered securities will be registered in the name of a nominee of DTC. Except under limited circumstances described below, global securities will not be exchangeable for definitive certificated debt securities. Upon the issuance of a global security, DTC will credit on its book-entry registration and transfer system the principal amounts of the individual debt securities represented by such global security to the accounts of persons that have accounts with DTC ("Participants"). Ownership of beneficial interests in a global security will be limited to Participants or persons that may hold interests through Participants. Ownership of beneficial interests in such global security will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC (with respect to interests of Participants) and records of Participants (with respect to interests of persons who hold through Participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to own, pledge or transfer beneficial interest in a global security. So long as the depository is the registered owner of a global security, the depository will be considered the sole owner or holder of the debt securities represented by such global security for all purposes under the applicable Indenture. Except as provided below, owners of beneficial interests in a global security will not be entitled to have any of the individual debt securities registered in their names, will not receive or be entitled to receive physical delivery of any such debt securities in definitive form and will not be considered the owners or holders thereof under the applicable Indenture. Payments of principal of and any interest (and premium, if any) on individual debt securities represented by a global security will be made to DTC or its nominee, as the case may be, as the sole registered owner of such global security and the sole holder of the debt securities represented by the global security for all purposes under the applicable Indenture. Neither the Company nor the Trustee, nor any agent of the Company or the Trustee, will have any responsibility or liability for any aspect of DTC's records relating to or payments made on account of beneficial ownership interests in the global securities representing any debt securities or for maintaining, supervising or reviewing any of DTC's records relating to those beneficial ownership interests. The Company has been advised by DTC that, upon receipt of any payment in respect of a global security, DTC will immediately credit Participants' accounts for their pro rata share of such payments. The Company also expects that payments by Participants to owners of beneficial interests in global securities held through 11 such Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name." These payments will be the sole responsibility of the Participants. Global securities may not be transferred except as a whole by DTC to a nominee of DTC. Global securities representing debt securities are exchangeable for certificated debt securities only if: . DTC or its nominee notifies the Company that it is unwilling or unable to continue as depositary for these global securities; . DTC ceases to be qualified as required by the applicable Indenture; . the Company instructs the Trustee in accordance with the applicable Indenture that those global securities will be so exchangeable; or . there shall have occurred and be continuing an Event of Default or an event which after notice or lapse of time would be an Event of Default with respect to the debt securities represented by such global security. Any global securities that are exchangeable as described above shall be exchangeable for certificated debt securities issuable in denominations of $1,000 (or $5,000 in the case of bearer debt securities) and integral multiples of $1,000 (or $5,000 in the case of bearer debt securities) in excess thereof and registered in such names as DTC shall direct. Subject to the foregoing, global securities are not exchangeable, except for global securities of like denomination to be registered in the name of DTC or its nominee. If debt securities are subsequently issued in registered form, they would thereafter be transferred or exchanged without any service charge at the corporate trust office of the Trustee or at any other office or agency maintained by the Company for such purpose. So long as DTC or its nominee is the registered holder and owner of global securities, DTC or its nominee, as the case may be, will be considered the sole owner or holder of the debt securities represented by the global securities for the purposes of receiving payment on the debt securities, receiving notices and for all other purposes under the applicable Indenture and the debt securities. Except as provided above, owners of beneficial interests in global securities will not be entitled to receive physical delivery of debt securities in definitive form and will not be considered the holders thereof for any purpose under the applicable Indenture. Accordingly, each person owning a beneficial interest in the global securities must rely on the procedures of DTC and, if such person is not a Participant, on the procedures of the Participant through which such person owns its interest, to exercise any rights of a holder under the applicable Indenture. The Indentures provide that DTC may grant proxies and otherwise authorize Participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to give or take under the applicable Indenture. The Company understands that under existing industry practices in the event that the Company requests any action of holders or that an owner of a beneficial interest in global securities desires to give or take any action which a holder is entitled to give or take under the applicable Indenture. DTC would authorize the Participants holding the relevant beneficial interests to give or take such action, and such Participants would authorize beneficial owners owning through such Participants to give or take such action or would otherwise act upon the instructions of beneficial owners through them. DTC has advised the Company as follows: DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds securities that its Participants deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities 12 brokers and dealers, banks, trust companies, clearing corporations and certain other organizations ("Direct Participants"). DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to DTC's system is also available to others, such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly. The rules applicable to DTC and its Participants are on file with the SEC. DTC has further advised the Company that management of DTC is aware that some computer applications, systems and the like for processing data ("Systems") that are dependent upon calendar dates, including dates before, on and after January 1, 2000, may encounter "Year 2000 Problems." DTC has informed its Participants and other members of the financial community (the "Industry") that it has developed and is implementing a program so that its Systems, as the same related to the timely payment of distributions (including principal and income payments) to securityholders, book-entry deliveries and settlement of trades within DTC ("Depositary Services"), continue to function appropriately. This program includes a technical assessment and a remediation plan, each of which is complete. Additionally, DTC's plan includes a testing phase, which is expected to be completed within appropriate time frames. However, DTC's ability to perform properly its service is also dependent upon other parties, including but not limited to issuers and their agents, as well as DTC's Direct Participants and indirect Participants and third party vendors from whom DTC licenses software and hardware, and third party vendors on whom DTC relies for information or the provision of services, including telecommunication and electrical utility services providers, among others. DTC has informed the Industry that it is contacting (and will continue to contact ) third party vendors from whom DTC acquires services to: (i) impress upon them the importance of such services being Year 2000 compliant; and (ii) determine the extent of their efforts for Year 2000 remediation (and, as appropriate, testing) of their services. In addition, DTC is in the process of developing such contingency plans as it deems appropriate. According to DTC, the foregoing information with respect to DTC has been provided to the Industry for informational purposes only and is not intended to serve as a representation, warranty or contract modification of any kind. Payment and Paying Agents Unless the applicable prospectus supplement provides otherwise, the place of payment for all registered securities will be Chicago, Illinois, U.S.A., and the Company will initially designate the corporate trust office of the applicable Trustee for this purpose. At the option of the Company, interest, if any, also may be paid on registered securities (i) by check mailed to the address of the person entitled thereto as such person's address appears in the security register or (ii) by wire transfer to an account located in the United States maintained by the person entitled thereto as specified in the security register. (Sections 307, 1001 and 1002 of each Indenture.) Unless the applicable prospectus supplement provides otherwise, payment of any installment of interest on registered securities will be made to the person in whose name such registered security is registered at the close of business on the record date for such interest. (Section 307 of each Indenture.) If the Company issues bearer securities, it must maintain an office or agency outside the United States at which the principal of (and premium, if any) and interest, if any, on the bearer securities will be paid. (Section 1002 of each Indenture.) The initial locations of such offices and agencies will be specified in the applicable prospectus supplement. Unless the applicable prospectus supplement provides otherwise, payments made with respect to bearer securities will be made, at the holder's option, by (i) check in the currency designated in the bearer security presented or mailed to an address outside the United States or (ii) paid by wire transfer to an account in such currency maintained at a bank located outside the United States. Payments will not be made in the United States. (Sections 307 and 1002 of each Indenture.) Nevertheless, payments made with respect to bearer securities payable in U.S. dollars will be made at the office of the Company's paying agent in Chicago, 13 Illinois if (but only if) payment outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions and the Trustee has received an opinion of counsel that such payment within the United States is legal. (Sections 307 and 1002 of each Indenture.) Unless the applicable prospectus supplement provides otherwise, payment of installments of interest on any bearer securities on or before maturity will be made only against surrender of coupons for such interest installments as they mature. (Section 1001 of each Indenture.) Unless the applicable prospectus supplement provides otherwise, the Company will make all payments of principal of (and premium, if any) and interest, if any, on any debt security that is payable in a currency other than U.S. dollars in U.S. dollars if such currency (i) ceases to be used both by the government of the country that issued the currency and by a central bank or other public institution of or within the international banking community for the settlement of transactions, (ii) is the Euro and ceases to be used both within the European Monetary System and for the settlement of transactions by public institutions of or within the European Communities or (iii) is any currency unit (or composite currency) other than the Euro and ceases to be used for the purposes for which it was established. (Section 312 of each Indenture.) The Company may designate additional offices or agencies for payment with respect to any debt securities, approve a change in the location of any such office or agency and, except as provided above, rescind the designation of any such office or agency. All moneys deposited with a paying agent or held for the payment of principal of (or premium, if any) or interest, if any, on any debt security that remains unclaimed at the end of two years after such payment has become due will, at request of the Company, be repaid to the Company, or discharged from trust, and the holder of such debt security may thereafter look only to the Company for payment thereof. (Section 1003 of each Indenture.) Subordinated Indenture Provisions Subordinated Securities are subordinate and junior in right of payment, to the extent set forth in the Subordinated Indenture, to the prior payment in full of all existing and future Senior Debt of the Company. (Section 1601 of the Subordinated Indenture.) Senior Debt is defined in the Subordinated Indenture as the principal of (and premium, if any) and interest on (including interest accruing after the filing of a petition initiating any proceeding pursuant to any bankruptcy law) and other amounts due on or in connection with any Debt incurred, assumed or guaranteed by the Company, whether outstanding on the date of the Subordinated Indenture or thereafter incurred, assumed or guaranteed, and all renewals, extensions and refundings of any such Debt. Excluded from the definition of Senior Debt are the following: . any debt which expressly provides (i) that such debt is not senior in right of payment to the Subordinated Securities, or (ii) that such debt is subordinated to any other debt of the Company, unless such debt expressly provides that such Debt is senior in right of payment to the Subordinated Securities; . debt of the Company in respect of the Subordinated Securities; . debt of the Company in respect of its outstanding Liquid Yield Option(TM) Notes due 2009 (the "2009 LYONs"(TM)) and its outstanding Liquid Yield Option(TM) Notes due 2013 (the "2013 LYONs"(TM)), which 2009 LYONs and 2013 LYONs rank on a parity with the Subordinated Securities; . debt of the Company in respect of the extension notes which may be issued in the future, at specified dates, in respect of the 2009 LYONs and in payment of the purchase price thereof (which extension notes would rank on a parity with the Subordinated Securities and any 2009 LYONs and 2013 LYONs remaining outstanding). (Section 101 of the Subordinated Indenture.); and - -------- (TM)Trademark of Merrill Lynch & Co. 14 . debt of the Company in respect of the 6.68% Deferrable Interest Junior Subordinated Debentures due March 31, 2039 representing a long-term loan made to the Company by Motorola Capital Trust I, a Delaware statutory business trust and wholly-owned subsidiary of the Company (the "Trust"), and obligations of the Company related to its guarantee of certain obligations of the Trust under its 6.68% Trust Originated Preferred SecuritiesSM. There are no restrictions in the Subordinated Indenture on the creation of additional Senior Debt (or any other indebtedness). (Section 101 of the Subordinated Indenture.) The prospectus supplement with respect to any Subordinated Securities will set forth (a) as of the most recent practicable date (i) the aggregate amount of consolidated indebtedness outstanding that would constitute either Senior Debt or indebtedness of subsidiaries of the Company and (ii) the aggregate amount of outstanding indebtedness that would rank on a parity with the Subordinated Securities and (b) any then-existing limitation on the issuance of additional Senior Debt. By reason of such subordination, in the event of dissolution, insolvency, bankruptcy or other similar proceedings, upon any distribution of assets, (i) the holders