-----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, KhGMuH1sGtqOgspGfh76dNziU7gV9jUN+na+j4vbJ0R83oOd6Sui3QQGCwF63Rm1 s5CACaRmNKNKsuzjipGF/Q== 0001047469-03-001101.txt : 20030114 0001047469-03-001101.hdr.sgml : 20030114 20030113080637 ACCESSION NUMBER: 0001047469-03-001101 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20030113 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NEXT LEVEL COMMUNICATIONS INC CENTRAL INDEX KEY: 0001093802 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 943342408 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-57193 FILM NUMBER: 03511540 BUSINESS ADDRESS: STREET 1: 6085 STATE FARM DRIVE CITY: ROHNERT PARK STATE: CA ZIP: 94928 BUSINESS PHONE: 7875846820 MAIL ADDRESS: STREET 1: 6085 STATE FARM DRIVE CITY: ROHNERT PARK STATE: CA ZIP: 94928 FILED BY: 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: SC 13D/A BUSINESS ADDRESS: STREET 1: 1303 E ALGONQUIN RD CITY: SCHAUMBURG STATE: IL ZIP: 60196 BUSINESS PHONE: 8475765000 MAIL ADDRESS: STREET 1: 1303 EAST ALGONQUIN ROAD CITY: SCHAUMBURG STATE: IL ZIP: 60196 FORMER COMPANY: FORMER CONFORMED NAME: MOTOROLA DELAWARE INC DATE OF NAME CHANGE: 19760414 SC 13D/A 1 a2100669zsc13da.htm SC 13D/A
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


SCHEDULE 13D/A

Under the Securities Exchange Act of 1934
(Amendment No. 7)
*


NEXT LEVEL COMMUNICATIONS, INC.
(Name of Issuer)

Common Stock, par value $0.01 per share
(Title of Class of Securities)

65333U 10 4
(CUSIP Number)


Michelle M. Warner
Motorola, Inc.
1303 East Algonquin Road, Schaumburg, IL 60196
(847) 576-5000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)


January 12, 2003
(Date of Event Which Requires Filing of This Statement)

        If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box.    o

        Note:    Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent.

(Continued on the following pages)
(Page 1 of 8 pages)


*
The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

    The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No. 65333U 10 4   13D    


1.

 

Name of Reporting Persons.
Motorola, Inc.
I.R.S. Identification Nos. of above persons (entities only).


2.

 

Check the Appropriate Box if a Member of a Group. (See Instructions)
    (a)    o

 

 

(b)    o


3.

 

SEC Use Only.


4.

 

Source of Funds (See Instructions).


5.

 

Check Box If Disclosure Of Legal Proceedings Is Required Pursuant to Items 2(d) Or 2(e).                                                                                                                                                                       o


6.

 

Citizenship or Place of Organization.
Delaware

Number
of
Shares
Beneficially
Owned
  7.   Sole Voting Power.
196,008,238 (Includes 40,186,630 shares of common stock which are subject to warrants currently exercisable within 60 days, 13,824,884 shares of common stock subject to Series A Convertible Preferred Stock, 51,387,000 shares of common stock subject to Series A-1 Convertible Preferred Stock, and 26,506,000 shares of common stock subject to Series A-2 Convertible Preferred Stock.)
   
By
Each
  8.   Shared Voting Power.
        0
   
Reporting
Person
With
  9.   Sole Dispositive Power.
196,008,238 (Includes 40,186,630 shares of common stock which are subject to warrants currently exercisable within 60 days, 13,824,884 shares of common stock subject to Series A Convertible Preferred Stock, 51,387,000 shares of common stock subject to Series A-1 Convertible Preferred Stock, and 26,506,000 shares of common stock subject to Series A-2 Convertible Preferred Stock.)
   
    10.   Shared Dispositive Power.
        0

11.   Aggregate Amount Beneficially Owned By Each Reporting Person.
196,008,238 (Includes 40,186,630 shares of common stock which are subject to warrants currently exercisable within 60 days, 13,824,884 shares of common stock subject to Series A Convertible Preferred Stock, 51,387,000 shares of common stock subject to Series A-1 Convertible Preferred Stock, and 26,506,000 shares of common stock subject to Series A-2 Convertible Preferred Stock.)