of all Senior Debt will first be entitled to receive payment in full of all amounts due or to become due thereon, or payment of such amounts shall have been provided for, before the holders of Subordinated Securities would be entitled to receive any payment or distribution with respect to such securities, (ii) the holders of Subordinated Securities will be required to pay over their share of such distribution to the holders of Senior Debt until such Senior Debt is paid in full and (iii) creditors of the Company who are not holders of Subordinated Securities or holders of Senior Debt may recover less, ratably, than holders of Senior Debt and may recover more, ratably, than the holders of Subordinated Securities. (Section 16.02 of the Subordinated Indenture.) Unless the applicable prospectus supplement provides otherwise, in the event that the Subordinated Securities are declared due and payable prior to their Stated Maturity by reason of the occurrence of an Event of Default, then the Company would be obligated to promptly notify holders of Senior Debt of such acceleration. Unless the applicable prospectus supplement provides otherwise, the Company may not pay the Subordinated Securities until 120 days have passed after such acceleration occurs and may thereafter pay the Subordinated Securities if the terms of the Subordinated Indenture otherwise permit payment at that time. (Section 16.03 of the Subordinated Indenture.) Unless the applicable prospectus supplement provides otherwise, no payment of the principal (and premium, if any) or interest, if any, with respect to any of the Subordinated Securities may be made, except the Subordinated Securities may be acquired for Common Stock or other Capital Stock or as otherwise set forth in the Subordinated Indenture, if any default with respect to Senior Debt occurs and is continuing that permits the acceleration of the maturity thereof and such default is either the subject of judicial proceedings or the Company receives notice of the default, unless (a) 120 days pass after notice of the default is given and such default is not then the subject of judicial proceedings or the default with respect to the Senior Debt is cured or waived and (b) the terms of the Subordinated Indenture otherwise permit the payment or acquisition of the Subordinated Securities at that time. (Section 16.04 of the Subordinated Indenture.) Harris Trust and Savings Bank, as Trustee Harris is trustee under (i) an indenture with the Company dated as of March 15, 1985 relating to the Company's 8.40% Debentures due August 15, 2031, (ii) an indenture with the Company dated as of October 1, 1991 relating to the Company's 7.60% Notes due January 1, 2007 and the Company's 6 1/2% Notes due March 1, 2008, (iii) the Senior Indenture relating to the Company's 5.80% Notes due October 15, 2008, the Company's 7 1/2% Debentures due May 15, 2025, the Company's 6 1/2% Debentures due September 1, 2025, the Company's 6 1/2% Debentures due November 15, 2028 and the Company's 5.22% Debentures due October 1, 2097 and (iv) a subordinated indenture, preferred securities guarantee and declaration of trust with the Company and/or the Trust, all of which are dated as of February 3, 1999, relating to the Company's 6.68% Deferrable Interest Junior Subordinated Debentures due March 31, 2039 and the Trust's 6.68% Trust Originated Preferred SecuritiesSM. Harris has also extended credit facilities to the Company and a subsidiary of the Company and conducts business with the Company and certain of its affiliates, including cash management and stock transfer services. Harris also serves as the Rights Agent under the Rights Agreement. See "Description of Capital Stock--Preferred Stock Purchase Rights." - -------- SM"Trust Originated Preferred Securities" and "TOPrS" are service marks of Merrill Lynch & Co., Inc. 15 DESCRIPTION OF CAPITAL STOCK The following description of the Company's capital stock is subject to the detailed provisions of the Company's restated certificate of incorporation, as amended (the "Certificate of Incorporation"), and bylaws, as amended (the "Bylaws"), and to the Rights Agreement (as defined below). This description does not purport to be complete and is qualified in its entirety by reference to the terms of the Certificate of Incorporation, the Bylaws and the Rights Agreement, which are filed as exhibits to the registration statement. See "Where You Can Find More Information." Common and Preferred Stock The authorized capital stock of the Company consists of 1,400,000,000 shares of Common Stock, par value $3 per share, and 500,000 shares of Preferred Stock, par value $100 per share, issuable in series ("Preferred Stock"). There are no shares of Preferred Stock presently outstanding. The Board of Directors of the Company is authorized to create and issue one or more series of Preferred Stock and to determine the rights and preferences of each series, to the extent permitted by the Certificate of Incorporation. The holders of shares of the Company's Common Stock are entitled to one vote for each share held and each share of the Company's Common Stock is entitled to participate equally in dividends out of funds legally available therefor, as and when declared by the Board of Directors, and in the distribution of assets in the event of liquidation. The shares of the Company's Common Stock have no preemptive or conversion rights, redemption provisions or sinking fund provisions. The outstanding shares of the Company's Common Stock are duly and validly issued, fully paid and nonassessable, and any shares of Common Stock issued in an offering pursuant to this prospectus and any shares of Common Stock issuable upon the (i) exercise of Common Stock Warrants or (ii) conversion or exchange of debt securities which are convertible into or exchangeable for Common Stock, will be duly and validly issued, fully paid and nonassessable. Preferred Stock Purchase Rights On November 5, 1998, Motorola authorized a new rights agreement between the Company and Harris, as Rights Agent (the "Rights Agreement") to replace the existing rights agreement dated as of November 9, 1988, as amended, and the associated rights, which expired as of the close of business on November 20, 1998. The following summary of certain provisions of the Rights Agreement does not purport to be complete and is qualified in its entirety by reference to all of the provisions of the Rights Agreement, including particular provisions or defined terms of the Rights Agreement. See "Where You Can Find More Information." Under the Rights Agreement, each outstanding share of Common Stock of the Company is accompanied by a preferred stock purchase right (a "Right"). Each Right entitles the registered holder to purchase from the Company one ten- thousandth of a share of Junior Participating Preferred Stock, Series B, $100 par value per share, of the Company (the "Preferred Shares") at a price of $200 per one ten-thousandth of a Preferred Share (the "Preferred Share Purchase Price"), subject to adjustment. The Rights attach to shares of Common Stock outstanding as of the close of business on November 20, 1998 and to shares of Common Stock which become outstanding thereafter prior to the earliest of the Distribution Date (as defined below), the redemption of the Rights, the exchange of the Rights and the expiration of the Rights (and, in certain cases, following the Distribution Date). The Rights have certain anti-takeover effects. The Rights may cause substantial dilution to a person or group that attempts to acquire the Company on terms not approved by the Board of Directors, except pursuant to an offer conditioned on a substantial number of Rights being acquired. The Rights should not interfere with any merger or other business combination approved by the Board of Directors because of the ability of the Board of Directors to redeem the Rights. 16 Until the earlier to occur of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") acquired, or obtained the right to acquire, beneficial ownership of 10% or more of the outstanding shares of Common Stock (a "Triggering Event") and (ii) 10 days following the commencement or announcement of a tender offer or exchange offer for 10% or more of such outstanding shares of Common Stock (the earlier of such dates being called the "Distribution Date"), the Rights will be evidenced, with respect to any of the Common Stock certificates outstanding as of November 20, 1998, by such Common Stock certificate. The Rights Agreement provides that, until the Distribution Date, the Rights will be transferred with and only with the shares of Common Stock. Until the Distribution Date (or earlier redemption or expiration of the Rights), new Common Stock certificates issued after November 20, 1998, upon the transfer or new issuance of shares of Common Stock (including, unless the applicable prospectus supplement provides otherwise, the shares of Common Stock issued (i) in an offering pursuant to this prospectus, (ii) upon exercise of any Common Stock Warrants or (iii) upon conversion or exchange of debt securities which are convertible into or exchangeable for Common Stock) will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption or expiration of the Rights) the surrender for transfer of any certificate for shares of Common Stock, outstanding as of November 20, 1998, with or without such notation or a copy of a summary of Rights being attached thereto, will also constitute the transfer of the Rights associated with the shares of Common Stock represented by such certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights ("Right Certificates") will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence the Rights. The Rights are not exercisable until the Distribution Date. The Rights will expire on November 20, 2008, unless earlier redeemed by the Company as described below. The Preferred Share Purchase Price payable, and the number of Preferred Shares or other securities, cash or other property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Common Stock, (ii) upon the grant to holders of the Common Stock of certain rights or warrants to subscribe for Common Stock or convertible securities at less than the current market price of the Common Stock, (iii) upon the distribution to holders of the Common Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends) and (iv) in connection with any recapitalization of the Company. In the event that a person becomes an Acquiring Person, each Right (other than Rights that are or were beneficially owned by the Acquiring Person and certain related persons and transferees, which will thereafter be void) shall thereafter be exercisable not for Preferred Shares, but for a number of shares of Common Stock (or, in certain cases, fractional Preferred Shares, other Common Stock equivalents or cash) having a market value of two times the exercise price of the Right. In the event that, at the time or after a person becomes an Acquiring Person, the Company is involved in a merger or other business combination in which (i) the Company is not the surviving corporation, (ii) Common Stock is changed or exchanged or (iii) 50% or more of the Company's consolidated assets or earning power are sold, then each Right (other than Rights that are or were owned by the Acquiring Person and certain related persons and transferees, which will thereafter be void) shall thereafter be exercisable for a number of shares of common stock of the acquiring company having a market value of two times the exercise price of the Right. In addition, at any time after a Triggering Event and before a person has acquired beneficial ownership of 50% or more of the outstanding Common Stock, the Company may elect to exchange all or part of the Rights (excluding void Rights held by an Acquiring Person and certain related persons and transferees) at an exchange ratio of one share of Common Stock, or one ten-thousandth of a Preferred Share (or other Common Stock equivalent), per Right (subject to adjustment). At any time prior to a Triggering Event, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (the "Rights Redemption Price"). Immediately upon the action of the Board of Directors ordering redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Rights Redemption Price. 17 Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. At any time prior to a Triggering Event, the Company may amend or supplement the Rights Agreement without the approval of the Rights Agent or any holder of the Rights. Thereafter, no amendment may adversely affect the interests of the Rights holders (other than an Acquiring Person). The Preferred Shares purchasable upon exercise of the Rights will not be redeemable. Each Preferred Share will be entitled to a minimum preferential quarterly dividend payment equal to the greater of $250 per share and 10,000 times the dividend declared per share of Common Stock. In the event of liquidation, the holders of the Preferred Shares will be entitled to a minimum preferential liquidation payment equal to the greater of $1,000 per share and 10,000 times the payment made per share of Common Stock. Each Preferred Share will have 10,000 votes per share, voting together with the Common Stock. In the event of any merger, consolidation or other transaction in which Common Stock is exchanged, each Preferred Share will be entitled to receive 10,000 times the amount received per share of Common Stock. Because of the nature of the Preferred Shares' dividend, liquidation and voting rights, the value of the one ten-thousandth interest in a Preferred Share that may be purchased upon exercise of each Right should approximate the value of one share of Common Stock. No fractional shares of Common Stock or Preferred Shares will be required to be issued upon the exercise of a Right (other than fractions of Preferred Shares that are integral multiples of one ten-thousandth of a Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts) and in lieu thereof, an adjustment in cash will be made based on the market price of the Common Stock or Preferred Shares on the last trading day prior to the date of exercise. 