12.

 

Check Box If The Aggregate Amount In Row (11) Excludes Certain Shares (See Instructions)    o


13.

 

Percent Of Class Represented By Amount In Row (11)
        89.67%


14.

 

Type Of Reporting Person (See Instructions)
        CO



Item 1. Security and Issuer.

        This Amendment No. 7 to Schedule 13D, relates to the Common Stock, par value $0.01 per share (the "Shares"), of Next Level Communications, Inc., a Delaware corporation ("Next Level") and amends and supplements all information contained in the initial statement on Schedule 13D (the "Initial Statement") filed on January 14, 2000, as amended by Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5 and Amendment No. 6 filed on June 15, 2001, March 6, 2002, April 30, 2002, July 3, 2002, October 7, 2002 and December 20, 2002, respectively, by Motorola, Inc., a Delaware corporation ("Motorola").

        Next Level's principal executive offices are at 6085 State Farm Drive, Rohnert Park, California 94928.


Item 2. Identity and Background.

        Item 2 is amended and restated to read as follows:

            (a)—(c), (f)This Statement is being filed by Motorola. Motorola's principal executive offices are located at 1303 East Algonquin Road, Schaumburg, Illinois 60196. Motorola is a global leader in providing integrated communications solutions and embedded electronic solutions. These include: (i) Software-enhanced wireless telephone, two-way radio, messaging products and systems, as well as networking and Internet-access products, for consumers, network operators, and commercial, government and industrial customers; (ii) end-to-end systems for the delivery of interactive digital video, voice and high-speed data solutions for broadband operations; (iii) embedded semiconductor solutions for customers in the networking and computing, transportation wireless communications and digital consumer/home networking markets; and (iv) embedded electronic systems for automotive, industrial, transportation, navigation, communications and energy systems markets.

        The names, business addresses and present principal occupations or employment of the directors and executive officers of Motorola are set forth in the attached Appendix 1, which is incorporated herein by reference. To the best of Motorola's knowledge, except as noted on Appendix 1, all directors and executive officers of Motorola are citizens of the United States.

            (d)—(e)Neither Motorola, nor to the best of Motorola's knowledge, any of the directors or executive officers listed on Appendix 1 has been, during the last five years, (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.


Item 4. Purpose of transaction.

        Item 4(a)—(j) is amended to include the following:

        Proposed Going Private Transaction

        On January 13, 2003, Motorola announced that it intended to commence a tender offer to acquire all of the outstanding share of common stock of Next Level at a price of $1.04 in cash. The proposal was made public on January 13, 2003. The press release is filed as an exhibit herewith and is incorporated by reference herein. Also filed as an exhibit hereto is the letter sent to the Chairman of Next Level's Board of Directors advising him of the tender offer and the Questions and Answers Regarding the Tender Offer Transaction issued by Motorola.

3




Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of Issuer.

        Item 6 is amended to include the following:

        See "Item 4. Purpose of Transaction" for a description of the announcement by Motorola on January 13, 2003. This description is subject to, and qualified in its entirety by reference to, the press release, and answers to questions, each of which have been filed as exhibits herewith.


Item 7. Material to be Filed as Exhibits.

        Item 7 is amended to include the following:

    99.1
    Text of Press Release, issued by Motorola on January 13, 2003.

    99.2
    Letter, dated January 12, 2003, from Motorola to the Chairman of Next Level's Board of Directors

    99.3
    Questions and Answers For Motorola, Inc. Tender Offer For Next Level Communications Common Stock, issued by Motorola on January 13, 2003.

4



SIGNATURE

        After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: January 13, 2003

  MOTOROLA, INC.

 

By:

 

/s/  
DONALD F. MCLELLAN      

 

Name:

 

Donald F. McLellan

 

Title:

 

Corporate Vice President

5


Appendix 1

INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF MOTOROLA, INC.