18 DESCRIPTION OF SECURITIES WARRANTS We may issue warrants for the purchase of debt securities or common stock, either independently or together with debt securities. Each series of warrants will be issued under a separate warrant agreement between the Company and a bank or trust company, as agent. The warrant agent will act solely as an agent of the Company and will not assume any obligation for any warrant holders. Copies of the forms of warrant agreements and the forms of warrant certificates are filed as exhibits to the registration statement. The following description of certain provisions of the forms of warrant agreements and warrant certificates does not purport to be complete and is qualified in its entirety by reference to all the provisions of the warrant agreements and the warrant certificates. General If we offer warrants for the purchase of debt securities, the applicable prospectus supplement will describe their terms, which may include the following: . the title and aggregate number of such warrants; . the title, rank, aggregate principal amount, denomination, and terms of the underlying debt securities; . the currency of the underlying debt securities or of payment of the exercise price; . whether the warrants are issued as a unit with a debt security, and if so, the number of warrants attached to each such debt security; . the date, if any, on and after which such warrants and any related securities will be transferable separately; . the principal amount of the debt securities purchasable upon exercise of each warrant and the price, or the manner of determining the price, at which such debt securities may be purchased upon exercise; . when such warrants may be exercised and the expiration date; . whether the warrant certificates will be issued in registered or bearer form; . United States federal income tax consequences; . the terms of any right of the Company to redeem or accelerate the exercisability of such warrants; . whether such warrants are to be issued with any other securities; . the offering price; and . any other terms of such warrants. If we offer warrants for the purchase of Common Stock, the applicable prospectus supplement will describe their terms, which may include the following: . the title and aggregate number of such warrants and whether such warrants will be sold with other securities; . the number of shares of Common Stock that may be purchased on exercise of each warrant; . the price or manner of determining the price, the manner in which the exercise price may be paid and any minimum number of warrants exercisable at one time; . the terms of any right of the Company to redeem such warrants; . the date, if any, on and after which such warrants and any related series of debt securities will be transferable separately; 19 . when such warrants may be exercisable and the expiration date; . the terms of any right of the Company to accelerate the exercisability of the warrants; . United States federal income tax consequences; and . any other terms of such warrants. Warrants for the purchase of Common Stock will be offered and exercisable for U.S. dollars only. Warrants may be exchanged for new warrants of different denominations, may (if in registered form) be presented for registration of transfer and may be exercised at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement. No service charge will be made for any permitted transfer or exchange of warrant certificates, but holders must pay any tax or other applicable governmental charge. Prior to the exercise of any warrant to purchase underlying debt securities, holders of such warrants will not have any of the rights of holders of the debt securities purchasable upon such exercise, including the right to receive payments of principal of (or premium, if any) or interest, if any, on the debt securities purchasable upon such exercise or to enforce covenants in the applicable indenture. Prior to the exercise of any warrants to purchase Common Stock, holders of such warrants will not have any rights of holders of the Common Stock purchasable upon such exercise, including the right to receive payments of dividends, if any, on the Common Stock purchasable upon such exercise or to exercise any applicable right to vote. Exercise of Warrants Each warrant will entitle the holder to purchase underlying debt securities or Common Stock, as the case may be, at the exercise price described in, or calculable from, the applicable prospectus supplement. Unexercised warrants will become void after the close of business on the expiration date. Holders can exercise warrants by delivering the exercise price and certain required information to the warrant agent. Warrants will be deemed to have been exercised upon receipt of payment of the exercise price, subject to the receipt, within five business days, of the warrant certificate. Upon receipt of such payment and such warrant certificate properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement, the Company will, as soon as practicable, issue and deliver the underlying debt securities or Common Stock, as the case may be, purchasable upon such exercise. If fewer than all of the warrants represented by a warrant certificate are exercised, the Company will issue a new warrant certificate for the remaining warrants. The holder of a warrant must pay any tax or other governmental charge imposed in connection with the issuance of underlying debt securities or Common Stock purchased upon exercise of a warrant. Modifications The warrant agreements and the terms of the warrants may be modified or amended by the Company and the warrant agent, without the consent of any holder, for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective or inconsistent provision contained therein, or in any other manner that the Company deems necessary or desirable and that will not materially adversely affect the interests of the holders of the warrants. The Company and the warrant agent may also modify or amend the warrant agreement and the terms of the warrants with the consent of a majority of the holders of the then outstanding unexercised warrants affected thereby; provided that no such modification or amendment that accelerates the expiration date, increases the exercise price, reduces the number of outstanding warrants required for consent of any such modification or amendment, or otherwise materially adversely affects the rights of the holders of the warrants, may be made without the consent of each holder affected thereby. 20 Common Stock Warrant Adjustments The terms and conditions on which the exercise price of and/or the number of shares of Common Stock covered by a warrant are subject to adjustment will be set forth in the warrant certificate and the applicable prospectus supplement. Such terms will include provisions for adjusting the exercise price and/or the number of shares of Common Stock covered by such warrant; the events requiring such adjustment; the events upon which the Company may, in lieu of making such adjustment, make proper provisions so that the holder of such warrant, upon exercise thereof, would be treated as if such holder had exercised such warrant prior to the occurrence of such events; and provisions affecting exercise in the event of certain events affecting the Common Stock. 21 PLAN OF DISTRIBUTION We may sell the securities offered pursuant to this prospectus through agents, through underwriters or dealers or directly to one or more purchasers. Underwriters, dealers and agents that participate in the distribution of the securities offered pursuant to this prospectus may be underwriters as defined in the Securities Act of 1933 and any discounts or commissions received by them from us and any profit on the resale of the offered securities by them may be treated as underwriting discounts and commissions under the Securities Act. Any underwriters or agents will be identified and their compensation (including underwriting discount) will be described in the applicable prospectus supplement. The prospectus supplement will also describe other terms of the offering, including any discounts or concessions allowed or reallowed or paid to dealers and any securities exchanges on which the offered securities may be listed. The distribution of the securities offered under this prospectus may occur from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. If the applicable prospectus supplement indicates, we will authorize dealers or our agents to solicit offers by certain institutions to purchase offered securities from us pursuant to contracts that provide for payment and delivery on a future date. We must approve all institutions, but they may include, among others: . commercial and savings banks; . insurance companies; . pension funds; . investment companies; and . educational and charitable institutions. The institutional purchaser's obligations under the contract are only subject to the condition that the purchase of the offered securities at the time of delivery is allowed by the laws that govern the purchaser. The dealers and our agents will not be responsible for the validity or performance of the contracts. We may have agreements with the underwriters, dealers and agents to indemnify them against certain civil liabilities, including liabilities under the Securities Act, or to contribute with respect to payments which the underwriters, dealers or agents may be required to make as a result of those certain civil liabilities. When we issue the securities offered by this prospectus (except for shares of Common Stock), they may be new securities without an established trading market. If we sell a security offered by this prospectus to an underwriter for public offering and sale, the underwriter may make a market for that security, but the underwriter will not be obligated to do so and could discontinue any market making without notice at any time. Therefore, we cannot give any assurances to you concerning the liquidity of any security offered by this prospectus. Underwriters and agents and their affiliates may be customers of, engage in transactions with, or perform services for us or our subsidiaries in the ordinary course of their and/or our businesses. 22 LEGAL MATTERS Certain legal matters will be passed upon for the Company by Carol H. Forsyte of the Company's Law Department and Kirkland & Ellis (a partnership including professional corporations), Chicago, Illinois. As of April 1, 1999, Ms. Forsyte owned approximately 185 shares of Common Stock and held options to purchase 10,600 shares of Common Stock, of which options to purchase 3,000 shares were currently exercisable. EXPERTS The consolidated financial statements and schedules of the Company and its consolidated subsidiaries as of December 31, 1998 and 1997 and for each of the years in the three-year period ended December 31, 1998 have been incorporated by reference in this prospectus and in the registration statement in reliance upon the reports of KPMG LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in auditing and accounting. 23 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution The following is an estimate pursuant to instruction to Item 511 of Regulation S-K, subject to future contingencies, of the expenses to be incurred by the Registrant in connection with the issuance and distribution of the securities being registered: Registration Fee................................................ $278,000 Legal Fees and Expenses......................................... 120,000 Trustee Fees and Expenses....................................... 60,000 Accounting Fees and Expenses.................................... 30,000 Blue Sky and Legal Investment Fees and Expenses................. 60,000 Printing and Engraving Fees..................................... 100,000 Rating Agency Fees.............................................. 100,000 Listing Fees.................................................... 60,000 Miscellaneous................................................... 30,000 -------- Total....................................................... $838,000 ========
Item 15. Indemnification of Directors and Officers Section 145 of the Delaware General Corporation Law contains detailed provisions for indemnification of directors and officers of Delaware corporations against expenses, judgments, fines and settlements in connection with litigation. The Registrant's Restated Certificate of Incorporation and its directors' and officers' liability insurance policy provide for indemnification of its directors and officers against certain liabilities. Reference is made to Section 6 of the Form of Underwriting Agreements filed as Exhibit 1(a) and to Section 8 of the Form of Distribution Agreement filed as Exhibit 1(b) for a description of the contemplated indemnification arrangements. Item 16. Exhibits The following Exhibits are filed as part of this Registration Statement: 1.1 Form of Underwriting Agreement. 1.2 Form of Distribution Agreement (incorporated by reference to Exhibit 1(b) of the Registrant's Registration Statement on Form S- 3 dated October 17, 1994 (File No. 33-56055)). 4.1 Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3(i)(b) to the Registrant's Quarterly Report on Form 10-Q for the quarter ended April 2, 1994 (File No. 1- 7221)). 4.2 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)). 4.3 By-Laws, as amended through February 17, 1999 (incorporated by reference to Exhibit 3.3 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 (File No. 1- 7221)).
II-1 4.4 Rights Agreement, dated as of November 5, 1998 between Motorola, Inc. and Harris Trust and Savings Bank, as Rights Agent (incorporated by reference to Exhibit 1.1 to Registrant's Registration Statement on Form 8-A/A dated March 16, 1999 (File No. 1-7221)). 4.5 Senior Indenture, dated as of May 1, 1995, between Harris Trust and Savings Bank and Motorola, Inc. (incorporated by reference to Exhibit 4(d) of the Registrant's Registration Statement on Form S-3 dated September 25, 1995 (File No. 33-62911)). 4.6 Form of Subordinated Indenture (incorporated by reference to Exhibit 4(e) of the Registrant's Registration Statement on Form S-3 dated October 17, 1994 (File No. 33-56055)). 4.7 Form of Senior Security (incorporated by reference to Exhibit 4(g) of the Registrant's Registration Statement on Form S-3 dated October 17, 1994 (File No. 33-56055)). 4.8 Form of Subordinated Security (incorporated by reference to Exhibit 4(h) of the Registrant's Registration Statement on Form S-3 dated October 17, 1994 (File No. 33-56055)). 4.9 Form of Debt Warrant Agreement (incorporated by reference to Exhibit 4(i) of the Registrant's Registration Statement on Form S-3 dated October 17, 1994 (File No. 33-56055)). 4.10 Form of Common Stock Warrant Agreement (incorporated by reference to Exhibit 4(j) of the Registrant's Registration Statement on Form S-3 dated October 17, 1994 (File No. 33-56055)). 4.11 Form of Common Stock Certificate (incorporated by reference to Exhibit 4(k) of the Registrant's Registration Statement on Form S-3 dated October 17, 1994 (File No. 33-56055)). 4.12 Form of Warrant Certificate for Common Stock (incorporated by reference to Exhibit 4(l) of the Registrant's Registration Statement on Form S-3 dated October 17, 1994 (File No. 33- 56055)). 4.13 Form of Warrant Certificate for debt securities (incorporated by reference to Exhibit 4(m) of the Registrant's Registration Statement on Form S-3 dated October 17, 1994 (File No. 33- 56055)). 5 Opinion and Consent of Carol H. Forsyte, Esq. 8 Form of Opinion re Certain Tax Matters (incorporated by reference to Exhibit 8 of the Registrant's Registration Statement on Form S-3 dated October 17, 1994 (File No. 33-56055)). 12 Statement re: computation of ratio of earnings to fixed charges (incorporated by reference to Exhibit 12 of the Registrant's Registration Statement on Form S-3 dated January 20, 1999 (File No. 333-70827)). 23.1 Consent of Carol H. Forsyte (included as part of Exhibit 5). 23.2 Consent of KPMG LLP. 24 Powers of Attorney (included on signature page). 25.1 Statement of Eligibility of Harris Trust and Savings Bank, as Trustee, on Form T-1 (incorporated by reference to Exhibit 25(a) of the Registrant's Registration Statement on Form S-3 dated October 17, 1994 (File No. 33-56055)).
II-2 Item 17. Undertakings (a) The Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement, notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement, and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) The Registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act ("Act") in accordance with the rules and regulations prescribed by the Securities and Exchange Commission under Section 305(b)(2) of the Act. (d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the Village of Schaumburg and the State of Illinois, on the 9th day of March, 1999. MOTOROLA, INC. /s/ Christopher B. Galvin By: _________________________________ Christopher B. Galvin Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Carl F. Koenemann and Anthony Knapp and each of them, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities to sign any and all amendments (including pre-effective and post-effective amendments) to this Registration Statement and any related Registration Statement filed pursuant to Rule 462(b) or any successor regulation, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. * * * * Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and as of the dates indicated.