        The following table sets forth the name, business address, and principal occupation or employment at the present time for each director and executive officer of Motorola. Unless otherwise noted, each such person is a citizen of the United States. In addition, unless otherwise noted, each such person's business address is 1303 East Algonquin Road, Schaumburg, Illinois 60106.

Name and Business Address
Citizenship

  Principal Occupation
or Employment

Christopher B. Galvin   Chairman of the Board and Chief Executive Officer

Michael S. Zafirovski

 

President and Chief Operating Officer

Francesco Caio
Via Caldera 21
20153 Milano, Italy
Italian Citizenship

 

Chief Executive Officer
Netscalibur

H. Laurance Fuller
Primary Business Center
1111 E. Earrensville Road, #257
Naperville, IL 60563

 

Retired. Formerly Co-Chairman of Board of Directors
BP Amoco, p.l.c.

Anne P. Jones
5716 Bent Branch Road
Bethesda, MD 20816

 

Consultant

Judy C. Lewent
Merck & Co., Inc.
One Merck Drive
Whitehouse Station, NJ 08889

 

Executive Vice President and Chief Financial Officer
Merck & Co., Inc.

Dr. Walter E. Massey
Morehouse College
830 Westview Drive, SW
Atlanta, GA 30314

 

President
Morehouse College

Indra K. Nooyi
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577

 

President and Chief Financial Officer
PepsiCo, Inc.

Nicholas Negroponte
Massachusetts Institute of Technology Media Laboratory
20 Ames Street, E15-210
Cambridge, MA 02139

 

Chairman
Massachusetts Institute of Technology Media Laboratory

John E. Pepper, Jr.
Procter & Gamble Co.
One Procter & Gamble Plaza
Cincinnati, OH 45202

 

Chairman of the Board of Directors
Proctor & Gamble Co.

 

 

 

6



Samuel C. Scott III
CPC International, Inc.
6500 Archer Road
Summit-Argo, IL 60501

 

Chairman and Chief Executive Officer
Corn Products International

Douglas A. Warner III
J.P. Morgan Chase & Co.
345 Park Avenue, 11th Floor
New York, NY 10154

 

Retired. Formerly Chairman of the Board
J.P. Morgan Chase & Co.

B. Kenneth West
Retired Chairman of the Board
Harris Bankcorp, Inc.
32196 North River Road
Libertyville, IL 60048-4247

 

Senior Consultant for Corporate Governance to Teachers Insurance and Annuity Associate—College Retirement Equities Fund

Dr. John A. White
University of Arkansas
425 Administration Building
Fayetteville, AR 72701

 

Chancellor
University of Arkansas

7



EXECUTIVE OFFICERS OF MOTOROLA, INC.
(WHO ARE NOT ALSO DIRECTORS OF MOTOROLA, INC.)

Name

  Title
Robert L. Barnett   Executive Vice President

Gregory Q. Brown

 

Executive Vice President and Chief Executive Officer
Commercial, Government and Industrial Solutions Sector

Dennis J. Carey

 

Executive Vice President and President and Chief Executive Officer
Integrated Electronic Systems Sector

Eugene A. Delaney

 

Executive Vice President and President
Global Relations and Resources Organization

David W. Devonshire

 

Executive Vice President and Chief Financial Officer

Glenn A. Gienko

 

Executive Vice President and Motorola Director of Human Resources

A. Peter Lawson

 

Executive Vice President, General Counsel and Secretary

Thomas J. Lynch

 

Executive Vice President and President
Personal Communications Sector

Daniel M. Moloney

 

Executive Vice President and President
Broadband Communications Sector

Adrian R. Nemcek

 

Executive Vice President and President
Global Telecom Solutions Sector

Fred (Theodore) A. Shlapak
Canadian Citizenship

 

Executive Vice President and President
Semiconductor Products Sector

Leif G. Soderberg

 

Senior Vice President and Director
Global Strategy and Corporate Development

Padmasree Warrior

 

Senior Vice President and Chief Technology Officer

8




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SIGNATURE
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF MOTOROLA, INC.
EXECUTIVE OFFICERS OF MOTOROLA, INC. (WHO ARE NOT ALSO DIRECTORS OF MOTOROLA, INC.)
EX-99.1 3 a2100669zex-99_1.htm EXHIBIT 99.1
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Exhibit 99.1