Signature Title Date --------- ----- ---- /s/ Christopher B. Galvin Chief Executive Officer and March 4, 1999 ____________________________________ Director Christopher B. Galvin (Principal Executive Officer) /s/ Carl F. Koenemann Executive Vice President and March 4, 1999 ____________________________________ Chief Financial Officer Carl F. Koenemann (Principal Financial Officer) /s/ Anthony Knapp Corporate Vice President and March 9, 1999 ____________________________________ Controller Anthony Knapp (Principal Accounting Officer) /s/ Ronnie C. Chan Director March 9, 1999 ____________________________________ Ronnie C. Chan /s/ H. Laurance Fuller Director March 4, 1999 ____________________________________ H. Laurance Fuller
II-4
Signature Title Date --------- ----- ---- /s/ Robert W. Galvin Director March 3, 1999 ____________________________________ Robert W. Galvin /s/ Robert L. Growney Director March 4, 1999 ____________________________________ Robert L. Growney /s/ Anne P. Jones Director March 9, 1999 ____________________________________ Anne P. Jones /s/ Donald R. Jones Director March 4, 1999 ____________________________________ Donald R. Jones /s/ Judy C. Lewent Director March 3, 1999 ____________________________________ Judy C. Lewent /s/ Walter E. Massey Director March 3, 1999 ____________________________________ Dr. Walter E. Massey /s/ Thomas J. Murrin Director March 6, 1999 ____________________________________ Thomas J. Murrin /s/ Nicholas Negroponte Director March 4, 1999 ____________________________________ Nicholas Negroponte /s/ John E. Pepper, Jr. Director March 3, 1999 ____________________________________ John E. Pepper, Jr. /s/ Samuel C. Scott III Director March 3, 1999 ____________________________________ Samuel C. Scott III /s/ Gary L. Tooker Director March 2, 1999 ____________________________________ Gary L. Tooker /s/ B. Kenneth West Director March 3, 1999 ____________________________________ B. Kenneth West /s/ John A. White Director March 2, 1999 ____________________________________ Dr. John A. White
II-5 EX-1.1 2 FORM OF UNDERWRITING AGREEMENT FORM OF MOTOROLA, INC. (a Delaware corporation) Debt Securities Debt Warrants Common Stock Common Stock Warrants Units UNDERWRITING AGREEMENT ---------------------- ___________, _____ To the Representatives of the several Underwriters named in the respective Terms Agreements hereinafter described Dear Sirs: Motorola, Inc., a Delaware corporation (the "Company"), proposes to issue and sell, at up to an aggregate initial public offering price of $1,000,000,000, or the equivalent thereof in one or more foreign currencies or composite securities, including the euro, in one or more series, its (i) unsecured debt securities (the "Debt Securities") which may be senior (the "Senior Securities") or subordinated (the "Subordinated Securities"), (ii) warrants to purchase the Debt Securities (the "Debt Warrants"), (iii) shares of its common stock, $3 par value per share (the "Common Stock"), and (iv) warrants to purchase Common Stock (the "Common Stock Warrants") in one or more offerings on terms determined at the time of sale. The Debt Securities, Debt Warrants, Common Stock and Common Stock Warrants may be offered separately or as a part of units consisting of one or more such securities (the "Units"; and together with the Debt Securities, Debt Warrants, Common Stock and Common Stock Warrants, the "Offered Securities"). The Debt Securities and the Units containing the Debt Securities (collectively, the "Offered Debt Securities") will be issued under one of several indentures depending upon the particular issuance. The Senior Securities will be issued under an indenture dated as of May 1, 1995 between the Company and Harris Trust and Savings Bank, as Trustee (the "Senior Indenture"). The Subordinated Securities will be issued under an indenture between the Company and a trustee to be named in the Terms Agreement (as defined below) relating to any Subordinated Securities (the "Subordinated Indenture"). The Senior Indenture and Subordinated Indenture are sometimes referred to as the "Indentures." The Debt Warrants, Common Stock Warrants and Units containing either of the foregoing (collectively, the "Warrants") will be issued under one or more warrant agreements (the "Warrant Agreements") between the Company and the Warrant Agent identified in such Warrant Agreement. Each issue of the Offered Debt Securities and Warrants may vary, as applicable, as to the aggregate principal amount, maturity date or dates, interest rate or rates and timing of payments thereof, redemption provisions, conversion provisions, exercise provisions and sinking fund requirements, if any, and any other variable terms which the applicable Indenture or Warrant Agreement, as the case may be, contemplates may be set forth in the Offered Debt Securities and Warrants as issued from time to time. Whenever the Company determines to make an offering of Offered Securities, it will enter into an agreement substantially in the form of Exhibit A hereto (the "Terms Agreement") providing for the sale of such Offered Securities to, and the purchase and offering thereof by, the underwriter or underwriters named therein (the "Underwriters" or "you", which terms shall include the underwriter or underwriters named therein whether acting alone in the sale of the Offered Securities or as members of an underwriting syndicate). The Terms Agreement relating to each offering of the Offered Securities shall specify, where applicable, the principal amount of the Offered Securities to be issued, the name or names of the Underwriters participating in such offering (subject to substitution as provided in Section 9 hereof) and the principal amount of the Offered Securities which each severally agrees to purchase, the name or names of the Underwriters acting as manager or co-managers in connection with such offerings, if any (the "Representatives", which term shall include each Underwriter in the event that there shall be no manager or co-managers), the price at which the Offered Securities are to be purchased by the Underwriters from the Company, the initial public offering price, the date, time and place of delivery and payment, the number of shares to be issued in the case of the issuance of the Common Stock, and, to the extent not otherwise specified in the applicable Indenture or Warrant Agreement in the case of the issuance of the Offered Debt Securities or Warrants, their terms. Each offering of the Offered Securities will be governed by this Agreement, as supplemented by the applicable Terms Agreement, and this Agreement and such Terms Agreement shall inure to the benefit of and be binding upon each Underwriter participating in the offering of such Offered Securities. 2 The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-______) relating to (i) the Offered Securities and (ii) the Common Stock issuable upon conversion or exercise of the Offered Securities in the case of the issuance of Offered Securities convertible into or exercisable for Common Stock, and the offering thereof from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended (the "1933 Act"), and has filed such amendments thereto as may have been required to the date hereof. Such registration statement, as amended, has been declared effective by the Commission, and the Indentures have been qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration statement, as amended, and the prospectus relating to the sale of the Offered Securities by the Company constituting a part thereof, including all documents incorporated therein by reference, as from time to time amended or supplemented pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1933 Act or otherwise, are referred to herein as the "Registration Statement" and the "Prospectus", respectively; provided, however, that a supplement of the Prospectus contemplated by Section 3(a)(ix) hereof (a "Prospectus Supplement") shall be deemed to have supplemented the Prospectus only with respect to the offering of Offered Securities to which such Prospectus Supplement relates. If the Company elects to rely on Rule 434 under the rules and regulations of the 1933 Act (the "1933 Act Regulations"), all references to the Prospectus shall be deemed to include, without limitation, the form of prospectus and the abbreviated term sheet, taken together, provided to the Underwriters by the Company in reliance on Rule 434 of the 1933 Act Regulations (the "Rule 434 Prospectus"). If the Company files a registration statement to register a portion of the Offered Securities and relies on Rule 462(b) of the 1933 Act Regulations for such registration statement to become effective upon filing with the Commission (the "Rule 462 Registration Statement"), then any reference to "Registration Statement" herein shall be deemed to be to both the registration statement referred to above (No. 333- _____) and the Rule 462 Registration Statement, as each such registration statement may be amended pursuant to the 1933 Act. SECTION 1. Representations and Warranties. (a) The Company represents ------------------------------ and warrants to each Underwriter as of the date hereof and as of the date of the applicable Terms Agreement (such latter date being hereinafter referred to as the "Representation Date") as follows: (i) The Registration Statement and the Prospectus, at the time the Registration Statement became effective and as of 3 the applicable Representation Date, complied in all material respects with the 1933 Act and the 1933 Act Regulations. The Registration Statement, at the time the Registration Statement became effective (or, if an amendment to the Registration Statement or an annual report on Form 10-K has been filed by the Company with the Commission subsequent to the effectiveness of the Registration Statement, then at the time of the most recent such filing) did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, at the time the Registration Statement became effective and as of the applicable Representation Date, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter, or on behalf of any Underwriter by the Representatives, expressly for use in the Registration Statement or Prospectus. (ii) The documents incorporated by reference in the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the "1934 Act Regulations"), and, when read together and with the other information in the Prospectus, at the time the Registration Statement and any amendments thereof became or become effective under the 1933 Act and at each Representation Date, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. (iii) The Company and its subsidiaries considered as a whole have not sustained since the date of the latest financial statements included or incorporated by reference in the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth, incorporated by reference or contemplated 4 in the Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated or incorporated therein, there has not been any change in the capital stock (other than upon exercise of outstanding stock options or upon conversion of convertible securities outstanding on the date of the most recent balance sheet included in the Prospectus or pursuant to the Company's employee stock ownership plan or pursuant to the Company's employee stock purchase plans or the Company's employee savings and profit sharing plan), any significant increase in the long-term debt of the Company and its subsidiaries taken as a whole, or any material adverse change, or any development which the Company has reasonable cause to believe will involve a prospective material adverse change, in or affecting the general affairs, management, consolidated financial position, stockholders' equity or results of operations of the Company and its subsidiaries considered as a whole, or, other than the Company's regular quarterly dividend, any dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. (iv) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to conduct its business as described in the Prospectus with only such exceptions as are not material to the business of the Company and its subsidiaries considered as a whole. (v) The authorized capitalization is as set forth or incorporated by reference in the Prospectus and all of the issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. (vi) The execution, delivery and performance of this Agreement, the applicable Terms Agreement, the applicable Indenture in the case of the issuance of the Offered Debt Securities, and the applicable Warrant Agreement in the case of the issuance of the Warrants, and the consummation of the transactions contemplated herein and therein have been duly authorized by all necessary corporate action and will not conflict with or constitute a breach of, or a default under, any material contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Company is a party or by which the Company is bound; nor will 5 such action result in a violation of the provisions of the Company's Restated Certificate of Incorporation or bylaws of the Company, as amended, or any applicable law, rule, regulation, judgment, order or administrative or court decree. (vii) Other than (a) as set forth, incorporated by reference, or contemplated in the Prospectus and (b) litigation incident to the kind of business conducted by the Company and its subsidiaries, which in the case of those items in (b) individually and in the aggregate is not material to the Company and its subsidiaries considered as a whole, there are no legal or governmental proceedings pending to which the Company and its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or its subsidiaries, the Company has reasonable cause to believe would individually or in the aggregate have a material adverse effect on the consolidated financial position, stockholders' equity or results of operations of the Company and its subsidiaries considered as a whole; and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. (viii) No consent, approval or authorization of any court or governmental authority or agency is necessary in connection with the sale of the Offered Securities or the consummation of the other transactions contemplated by this Agreement, the applicable Terms Agreement, the applicable Warrant Agreement in the case of the issuance of the Warrants, or the applicable Indenture in the case of the issuance of the Offered Debt Securities, except as may be required under the 1933 Act or 1933 Act Regulations, the 1934 Act or 1934 Act Regulations, the 1939 Act or state securities laws. (ix) The Company has complied and will comply with the provisions of Florida H.B. 1771, codified as Section 517.075 of the Florida Statutes, 1987, as amended, and all regulations promulgated thereunder relating to issuers doing business in Cuba. (x) The Company has reviewed its operations and the operations of its subsidiaries and has made inquiries of material suppliers, vendors and customers to evaluate the extent to which the business or operations of the Company or any of its subsidiaries may be affected by the Year 2000 Problem. As a result of such review, at the date hereof the 6 Company has no reason to believe, and does not believe, that the Year 2000 Problem, including costs of remediation, will have a material adverse effect on the consolidated financial position, stockholders' equity or results of operations of the Company and its subsidiaries considered as a whole. The Year 2000 Problem shall mean any significant risk that computer hardware or software or embedded microchips used in the receipt, transmission, processing, manipulation, storage, retrieval, retransmission or other utilization of data or in the operation of mechanical or electrical systems of any kind will not, in the case of dates or time periods occurring after December 31, 1999, function at least as effectively as in the case of dates or time periods occurring prior to January 1, 2000. (b) In the event the Offered Securities are Offered Debt Securities, the Company additionally represents and warrants to each Underwriter as of the Representation Date that the Offered Debt Securities to be issued and sold pursuant to this Agreement have been duly authorized, and when issued, authenticated and delivered pursuant to this Agreement, against payment of the consideration set forth in the Terms Agreement, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture under which they are to be issued, which will be substantially in the form included as an exhibit to the Registration Statement; the applicable Indenture has been duly authorized, and when duly executed and delivered by the Company and the applicable Trustee, will constitute a valid and legally binding instrument enforceable against the Company in accordance with its terms subject, as to enforcement, to bankruptcy, insolvency, reorganization or other laws of general applicability relating to or affecting creditors' rights and to general equity principles, and except as enforcement thereof may be limited by (i) requirements that a claim with respect to any Offered Debt Securities denominated other than in U.S. dollars (or a foreign currency or currency unit judgment in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined pursuant to applicable law or (ii) governmental authority to limit, delay or prohibit the making of payments outside the United States; and the Offered Debt Securities and the applicable Indenture conform in all material respects to the descriptions thereof in, or incorporated by reference into, the Prospectus and the applicable Prospectus Supplement. (c) In the event the Offered Securities are convertible into or exercisable for Common Stock, the Company makes the following 7 additional representations and warranties to each Underwriter as of the Representation Date: (i) The shares of Common Stock initially issuable upon conversion or exercise, as the case may be, have been duly authorized and reserved for issuance, and when issued and delivered, pursuant to the terms of the Indenture or Warrant Agreement, as the case may be, will be validly issued, fully paid and non-assessable. (ii) Holders of Offered Securities receiving shares of Common Stock issued upon the conversion or exercise of such Offered Securities, as the case may be, will also be entitled, to the same extent as will all shares of Common Stock issuable at such time otherwise than upon the conversion or exercise of such Offered Securities, to one preferred share purchase right (a "Right") in respect of each share of Common Stock so received; each such Right has been duly authorized, and when issued and delivered in accordance with the terms of the Rights Agreement, dated as of November 5, 1998, between the Company and Harris Trust and Savings Bank, as amended, (the "Rights Agreement"), will have been duly executed, issued and delivered; the Rights Agreement has been duly authorized, executed and delivered by the Company and Harris Trust and Savings Bank and is enforceable against the Company in accordance with its terms, subject, as to enforcement, to general equity principles; and the Rights and the Rights Agreement conform in all material respects to the descriptions thereof included in or incorporated by reference into the Prospectus and the applicable Prospectus Supplement. (iii) The Common Stock conforms in all material respects to the description thereof included in or incorporated by reference into the Prospectus and the applicable Prospectus Supplement and is not subject to preemptive or other similar rights. (d) In the event the Offered Securities are Warrants, the Company additionally represents and warrants to each Underwriter as of the Representation Date that the Warrants to be issued and sold pursuant to this Agreement have been duly authorized, and when issued, authenticated and delivered pursuant to this Agreement, against payment of the consideration set forth in the Terms Agreement, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Warrant Agreement under which they are to be issued, which will be 8 substantially in the form included as an exhibit to the Registration Statement; the applicable Warrant Agreement has been duly authorized, and when duly executed and delivered by the Company and the applicable Warrant Agent, will constitute a valid and legally binding instrument enforceable in accordance with its terms subject, as to enforcement, to bankruptcy, insolvency, reorganization or other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Warrants and the applicable Warrant Agreement conform in all material respects to the descriptions thereof in, or incorporated by reference into, the Prospectus and the applicable Prospectus Supplement. (e) In the event the Offered Securities are shares of Common Stock or Units containing shares of Common Stock, the Company makes the following additional representations and warranties to each Underwriter as of the Representation Date: (i) The Common Stock to be issued and sold pursuant to this Agreement has been duly authorized, and when issued and delivered pursuant to this Agreement, against payment of the consideration set forth in the applicable Terms Agreement, will be validly issued and fully paid and non-assessable. (ii) The Offered Securities will be entitled, to the same extent as all other shares of Common Stock issued or to be issued by the Company, to one Right in respect of each share of Common Stock so received; each such Right has been duly authorized, and when issued and delivered in accordance with the terms of the Rights Agreement will have been duly executed, issued and delivered; the Rights Agreement has been duly authorized, executed and delivered by the Company and Harris Trust and Savings Bank and is enforceable against the Company in accordance with its terms, subject, as to enforcement, to general equity principles; and the Rights and the Rights Agreement conform to the descriptions thereof included in or incorporated by reference into the Prospectus and the applicable Prospectus Supplement. (iii) The Common Stock conforms in all material respects to the description thereof included in or incorporated by reference into the Prospectus and the applicable Prospectus Supplement and is not subject to preemptive or other similar rights. (f) In the event the Offered Securities are Debt Warrants or Units containing Debt Warrants, the Company makes the following 9 additional representations and warranties to each Underwriter as of the Representation Date: (i) The debt securities initially issuable upon the exercise of such Offered Securities, have been duly authorized, and, when issued, will be duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the indenture under which they will be issued. (ii) The debt securities issuable upon exercise of the Debt Warrants conform in all material respects to the description thereof included in or incorporated by reference into the Prospectus and the applicable Prospectus Supplement. (g) In the event the Offered Securities are Warrants or Offered Debt Securities convertible into Common Stock, the Company additionally represents and warrants to each Underwriter as of the Representation Date that upon issuance and delivery of such Warrants or Debt Securities in accordance with (i) this Agreement and the applicable Terms Agreement, and (ii) the applicable Warrant Agreement or Indenture, as the case may be, the Warrants shall be exercisable at the option of the holder thereof for shares of Common Stock or debt securities, as the case may be, in accordance with the terms of the Warrants and the applicable Warrant Agreement, and such Debt Securities shall be convertible at the option of the holder thereof for shares of Common Stock in accordance with the terms of such Debt Securities and the applicable Indenture. (h) Any certificate signed by any officer of the Company and delivered to the Representatives or counsel for the Underwriters in connection with an offering of Offered Securities shall be deemed a representation and warranty by the Company as to the matters covered thereby, to each Underwriter. SECTION 2. Sale and Delivery to the Underwriters; Closing. ---------------------------------------------- (a) The several commitments of the Underwriters to purchase the Offered Securities pursuant to any Terms Agreement shall be deemed to have been made on the basis of the representations and warranties herein contained and shall be subject to the terms and conditions herein set forth. 10 (b) Payment of the purchase price for, and delivery of, any Offered Securities to be purchased by the Underwriters shall be made at the place set forth in the applicable Terms Agreement, or at such other place as shall be agreed upon by the Representatives and the Company, on the third business day (unless postponed in accordance with the provisions of Section 9) following the date of the applicable Terms Agreement, unless the Offered Securities are priced after 4:30 p.m. New York time in which case such payment and delivery will be made on the fourth business day following the date of the applicable Terms Agreement (unless postponed in accordance with the provisions of Section 9), or such other time not later than ten business days after such date as shall be agreed upon by the Representatives and the Company (each such time and date being referred to as a "Closing Time"). Payment shall be made to the Company by certified or official bank check or checks drawn in New York Clearing House funds or similar next day funds payable to the order of the Company, against delivery to the Representatives for the respective accounts of the Underwriters of the Offered Securities to be purchased by them. (c) Certificates for the Offered Securities shall be in such denominations and registered in such names as the Representatives may request in writing at least one business day before the applicable Closing Time. The certificates for the Offered Securities, which may be in temporary form, will be made available for examination and packaging by the Representatives in New York City not later than 3:00 p.m. on the last business day prior to the applicable Closing Time. SECTION 3. Covenants. (a) The Company covenants with each Underwriter as --------- follows: (i) From the date of the applicable Terms Agreement, and for so long as a Prospectus is required to be delivered in connection with the sale of the Offered Securities covered by such Terms Agreement, the Company will notify the Representatives immediately, and confirm the notice in writing, (A) of the effectiveness of any amendment to the Registration Statement, (B) of the mailing or the delivery to the Commission for filing of any supplement to the Prospectus or any document to be filed pursuant to the 1934 Act which will be incorporated by reference into the Registration Statement or Prospectus, (C) of the receipt of any comments from the Commission with respect to the Registration Statement, the Prospectus or any Prospectus Supplement, or the documents incorporated therein, (D) of any request by the Commission for any amendment to the Registration Statement or 11 any amendment or supplement to the Prospectus, or the documents incorporated therein, or for additional information, (E) of the suspension of the qualification of (i) the Offered Securities, or (ii) the shares of Common Stock (including the Rights associated therewith) issuable upon conversion or exercise of the Offered Securities, in the case of the issuance of Offered Securities convertible into or exercisable for Common Stock, for offering or sale in any jurisdiction, or the initiation or threatening of any proceedings for any such purpose, and (F) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of the Prospectus or any preliminary prospectus supplement, or the initiation of any proceedings for any such purpose. The Company will use every reasonable effort to prevent the issuance of any stop order or any order preventing or suspending the use of the Prospectus or any preliminary prospectus supplement or suspending such qualification, and, in the event of the issuance of a stop order or any order preventing or suspending the use of the Prospectus or any preliminary prospectus supplement or suspending such qualification, to obtain the lifting thereof at the earliest possible moment. (ii) From the date of the applicable Terms Agreement, and for so long as a Prospectus is required to be delivered in connection with the sale of the Offered Securities covered by such Terms Agreement, the Company will give the Representatives notice of its intention to file or prepare any amendment to the Registration Statement (including any post-effective amendment) or any amendment or supplement to the Prospectus (including any revised prospectus which the Company proposes for use by you in connection with the offering of the Offered Securities which differs from the prospectus on file with the Commission at the time the Registration Statement became effective, whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations, or any abbreviated term sheet prepared in reliance on Rule 434 of the 1933 Act Regulations) and will furnish them with copies of any such amendment or supplement or other documents proposed to be filed a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or supplement or use any such prospectus to which you or your counsel shall reasonably object. 12 (iii) The Company, during the period when the Prospectus is required to be delivered under the 1933 Act, will file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act. (iv) The Company will deliver to each of the Representatives two copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and, if applicable, documents incorporated by reference into the Prospectus pursuant to Item 12 of Form S-3 under the 1933 Act) and will also deliver to the Representatives, from time to time during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, as many conformed copies of the Registration Statement as originally filed and of each amendment thereto (without exhibits) as the Representatives may reasonably request. (v) Prior to 1:00 p.m., New York City time, on the business day next succeeding the date of the applicable Terms Agreement and from time to time during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, the Company will furnish to the Representatives in New York City such number of copies of the Prospectus (as amended or supplemented) as the Representatives may reasonably request for the purposes contemplated by the 1933 Act or the 1934 Act or the respective applicable rules and regulations of the Commission thereunder. (vi) If at any time when the Prospectus is required by the 1933 Act to be delivered in connection with sales of the Offered Securities any event shall occur as a result of which it is necessary to amend or supplement the Prospectus in order to make the Prospectus not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Company will forthwith amend or supplement the Prospectus (in form and substance satisfactory to your counsel) so that, as so amended or supplemented, the Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time it is delivered to a purchaser, not misleading, and the Company will furnish to the Representatives a reasonable number of copies of such amendment or supplement. 13 (vii) The Company will endeavor, in cooperation with you, to qualify the Offered Securities and, in the case of the issuance of Offered Securities convertible into or exercisable for Common Stock, the shares of Common Stock (including the Rights associated therewith) issuable upon conversion or exercise, as the case may be, for offering and sale under the applicable securities laws of such states and other jurisdictions as the Representatives may designate; provided, however, that the Company shall not be obligated to qualify as a foreign corporation in any jurisdiction in which it is not so qualified or to file a general consent to service of process in any jurisdiction. In each jurisdiction in which the Offered Securities, or in the case of the issuance of Offered Securities convertible into or exercisable for Common Stock, such shares of Common Stock (including the Rights associated therewith), have been so qualified, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for so long as may be required to complete such distribution of such Offered Securities. (viii) With respect to each sale of Offered Securities, the Company agrees that it will make generally available to its security holders as soon as practicable, but not later than 90 days after the close of the period covered thereby, earnings statements (in form complying with the provisions of Rule 158 under the 1933 Act) covering a twelve-month period beginning, in each case, not later than the first day of the Company's fiscal quarter next following the "effective date" (as defined in said Rule 158) of the Registration Statement relating to such Offered Securities. (ix) If the Company elects not to rely on Rule 434 under the 1933 Act Regulations, immediately following the execution of each Terms Agreement, the Company will prepare a Prospectus Supplement setting forth, where applicable, the principal amount or number of shares, as the case may be, of the Offered Securities covered thereby, the name or names of the Underwriters (subject to substitution as provided in Section 9 hereof) and the principal amount or number of shares, as the case may be, of the Offered Securities which each severally has agreed to purchase, the name or names of the Representatives, the price at which the Offered Securities are to be purchased by the Underwriters from the Company, the initial public offering price, the selling concession and reallowance, if any, the other terms of the Offered Securities 14 to the extent not otherwise specified in the applicable Indenture or Warrant Agreement, as the case may be, in the event the Offered Securities are Offered Debt Securities or Warrants, and such other information as the Representatives and the Company deem appropriate in connection with the offering of the Offered Securities. The Company will promptly transmit copies of the Prospectus Supplement to the Commission for filing pursuant to Rule 424 of the 1933 Act Regulations and will furnish to the Underwriters named therein as many copies of the Prospectus and such Prospectus Supplement as the Representatives shall reasonably request. If the Company elects to rely on Rule 434 of the 1933 Act Regulations, immediately following the execution of each Terms Agreement, the Company will (i) prepare an abbreviated term sheet that complies with the requirements of Rule 434 of the 1933 Act Regulations, (ii) provide the Underwriters with copies of