Motorola Announces Plans to Acquire Balance of Next Level Communications Stock

        SCHAUMBURG, IL (January 13, 2003)—Motorola, Inc. (NYSE:MOT) today announced that it intends to make a tender offer for all of the outstanding publicly held shares of its subsidiary, Next Level Communications, Inc. (NASDAQ:NXTV). Motorola currently owns 74% of the outstanding common stock of Next Level and intends to offer to acquire the balance of Next Level's common stock at $1.04 per share in cash, representing a 14.4% premium over the closing price on January 10, 2003 and a 28.6% premium over the average closing price for the last 90 trading days. The aggregate consideration for the outstanding Next Level shares (including shares outstanding following exercise of in-the-money options) would be approximately $30 million.

        Motorola acquired shares of Next Level through its acquisition of General Instrument Corporation, which became the basis for the formation of its Broadband Communications Sector in January 2000. In December 2000, Motorola began providing capital to Next Level to support its operations and since that time has provided over $175 million in funding and $30 million in financial guarantees to its Next Level subsidiary.

        "We continue to re-evaluate our business portfolio and seek ways to improve the financial strength and performance of our businesses," said Don McLellan, corporate vice president of mergers and acquisitions, Motorola. "Reintegrating our Next Level subsidiary provides the talented Next Level team a financially sound base and broader resources to continue deploying industry-leading broadband access platforms. At the same time Next Level will avoid the escalating costs and management time spent reassuring customers and suppliers of Next Level's financial viability, seeking additional financing sources and remaining publicly traded."

ABOUT THE TENDER OFFER

        The offer will be conditioned upon, among other things (1) the tender of a majority of Next Level shares not held by Motorola and its affiliates, and (2) unless waived, Motorola owning at least 90% of the outstanding Next Level common stock as a result of the tender offer or otherwise. The tender will not be conditioned on Motorola obtaining any financing. Any shares not acquired in the tender offer are expected to be acquired in a subsequent "short form" merger transaction at the same $1.04 per share cash price.

        Motorola expects to commence the tender offer as soon as practicable. Once the tender offer is commenced, offering materials will be mailed to Next Level securityholders and Motorola will file all necessary information with the United States Securities and Exchange Commission. The commencement and completion of the tender offer and, if the tender offer is completed, the consummation of the merger, does not require any approval by the Next Level board and Motorola has not asked the Next Level board of directors to approve the tender offer or the merger. Under applicable law, Next Level is required to file with the SEC a statement as to its position on the offer as well as other required information within 10 business days of the date on which the offer is commenced.

NOTICE FOR NEXT LEVEL SECURITYHOLDERS

        Next Level securityholders and other interested parties are urged to read Motorola's tender offer statement and other relevant documents filed with the SEC when they become available because they will contain important information. Next Level securityholders will be able to receive such documents free of charge at the SEC's web site, www.sec.gov, or from Motorola, Inc. at 1303 E. Algonquin Road, Schaumburg, Illinois 60196, ATTN: Investor Relations.



ABOUT MOTOROLA

        Motorola, Inc. (NYSE: MOTNews) is a global leader in providing integrated communications and embedded electronic solutions. Sales in 2001 were $30 billion. For more information, please visit: www.motorola.com

BUSINESS RISKS

        Statements in this news release that relate to consummation of the tender offer and any subsequent merger and the impact of the reintegration of Next Level into Motorola described herein are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve risks and uncertainties which include whether the conditions to the tender offer will be satisfied and, following the consummation of the tender offer and the merger, Motorola's ability to successfully reintegrate Next Level operations, retain key employees, reduce costs, general economic factors and capital market conditions, and general industry trends. Motorola wishes to caution the reader that these factors, as well as other factors described in Motorola's SEC filings, are among the factors that could cause actual results to differ materially from the expectations described in the forward-looking statements.





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Motorola Announces Plans to Acquire Balance of Next Level Communications Stock
EX-99.2 4 a2100669zex-99_2.htm EXHIBIT 99.2

Exhibit 99.2

January 12, 2003

By Fax

J. Michael Norris, Chairman of the Board,
    President, and Chief Executive Officer
Next Level Communications, Inc.
6085 State Farm Drive
Rohnert Park, California 94928

Dear Michael:

        Motorola, Inc. ("Motorola") is pleased to advise you that it intends to commence a tender offer for all of the outstanding shares of common stock of its subsidiary, Next Level Communications, Inc. ("Next Level" or the "Company"), not owned by Motorola, at a purchase price of $1.04 per share in cash. This represents a premium of approximately 14.4% over the closing price on Friday, January 10, 2003, and a 28.6% premium over the average closing price for the last 90 trading days. In our view, this price represents a fair price to the Company's shareholders and this transaction will be mutually beneficial to the Company's shareholders and Motorola.

        The tender offer will be conditioned upon, among other things, the tender of a majority of shares not owned by Motorola and its affiliates and, unless waived, Motorola owning at least 90% of the outstanding Next Level common stock as a result of the tender or otherwise. Any shares not acquired in the tender offer are expected to be acquired in a subsequent "short form" merger transaction at the same $1.04 per share cash price. There will be no financing contingency associated with the tender offer.

        As majority investor and principal financial backer of the Company to date, we appreciate the efforts you and others have made to improve the Company's performance and strategic position in the challenging environment for wireline equipment suppliers. We believe challenges in your business will continue, requiring further financial and other support from Motorola for Next Level to be competitive as a stand-alone company. Now is the time to reintegrate the Company into Motorola so that together we can focus efforts on Next Level's customers, technology and product development from a stable financial platform with broad resources to address the future of broadband communications.

        In order to promptly and fully realize these benefits, we wish to complete this transaction as quickly as possible. Accordingly we intend to commence a tender offer as soon as practicable without seeking approval from Next Level's board of directors. Motorola understands, however, that Next Level's board may wish to retain legal and financial advisors to help them consider their position with respect to this offer. We are hopeful that by proceeding with a tender offer the Company's shareholders will be able to receive payment for their shares earlier than would be the case if we sought to negotiate a merger agreement.

        A copy of the press release and supporting materials announcing the tender offer are attached for your information. We expect to make this release public prior to the market opening tomorrow.

        I will head the Motorola business team on this transaction and Michelle Warner will lead the legal team. If you have any questions concerning our offer, please contact me or Michelle.

                        Best regards,

                        Don McLellan
                        Corporate Vice President & Director, Corporate Development




EX-99.3 5 a2100669zex-99_3.htm EXHIBIT 99.3
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Exhibit 99.3

QUESTIONS AND ANSWERS FOR MOTOROLA, INC. TENDER OFFER FOR NEXT LEVEL
COMMUNICATIONS COMMON STOCK

JANUARY 13, 2003

PRELIMINARY STATEMENT

        THE OFFER FOR NEXT LEVEL COMMUNICATIONS COMMON STOCK HAS NOT YET COMMENCED. ANY OFFER WILL BE MADE PURSUANT TO A TENDER OFFER STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. NEXT LEVEL SECURITYHOLDERS AND OTHER INTERESTED PARTIES ARE URGED TO READ MOTOROLA'S TENDER OFFER STATEMENT AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. NEXT LEVEL SECURITYHOLDERS WILL BE ABLE TO RECEIVE SUCH DOCUMENTS FREE OF CHARGE AT THE SEC'S WEB SITE, WWW.SEC.GOV, OR FROM MOTOROLA, INC. AT 1303 E. ALGONQUIN ROAD, SCHAUMBURG, ILLINOIS 60196, ATTN: INVESTOR RELATIONS.

KEY STATEMENTS

1. This transaction is a "WIN-WIN-WIN"

    Next Level shareholders receive a premium for a stock whose value prospects in Motorola's opinion are uncertain given its current cost and capital structure. The offer price represents a premium of 14.4% over the closing price on January 10, 2003; a 17.7% premium over the average closing price for the 5 trading days ending on January 10, 2003; a 22.6% premium over the average closing price for the 20 trading days ending on January 10, 2003; and a 28.6% premium over the average closing price for the 90 trading days ending on January 10, 2003.