the form of the Rule 434 Prospectus in such number as the Underwriters may reasonably request and (iii) file or transmit for filing with the Commission the form of Prospectus complying with Rule 434(c)(2) of the 1933 Act Regulations in accordance with Rule 424(b) of the 1933 Act Regulations by the close of business in New York on the business day immediately succeeding the date of the Terms Agreement. (b) In the event the Offered Securities are Offered Debt Securities, Debt Warrants or Units containing Debt Warrants, the Company additionally covenants with each Underwriter that the Company will not contract to sell or announce or make any offering, sale or other disposition of any debt securities of the Company having a maturity greater than one year during the period beginning from the date of any Terms Agreement and continuing through the later of the termination of trading restrictions with respect to the Offered Securities, as notified to the Company by the Representatives, or the applicable Closing Time except for (i) proposed issues of debt securities with respect to which the Company shall have advised the Representatives in writing prior to the execution hereof and (ii) except for such other debt securities with respect to which the Representatives have given their prior written consent. (c) In the event the Offered Securities are shares of Common Stock, Units containing shares of Common Stock or are convertible into or exercisable for Common Stock, the Company additionally covenants with each Underwriter as follows: (i) The Company will not contract to sell or announce or make any offering, sale or other disposition of any shares of 15 Common Stock or any securities convertible into or exchangeable for shares of Common Stock (collectively, "Common Equity Securities"), nor will the Company sell or grant options, rights or warrants with respect to any Common Equity Securities (except under the Company's stock option and other employee incentive and benefit plans existing on the date of the applicable Terms Agreement, except for sales of Common Equity Securities under currently effective secondary shelf registration statements, except for no more than 2,700,000 shares of Common Stock issued as consideration for acquisitions and except for Common Stock issued upon conversion of outstanding convertible securities) in each case during a period of 90 days after the commencement of the public offering of the Offered Securities referenced in Section 3(c) hereof, except for (a) proposed issues of Common Equity Securities with respect to which the Company shall have advised the Representatives in writing prior to the execution hereof and (b) except for such other Common Equity Securities with respect to which the Representatives have given their prior written consent. (ii) The Company will use its best efforts to effect the listing of (A) Offered Securities that are shares of the Common Stock and (B) shares of the Common Stock issuable upon the conversion or exercise of the Offered Securities, as the case may be, on the New York Stock Exchange (and/or such other exchanges or trading markets on which the Common Stock is then listed or admitted for trading), and to cause such Offered Securities to be registered under the 1934 Act. (iii) In the case of the issuance of Offered Securities convertible into or exercisable for Common Stock, the Company agrees to reserve and keep available at all times, free of preemptive rights, shares of Common Stock for the purpose of enabling the Company to satisfy any obligations to issue shares of Common Stock upon conversion or exercise of the Offered Securities, as the case may be. SECTION 4. Payment of Expenses. The Company will pay all expenses ------------------- incident to the performance of its obligations under this Agreement and each Terms Agreement, including (i) the printing and filing of the Registration Statement as originally filed and of each amendment thereto, (ii) the copying of this Agreement, each Terms Agreement, the Indentures, in the case of the issuance of the Offered Debt Securities, and the Warrant Agreements, in the case of the issuance of the Warrants, (iii) the preparation, issuance and delivery to the Underwriters of the certificates for the Offered 16 Securities, (iv) the fees and disbursements of the Company's counsel and accountants, (v) the qualification of the Offered Securities and, in the case of the issuance of Offered Securities convertible into or exercisable for Common Stock, the shares of Common Stock (including the Rights associated therewith) issuable upon the conversion or exercise of the Offered Securities, as the case may be, under securities laws in accordance with the provisions of Section 3(a)(vii), including filing fees and the fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky survey, (vi) the printing and delivery to the Underwriters of copies of the Registration Statement as originally filed and of each amendment thereto, of any preliminary prospectuses and of the Prospectus and any amendments or supplements (including any preliminary prospectus supplements) thereto, including, if applicable, the abbreviated term sheet delivered by the Company pursuant to Rule 434 of the 1933 Act Regulations, (vii) the copying and delivery to the Underwriters of copies of the Blue Sky survey, (viii) in the case of the issuance of Offered Debt Securities, the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indentures, (ix) in the case of the issuance of Warrants, the fees and expenses of the Warrant Agent, including the fees and disbursements of counsel for the Warrant Agent in connection with the Warrant Agreements, (x) where applicable, any fees payable in connection with the rating of the Offered Securities, (xi) where applicable, the filing fee payable to the National Association of Securities Dealers, Inc. incident to any required review of the terms of the sale of the Offered Securities, (xii) where applicable, the fees and expenses incurred in connection with the listing of the Offered Securities, and in the case of the issuance of Offered Securities convertible into or exercisable for Common Stock, the shares of Common Stock issuable upon the conversion or exercise of the Offered Securities, as the case may be, on the New York Stock Exchange (and/or such other exchanges or trading markets on which the Common Stock is then listed or admitted for trading), and (xiii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. Except as provided in this Section and in Sections 6 and 7, the Underwriters will pay all of their own costs and expenses, including fees and disbursements of their counsel, stock transfer taxes on resale of any of the Offered Securities by them, and any advertising expenses which they may incur. If a Terms Agreement is terminated by the Representatives in accordance with the provisions of Section 5, other than solely as 17 the result of a material adverse change in the financial markets in the United States as provided for in Section 5(f)(iii), the Company shall reimburse you for all out-of-pocket expenses, including the reasonable fees and disbursements of your counsel, reasonably incurred by you in making preparations for the purchase, sale and delivery of the Offered Securities. SECTION 5. Conditions of Underwriter's Obligations. The obligations of --------------------------------------- the Underwriters to purchase the Offered Securities pursuant to any Terms Agreement are subject, in the discretion of the Representatives, to the accuracy of the representations and warranties of the Company herein contained, to the performance by the Company of its obligations hereunder, and to the following further conditions: (a) At the applicable Closing Time, no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission; all requests for additional information on the part of the Commission shall have been complied with to your reasonable satisfaction; and the Prospectus as amended or supplemented in relation to the applicable Offered Securities shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for filing pursuant to the 1933 Act and the 1933 Act Regulations. (b) At the applicable Closing Time, you shall have received the favorable opinion, dated as of the applicable Closing Time, of Carol H. Forsyte, Senior Counsel, of the Law Department of the Company, or another attorney employed by the Company who is acceptable to the Representatives (the "Company Attorney's Opinion") (except in the case of (A) item (1)(vii), where applicable, insofar as it relates to "Certain Tax Aspects", which opinion shall be delivered by a special outside tax counsel to the Company, and (B) items (2) and (6), in each case where applicable, which opinions shall be delivered by Kirkland & Ellis, counsel to the Company, or such other counsel who is acceptable to the Representatives (the "New York Attorney's Opinion")), in form and substance satisfactory to your counsel. (1) The Company Attorney's Opinion shall be to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power 18 and authority to conduct its business as described in the Prospectus. (ii) The authorized capitalization of the Company is as set forth or incorporated by reference in the Prospectus and all of the issued and outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable. (iii) This Agreement and the applicable Terms Agreement have each been duly authorized, executed and delivered by the Company. (iv) A member of the Commission's staff has advised such counsel by telephone that the Commission has entered an order declaring the Registration Statement effective under the 1933 Act and, to the best of such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission. (v) At the time the Registration Statement became effective and at each Representation Date, the Registration Statement and the Prospectus (other than the financial statements and other financial data and supporting schedules included therein and in the documents incorporated by reference into the Prospectus, as to which no opinion need be rendered) appeared on its face to comply as to form in all material respects with the applicable requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations thereunder and, where applicable, the Rule 434 Prospectus conforms to the requirements of Rule 434 of the 1933 Act Regulations in all material respects; the documents incorporated by reference into the Prospectus (other than the financial statements and other financial data and supporting schedules included therein, as to which no opinion need be rendered), when they were filed with the Commission, complied as to form in all material respects with the applicable requirements of the 1934 Act and the 1934 Act Regulations; and to the best of such counsel's knowledge, there are no contracts or other documents required to be described or referred to in the Prospectus or to be filed as exhibits to the Registration Statement other than those described or referred to 19 therein or filed or incorporated by reference thereto and the descriptions thereof or references thereto are correct in all material respects. (vi) To the best of such counsel's knowledge, other than as set forth or incorporated by reference or contemplated in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject, other than litigation incident to the kind of business conducted by the Company and its subsidiaries, which litigation incident to the Company's business individually and in the aggregate is not material to the Company and its subsidiaries considered as a whole; and, to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. (vii) Where applicable, the discussion in the Prospectus or the applicable Prospectus Supplement under "Certain Tax Aspects" (or a similar heading or headings) is a fair and accurate summary of the matters addressed therein, based upon current law and the assumptions stated or referred to therein. (viii) No consent, approval, authorization, order, registration or qualification of any court or governmental authority or agency is required in connection with the issuance and sale of the Offered Securities or the consummation of the other transactions contemplated by this Agreement, the applicable Terms Agreement, the applicable Warrant Agreement in the case of the issuance of the Warrants, or the applicable Indenture in the case of the issuance of the Offered Debt Securities, except such as have been obtained or rendered, as the case may be, or such consents, approvals, authorizations, registrations or qualifications as may be required under the securities or Blue Sky laws of any jurisdiction in connection with the purchase and distribution of the Offered Securities by you or the issuance of shares of Common Stock (including the Rights associated therewith), upon conversion or exercise of the Offered Securities, in the case of the issuance of Offered Securities convertible into or exercisable for Common Stock. 20 (ix) The execution and delivery of this Agreement, the applicable Terms Agreement, the applicable Indenture in the case of the issuance of the Offered Debt Securities, and the applicable Warrant Agreement in the case of the issuance of the Warrants, the issuance of the Offered Securities and the shares of Common Stock (including the Rights associated therewith) issuable upon conversion or exercise of the Offered Securities in the case of the issuance of Offered Securities convertible into or exercisable for Common Stock, the compliance by the Company with all of the provisions of the Offered Securities and the applicable Indenture and Warrant Agreement in the case of the issuance of Offered Debt Securities or Warrants, this Agreement and the applicable Terms Agreement and the consummation of the transactions herein or therein contemplated do not and will not conflict with or constitute a breach of, or a default under, (a) the Company's Restated Certificate of Incorporation or bylaws of the Company, as amended, (b) any indenture, mortgage, loan agreement or note or any material contract, lease or other agreement or instrument, in each case known to such counsel and to which the Company is a party or by which the Company is bound, or (c) any applicable law, rule, regulation, judgment, order or administrative or court decree known to such counsel (except that such counsel need express no opinion in response to this item as to compliance with any disclosure requirements). (2) In the event the Offered Securities are Offered Debt Securities, the New York Attorney's Opinion shall be to the effect that: (i) The applicable Indenture has been duly authorized, executed and delivered by the Company and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms (provided, that such counsel may take customary exceptions to such opinion to cover commonly known limitations on enforceability). (ii) The Offered Debt Securities are in the form established pursuant to the applicable Indenture, have been duly authorized, executed and delivered by the Company, and when issued and delivered by the Company against payment therefor in accordance with the terms of such Indenture, will constitute Debt Securities under the terms of such Indenture, will constitute the valid and 21 binding obligations of the Company, and will be enforceable against the Company in accordance with their terms, and the holders thereof will be entitled to the benefits provided by such Indenture (provided, that such counsel may take customary exceptions to such opinion to cover commonly known limitations on enforceability). (iii) The applicable Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended. (iv) The Offered Debt Securities and the applicable Indenture conform to the descriptions thereof in, or incorporated by reference in, the Prospectus and the applicable Prospectus Supplement. (v) The statements set forth in the Prospectus and the applicable Prospectus Supplement under "Description of Debt Securities" (or a similar heading or headings), insofar as they purport to constitute summaries of certain terms of the Offered Debt Securities and the applicable Indenture are accurate in all material respects. (3) In the event the Offered Securities are convertible into or exercisable for Common Stock, the Company Attorney's Opinion shall additionally be to the effect that: (i) Holders of Offered Securities convertible into or exercisable for Common Stock receiving shares of Common Stock issued upon the conversion or exercise of such Offered Securities, as the case may be, will also be entitled, to the same extent as will all shares of Common Stock issuable at such time otherwise than upon the conversion or exercise of such Offered Securities, to one Right in respect of each share of Common Stock so received; each such Right has been duly authorized, and when issued and delivered in accordance with the terms of the Rights Agreement, will have been duly executed, issued and delivered; the Rights Agreement, as amended, has been duly authorized, executed and delivered by the Company and Harris Trust and Savings Bank and is enforceable against the Company in accordance with its terms, subject, as to enforcement, to general equity principles; and the Rights and the Rights Agreement conform to the descriptions thereof included in or 22 incorporated by reference into the Prospectus and the applicable Prospectus Supplement. (ii) Upon issuance and delivery of Offered Securities convertible into or exercisable for Common Stock in accordance with this Agreement and the applicable Terms Agreement, and the applicable Indenture or Warrant Agreement, as the case may be, such Offered Securities shall be convertible or exercisable at the option of the holder thereof for shares of Common Stock in accordance with the terms of such Offered Securities and the applicable Indenture or Warrant Agreement, as the case may be; and the shares of Common Stock initially issuable upon conversion or exercise of such Offered Securities have been duly authorized and reserved for issuance and, when issued and delivered pursuant to the terms of the applicable Indenture or Warrant Agreement, as the case may be, will be validly issued, fully paid and non-assessable. (iii) The Common Stock conforms to the description thereof in, or incorporated by reference into, the Prospectus and the applicable Prospectus Supplement and is not subject to preemptive or other similar rights; and the information in the Prospectus and the applicable Prospectus Supplement under "Description of Capital Stock" (or a similar heading or headings) to the extent that it constitutes matters of law or legal conclusions, has been reviewed by such counsel and is correct in all material respects. (iv) The shares of Common Stock issuable upon the conversion or exercise of such Offered Securities, as the case may be, have been approved for listing upon notice of issuance on the New York Stock Exchange (and/or such other principal exchanges or trading markets on which the Common Stock is then listed or admitted for trading). (4) In the event the Offered Securities are Warrants, the Company Attorney's Opinion shall additionally be to the effect that: (i) The Warrants to be issued and sold by the Company pursuant to this Agreement and the applicable Terms Agreement have been duly authorized, executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company entitled 23 to the benefits provided by the applicable Warrant Agreement; the Warrants and the applicable Warrant Agreement conform to the descriptions thereof in, or incorporated by reference into, the Prospectus and the applicable Prospectus Supplement; and the information in the Prospectus and the applicable Prospectus Supplement under "Description of Securities Warrants" (or a similar heading or headings) to the extent that it constitutes matters of law or legal conclusions, has been reviewed by such counsel and is correct in all material respects. (ii) The applicable Warrant Agreement has been duly authorized, executed and delivered by the parties thereto and constitutes a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles. (5) In the event the Offered Securities are shares of Common Stock or Units containing shares of Common Stock, the Company Attorney's Opinion shall additionally be to the effect that: (i) The Common Stock conforms to the description thereof in, or incorporated by reference into, the Prospectus and the applicable Prospectus Supplement and is not subject to preemptive or other similar rights; and the information in the Prospectus and the applicable Prospectus Supplement under "Description of Capital Stock" (or a similar heading or headings) to the extent that it constitutes matters of law or legal conclusions, has been reviewed by such counsel and is correct in all material respects. (ii) The Common Stock will be entitled, to the same extent as any other shares of Common Stock issued or to be issued by the Company, to one Right in respect of each share of Common Stock so received; each such Right has been duly authorized, and when issued and delivered in accordance with the terms of the Rights Agreement will have been duly executed, issued and delivered; the Rights Agreement has been duly authorized, executed and delivered by the Company and Harris Trust and Savings Bank and is enforceable against the Company in accordance with its terms, subject, as to enforcement, to general 24 equity principles; and the Rights and the Rights Agreement conform to the descriptions thereof included in or incorporated by reference into the Prospectus. (iii) The Common Stock to be issued and sold pursuant to this Agreement and the applicable Terms Agreement has been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth in the Terms Agreement, will be validly issued and fully paid and non-assessable. (iv) The shares of Common Stock to be issued and sold pursuant to this Agreement and the applicable Terms Agreement have been approved for listing upon notice of issuance on the New York Stock Exchange (and/or such other principal exchanges or trading markets on which the Common Stock is then listed or admitted for trading). (6) In the event the Offered Securities are Debt Warrants or Units containing Debt Warrants, the New York Attorney's Opinion shall be to the effect that: (i) Upon issuance and delivery of Offered Securities exercisable into debt securities, such Offered Securities shall be exercisable at the option of the holder thereof for debt securities in accordance with the terms of such Offered Securities and the applicable Warrant Agreement; and the debt securities initially issuable upon the exercise of such Offered Securities, have been duly authorized, and, when issued, will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the indenture under which they will be issued. (ii) The statements set forth in the applicable Prospectus Supplement describing the debt securities issuable upon exercise of the Debt Warrants, insofar as they purport to constitute summaries of certain terms of the debt securities, are accurate in all material respects. The Company Attorney's Opinion shall additionally state that nothing has come to his or her attention that has caused him or her to believe that the Registration Statement (other than the financial statements, financial data and schedules included 25 therein, as to which such counsel need express no belief), at the time it became effective or at the Representation Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (other than the financial statements, financial data and schedules included therein, as to which such counsel need express no belief), at the Representation Date (unless the term "Prospectus" refers to a prospectus which has been provided to you by the Company for use in connection with the offering of the Offered Securities which differs from the Prospectus on file at the Commission at the Representation Date, in which case at the time it is provided to you for such use) or at Closing Time, included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (c) At the applicable Closing Time, you shall have received the favorable opinion, dated as of the applicable Closing Time, of your counsel, with respect to the matters set forth in (b)(1)(i) (insofar as it relates to the existence and good standing of the Company), (b)(1)(iii) - (v), inclusive (in the case of (v), insofar as it relates to the compliance of the Registration Statement and Prospectus as to form), (b)(2)(i), (b)(2)(ii), (b)(3)(ii), (b)(3)(iii) (insofar as it relates to the description of the Common Stock), (b)(4)(i), (b)(4)(ii), (b)(5)(i) (insofar as it relates to the description of the Common Stock), (b)(5)(iii), (b)(6)(i) and (b)(6)(ii) as well as the last paragraph of subsection (b) of this Section. (d) (i) The Company and its subsidiaries considered as a whole shall have not sustained since the date of the latest financial statements included or incorporated by reference in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth, incorporated by reference or contemplated in the Prospectus, and (ii) since the respective dates as of which information is given in the Registration Statement and the Prospectus there shall not have been any change in the capital stock (other than upon exercise of outstanding stock options or upon conversion of convertible securities outstanding at the date of the most recent balance sheet included in the Prospectus or pursuant to the Company's employee stock ownership plan or pursuant to the Company's employee stock purchase plans or the Company's employee savings and profit sharing plan) or any significant increase in long- term debt of the Company 26 and its subsidiaries considered as a whole or any change, or any development involving a prospective change, in or affecting the general affairs, management, consolidated financial position, stockholders' equity or results of operations of the Company and its subsidiaries considered as a whole, otherwise than as set forth or incorporated by reference or contemplated in the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in your judgment so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Offered Securities on the terms and in the manner contemplated in the Prospectus. (e) On or after the date of the applicable Terms Agreement (i) no downgrading shall have occurred in the rating accorded the Company's debt securities by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities. (f) On or after the date of the applicable Terms Agreement there shall not have occurred any of the following: (i) a suspension or material limitation in trading in the Common Stock or securities generally on the New York Stock Exchange; (ii) a general moratorium on commercial banking activities in New York or Illinois declared by either Federal or state authorities; or (iii) any material adverse change in the financial markets in the United States or the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such event specified in this clause (iii) in your judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Offered Securities on the terms and in the manner contemplated in the Prospectus as amended or supplemented. (g) You shall have received a certificate of the Vice Chairman and Chief Executive Officer, the President or another senior officer acceptable to you of the Company and of the Chief Financial Officer, Controller, Treasurer or Assistant Treasurer of the Company, dated as of the applicable Closing Time, to the effect that (i) the Company and its subsidiaries shall not have sustained any loss or interference with its business of the type specified in Section 5(d)(i) and there shall not have occurred any change of the type specified in Section 5(d)(ii), (ii) there shall not have occurred any downgrading of the type specified in Section 5(e), (iii) the applicable representations and warranties in Section 1 27 are true and correct with the same force and effect as though expressly made at and as of such Closing Time, (iv) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to such Closing Time, and (v) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or threatened by the Commission. (h) At the time of the execution of each Terms Agreement, you shall have received from KPMG LLP a letter dated such date, in form and substance satisfactory to you, to the effect that (i) they are independent public accountants with respect to the Company and its subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations; (ii) it is their opinion that the financial statements and supporting schedules included in or incorporated by reference into the Registration Statement or the Prospectus and covered by their opinions therein comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations; (iii) based upon limited procedures set forth in detail in such letter, nothing has come to their attention which causes them to believe that (A) the unaudited financial statements and supporting schedules of the Company and its subsidiaries included in or incorporated by reference into the Registration Statement or the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations or the 1934 Act and the 1934 Act Regulations, as the case may be, or are not presented in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included in or incorporated by reference into the Registration Statement or the Prospectus or (B) at a specified date not more than three days prior to the date of the applicable Terms Agreement, there has been any change in the capital stock of the Company (other than upon exercise of outstanding stock options or upon conversion of convertible securities outstanding on the date of the most recent balance sheet included in or incorporated by reference into the Prospectus or pursuant to the Company's employee stock ownership plan or pursuant to the Company's stock purchase plans or the Company's employee savings and profit sharing plan) or any increase in the consolidated long term debt of the Company and its subsidiaries or any decrease in consolidated net current assets or net assets as compared with the amounts shown in the most recent balance sheet included in or incorporated by reference into the Prospectus or, during the period from the date of the most recent financial statements included in or incorporated by reference into the Prospectus to a specified date not more than three days prior 28 to the date of such Terms Agreement, there were any decreases, as compared with the corresponding period in the preceding year, in consolidated net sales, net earnings or net earnings per share of the Company and its subsidiaries, except in all instances for changes, increases or decreases which the Registration Statement and the Prospectus disclose have occurred or may occur; and (iv) in addition to the examination referred to in their opinions and the limited procedures referred to in clause (iii) above, they have carried out certain specified procedures, not constituting an audit, with respect to certain amounts, percentages and financial information which are included in or incorporated by reference into the Registration Statement and Prospectus and which are reasonably specified by you, and have found such amounts, percentages and financial information to be in agreement with the relevant accounting, financial and other records of the Company and its subsidiaries identified in such letter. (i) At each Closing Time, your counsel shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Offered Securities, as contemplated herein, and related proceedings, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Offered Securities and debt securities or shares of Common Stock (including the Rights associated therewith) issuable upon conversion or exercise of the Offered Securities, in the case of the issuance of Offered Securities convertible into Common Stock or exercisable for Common Stock or debt securities, as the case may be, as herein contemplated, shall be satisfactory in form and substance to you and your counsel. (j) In the case of the issuance of shares of Common Stock, Units containing shares of Common Stock or Offered Securities convertible into or exercisable for Common Stock, at each Closing Time, you shall have received the written agreement of each of the persons specified in the applicable Terms Agreement, if any, to the effect that each such person will not contract to sell or announce or make any offering, sale or other disposition of any shares of Common Stock, nor sell or grant any options, rights or warrants with respect to any shares of Common Stock, in each case during a period of 90 days after the commencement of the public offering of the Offered Securities, without your prior written consent. (k) The Company shall have complied with the provisions of Section 3(a)(v) hereof. 29 If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement and the applicable Terms Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to the applicable Closing Time, and such termination shall be without liability of any party to any other party except as provided in Section 4. SECTION 6. Indemnification. (a) The Company agrees to indemnify and hold --------------- harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or the Prospectus (or any amendment or supplement, including any preliminary prospectus supplement, thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever, as incurred (including, subject to Section 6(c) hereof, the fees and disbursements of counsel chosen by you), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to 30 the extent that any such expense is not paid under (i) or (ii) above; provided, however, that this indemnity agreement does not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto) or any preliminary prospectus or the Prospectus (or any amendment or supplement, including any preliminary prospectus supplement, thereto); and further provided that this indemnity agreement does not apply to any loss, liability, claim, damage or expense arising out of any untrue statement or omission or alleged untrue statement or omission made in a preliminary prospectus or preliminary prospectus supplement, as the case may be, but eliminated or remedied in the Prospectus if a copy of the Prospectus (excluding documents incorporated therein by reference) was not delivered by you to the person asserting the claim arising from such untrue statement or omission or such alleged untrue statement or omission, at or prior to the time required by the 1933 Act. (b) Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of the Company's officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or any preliminary prospectus or the Prospectus (or any amendment or supplement, including any preliminary prospectus supplement, thereto) in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement, including any preliminary prospectus supplement, thereto). (c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability which it may have otherwise than on account of this indemnity agreement. In 31 case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. SECTION 7. Contribution. In order to provide for just and equitable ------------ contribution in circumstances in which the indemnity agreement provided for in Section 6 is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, the Company and you shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and you, as incurred, in such proportions that you are responsible for that portion represented by the percentage that the underwriting discount appearing on the cover page of the Prospectus bears to the initial public offering price appearing thereon and the Company is responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each person, if any, who controls you within the meaning of Section 15 of the 1933 Act shall have the same right to contribution as you, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as the Company. SECTION 8. Representations, Warranties and Agreements to Survive Delivery. -------------------------------------------------------------- All representations, warranties and agreements contained in this Agreement and the applicable Terms Agreement, or 32 contained in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person, or by or on behalf of the Company, and shall survive delivery of the Offered Securities to the Underwriters. SECTION 9. Default. If one or more of the Underwriters shall fail at the ------- applicable Closing Time to purchase the Offered Securities which it or they are obligated to purchase under the applicable Terms Agreement (the "Defaulted Securities"), then the Representative shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth. If, however, during such 24 hours the Representatives shall not have completed such arrangements for the purchase of all of the Defaulted Securities, then: (a) if the aggregate initial public offering price of the Defaulted Securities does not exceed 10% of the aggregate initial public offering price of the Offered Securities to be purchased pursuant to such Terms Agreement, the non-defaulting Underwriters shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting obligations under the applicable Terms Agreement (including this Agreement as incorporated by reference therein) bear to the underwriting obligations of all such non-defaulting Underwriters; or (b) if the aggregate initial public offering price of the Defaulted Securities exceeds 10% of the aggregate initial public offering price of the Offered Securities to be purchased pursuant to such Terms Agreement, such Terms Agreement (including this Agreement as incorporated by reference therein) shall terminate, without any liability on the part of any non- defaulting Underwriter or the Company. No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under the applicable Terms Agreement or this Agreement. In the event of a default by any Underwriter or Underwriters as set forth in this Section, either the Representatives or the Company shall have the right to postpone the applicable Closing 33 Time for a period not exceeding seven days in order that any required changes in the Registration Statement, Prospectus or applicable Prospectus Supplement, or in any other documents or arrangements, may be effected. SECTION 10. Notices. All notices and other communications hereunder shall ------- be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to you as provided in the applicable Terms Agreement; notices to the Company shall be directed to it at 1303 East Algonquin Road, Schaumburg, Illinois 60196; Attention: Treasurer. SECTION 11. Parties. This Agreement and the applicable Terms Agreement ------- shall each inure to the benefit of and be binding upon you, the Company and your and the Company's respective successors. Nothing expressed or mentioned in this Agreement or the applicable Terms Agreement is intended or shall be construed to give any person, firm or corporation, other than you, the Company and your and the Company's respective successors and the controlling persons and officers and directors referred to in Sections 6, 7 and 8 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or the applicable Terms Agreement or any provision herein or therein contained. This Agreement and the applicable Terms Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of you, the Company and your and the Company's respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of the Offered Securities from you shall be deemed to be a successor by reason merely of such purchase. SECTION 12. Governing Law and Time. This Agreement and each Terms ---------------------- Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said State. Specified times of day refer to New York City time. 34 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between you and the Company in accordance with its terms. Very truly yours, MOTOROLA, INC. By ______________________________ Title: _________________________ CONFIRMED AND ACCEPTED, as of the date first above written: By: By ______________________________ Title: Exhibit A-1 MOTOROLA, INC. Debt Securities TERMS AGREEMENT --------------- _____________, ____ To: Motorola, Inc. 1303 East Algonquin Road Schaumburg, Illinois 60196 Attention: Treasurer Dear Sirs: We understand that Motorola, Inc., a Delaware corporation (the "Company"), proposes to issue and sell $___________ aggregate principal amount of its Debt Securities. Subject to the terms and conditions set forth herein or incorporated by reference herein, the underwriter(s) named below (the "Underwriter(s)") hereby offer(s) to purchase such Offered Securities. The Offered Securities to be purchased by the Underwriter(s), which are to be issued under an Indenture dated as of ___________, 199_ between the Company and ________________________________, as Trustee, shall have the following terms: Title: Rank/Subordination: Date of Maturity: Interest Rate: Interest Payment Dates: Date From Which Interest Accrues: Public Offering Price: Purchase Price: Redemption Provisions: Conversion Provisions: A-1-1 Sinking Fund Provisions: Closing Date, Time and Location: Manager or Co-Managers: Current Ratings: Moody's Investors Services - __; Standard & Poor's Corporation - __. All of the provisions contained in the Underwriting Agreement dated as of ______________, ____, a copy of which is attached hereto as Annex A, are herein incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein. Terms defined in such document are used herein as therein defined. Each Underwriter severally agrees, subject to the terms and provisions of this Terms Agreement, including the terms and provisions incorporated by reference herein, to purchase from the Company the principal amount of the Offered Securities set forth opposite its name. PRINCIPAL NAME AMOUNT ---- --------- Any notice by the Company to the Underwriter(s) pursuant to this Terms Agreement shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication addressed to: _______________________; Attention: __________. Please accept this offer by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us. [Manager] By:____________________________ Accepted: Motorola, Inc. By:____________________________ A-1-2 Exhibit A-2 MOTOROLA, INC. _______ Shares Common Stock ($3 Par Value Per Share) TERMS AGREEMENT --------------- _____________, 199_ To: Motorola, Inc. 1303 East Algonquin Road Schaumburg, Illinois 60196 Attention: Treasurer Dear Sirs: We understand that Motorola, Inc., a Delaware corporation (the "Company"), proposes to issue and sell ___________ shares of its common stock, $3 par value per share (the "Common Stock"). Subject to the terms and conditions set forth herein or incorporated by reference herein, the underwriter(s) named below (the "Underwriter(s)") hereby offer(s) to purchase such Offered Securities. The Offered Securities to be purchased by the Underwriter(s) shall have the following terms: 1. The initial public offering price per share for the Common Stock shall be $_____________. 2. The purchase price per share for the Common Stock to be paid by you shall be $__________, being an amount equal to the initial public offering price set forth above less $__________ per share. 3. Closing Date, Time and Location: 4. Manager or Co-Managers: 5. Names of Persons specified pursuant to Section 5(j): A-2-1 All of the provisions contained in the Underwriting Agreement dated as of ______________, ____, a copy of which is attached hereto as Annex A, are herein incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein. Terms defined in such document are used herein as therein defined. Each Underwriter severally agrees, subject to the terms and provisions of this Terms Agreement, including the terms and provisions incorporated by reference herein, to purchase from the Company the number of shares of Common Stock set forth opposite its name. NUMBER OF NAME SHARES ---- --------- Any notice by the Company to the Underwriter(s) pursuant to this Terms Agreement shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication addressed to: _______________________; Attention: __________. Please accept this offer by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us. [Manager] By:____________________________ Accepted: Motorola, Inc. By:____________________________ A-2-2 Exhibit A-3 MOTOROLA, INC. Warrants TERMS AGREEMENT --------------- _____________, ____ To: Motorola, Inc. 1303 East Algonquin Road Schaumburg, Illinois 60196 Attention: Treasurer Dear Sirs: We understand that Motorola, Inc., a Delaware corporation (the "Company"), proposes to issue and sell $___________ aggregate principal amount of its Warrants. Subject to the terms and conditions set forth herein or incorporated by reference herein, the underwriter(s) named below (the "Underwriter(s)") hereby offer(s) to purchase such Offered Securities. The Offered Securities to be purchased by the Underwriter(s), which are to be issued under a Warrant Agreement dated as of _____________, ____ between the Company and _______________________ as Warrant Agent shall have the following terms: Title of Warrants: Stated Value per Warrant: Number of Warrants: Liquidation Value: Initial Offering Price to Public: [$ per Warrant][Formula] Purchase Price by Underwriters: [$ per Warrant][Formula] Commission Payable to Underwriters: A-3-1 [$ per Warrant] Exercise Price: Exercise Provisions: [The Warrants may be exercised in whole or in part at the option of the Holder, on or after ________________, at the following [price or formula] for the purchase of [such principal amount] of: [Debt Securities] [Common Stock] [Other exercise provisions:] [Other terms and conditions:] Expiration Date: Date of Board or Committee Resolution Establishing the Terms and Conditions of the Designated Warrants: Other Terms: Closing Date, Time and Location: Manager or Co-Managers: [Names of Persons specified pursuant to Section 5(j):] All of the provisions contained in the Underwriting Agreement dated as of ______________, ____, a copy of which is attached hereto as Annex A, are herein incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein. Terms defined in such document are used herein as therein defined. Each Underwriter severally agrees, subject to the terms and provisions of this Terms Agreement, including the terms and provisions incorporated by reference herein, to purchase from the Company the number or Warrants set forth opposite its name. A-3-2 NUMBER OF NAME WARRANTS ---- --------- Any notice by the Company to the Underwriter(s) pursuant to this Terms Agreement shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication addressed to: _______________________; Attention: __________. Please accept this offer by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us. [Manager] By:____________________________ Accepted: Motorola, Inc. By:____________________________ A-4-1 EX-5 3 OPINION AND CONSENT OF CAROL H. FORSYTE, ESQ. [MOTOROLA LETTERHEAD] April 9, 1999 Motorola, Inc. 1303 E. Algonquin Road Schaumburg, IL 60196 Ladies and Gentlemen: I am Senior Corporate Counsel in the Law Department of Motorola, Inc., a Delaware corporation (the "Corporation"), and, as such, I have acted as counsel for the Corporation in the preparation of a Registration Statement on Form S-3 (the "Registration Statement") being filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), on the date hereof in connection with the proposed offer and sale of the following securities (collectively, the "Securities") of the Corporation having an aggregate initial offering price of up to $1,000,000,000: (i) senior debt securities generally in the form incorporated by reference as Exhibit 4.7 to the Registration Statement, with appropriate insertions (the "Senior Debt Securities"); (ii) subordinated debt securities generally in the form incorporated by reference as Exhibit 4.8 to the Registration Statement, with appropriate insertions (the "Subordinated Debt Securities," and together with the Senior Debt Securities, the "Debt Securities"); (iii) common stock, par value $3 per share (the "Common Stock"), of the Corporation; and (iv) warrants to purchase Debt Securities or Common Stock (collectively, the "Warrants"). The Securities may be offered separately or as part of units with other Securities, in separate series, in amounts, at prices, and on terms to be set forth in the prospectus and one or more supplements to the prospectus (collectively, the "Prospectus") constituting a part of the Registration Statement, and in the Registration Statement. The Senior Debt Securities are to be issued under one or more indentures generally in the form incorporated by reference as Exhibit 4.5 to the Registration Statement, (the "Senior Indenture"). The Subordinated Debt Securities are to be issued under one or more indentures generally in the Motorola, Inc. April 9, 1999 Page 2 form incorporated by reference as Exhibit 4.6 to the Registration Statement with appropriate insertions (the "Subordinated Indentures"), to be entered into by the Corporation and a trustee or trustees to be named by the Corporation. The Warrants are to be issued under warrant agreements generally in the forms incorporated by reference as Exhibits 4.9 and 4.10 to the Registration Statement, with appropriate insertions (the "Warrant Agreements"), to be entered into by the Corporation and warrant agents to be named by the Corporation. Certain terms of the Securities to be issued by the Corporation from time to time will be approved by the Board of Directors of the Corporation or a committee thereof or certain authorized officers of the Corporation as part of the corporate action taken and to be taken (the "Corporate Proceedings") in connection with issuance of the Securities. I have examined or am otherwise familiar with the Restated Certificate of Incorporation, as amended, of the Corporation, the Bylaws of the Corporation, as amended, the Registration Statement, such of the Corporate Proceedings as have occurred as of the date hereof, and such other documents, records and instruments as I have deemed necessary or appropriate for the purposes of this opinion. Based on the foregoing, I am of the opinion that: (i) the Common Stock, when authorized and sold as contemplated in the Registration Statement, will be validly issued by the Corporation and will be duly authorized, fully paid and non-assessable; and (ii) the Debt Securities and the Warrants, when authorized and sold as contemplated in the Registration Statement, will be validly issued by the Corporation and will constitute valid and legally binding obligations of the Corporation, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity. The foregoing opinions assume that (i) the consideration designated in the applicable Corporate Proceedings for any Common Stock shall have been received by the Corporation in accordance with applicable law; (ii) the applicable Indenture and any Warrant Agreement shall have been duly authorized, executed and delivered by all parties thereto other than the Corporation; (iii) the Registration Statement shall have become effective under the Securities Act; and (iv) the applicable Indenture shall have become duly qualified under the Trust Indenture Act of 1939, as amended. Motorola, Inc. April 9, 1999 Page 3 I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to being named in the Prospectus included therein under the caption "Legal Opinions" with respect to the matters stated therein. Very truly yours, /s/ Carol H. Forsyte -------------------- Carol H. Forsyte Senior Corporate Counsel Law Department EX-23.(2) 4 CONSENT OF KPMG LLP Exhibit 23.2 CONSENT OF INDEPENDENT AUDITORS The Board of Directors Motorola, Inc.: We consent to incorporation by reference in the registration statement on Form S-3 of Motorola, Inc. of our reports dated January 13, 1999, except as to Note 8, which is as of March 1, 1999, relating to the consolidated balance sheets of Motorola, Inc. and subsidiaries as of December 31, 1998 and 1997, 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, 1998, 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, 1998. Chicago, Illinois April 8, 1999 -----END PRIVACY-ENHANCED MESSAGE-----