    Together Motorola and Next Level's team can focus efforts on Next Level's customers, technology and product development from a stable financial platform with broad resources to address the future of broadband communications.

    Reintegrating the Next Level subsidiary into Motorola is expected to improve the financial strength and performance of Next Level's operations, which have formed a part of Motorola's consolidated results.

2. Next Level faces short-term funding needs given its cost structure.

    Even with the most recent Motorola cash infusion, financial analysts see a significant funding gap for 2003. In addition Motorola believes Next Level may require significant funding through 2004 under its current cost structure.

    Operating costs have exceeded revenues for 9 of the last 10 quarters, with analysts projecting this trend to likely continue through 2003.

3. Motorola has invested a significant amount in Next Level.

    Since the time Motorola acquired its interest in Next Level through its acquisition of General Instrument Corporation in January 2000, the value of its common stock interest in Next Level declined 98.7%.

    Since December 2000 Motorola has provided over $175 million in funding and $30 million in financial guarantees to Next Level.

QUESTIONS AND ANSWERS

PRINCIPAL FACTS

Q1: Why is Motorola seeking to acquire the balance of Next Level?

A1: Motorola continues to re-evaluate its business portfolio seeking to enhance the financial strength and performance of its businesses. Reintegrating the Next Level subsidiary into Motorola is expected to improve the financial strength and performance of Next Level's operations in three principal ways:

    1.
    provide a sound financial base and additional resources to continue to deploy industry-leading broadband access solutions.

    2.
    make available best-in-class manufacturing, engineering/product development methods and supply chain efficiencies.

    3.
    avoid the escalating costs and management time associated with reassuring customers and suppliers of Next Level's financial viability; seeking third party financing; and remaining publicly traded.

Q2: What percentage of Next Level does Motorola currently own?

A2: Motorola currently owns 74% of the outstanding common stock of Next Level. Motorola also owns all of the preferred stock of Next Level, which is convertible into shares of Next Level common stock. In addition, Motorola owns warrants to purchase additional shares of Next Level stock at various exercise prices and exercisable over various periods. On a fully-diluted basis, based on the offer price of $1.04 per share, Motorola would own approximately 82% of the common stock (this percentage may differ from Motorola's ownership percentage as disclosed in its Schedule 13D as filed with the United States Securities and Exchange Commission due to SEC rules required for 13D calculations). For this purpose fully-diluted assumes conversion or exercise of all in-the-money preferred shares, options and currently exercisable warrants.

Q3: What are the terms of the tender offer?

A3: Motorola is offering to purchase all outstanding shares of Next Level common stock which it currently does not own for $1.04 per share.

Q4: What is the value of the transaction?

A4: The aggregate consideration for the outstanding Next Level shares (including shares outstanding following exercise of in-the-money options) would be approximately $30 million.

Q5: When is the transaction expected to close?

A5: Subject to satisfaction of the conditions to the tender offer and assuming the tender offer is not extended, we believe that the transaction will close in the first quarter.

Q6: What are the conditions to the transaction?

A6: The offer will be conditioned upon, among other things (1) the tender of a majority of Next Level shares not held by Motorola and its affiliates, and (2) unless waived, Motorola owning at least 90% of the outstanding Next Level common stock as a result of the tender offer or otherwise.

The tender will not be conditioned on Motorola obtaining any financing.

Q7: What kinds of regulatory approvals are needed to consummate the tender offer?

A7: Other than the filings required by the Securities and Exchange Commission in connection with the tender offer we do not anticipate that any other governmental approvals are required.


Q8: What will happen to any shares that are not acquired following completion of the tender offer?

A8: Any shares not acquired following completion of the tender offer are expected to be acquired in a subsequent "short form" merger transaction at the same $1.04 per share cash price.

Q9: What are your plans for the Next Level operations?

A9: We will be reviewing our facilities, operational and engineering needs with the Next Level team to determine what operational efficiencies can be achieved. We have not finalized our review at this time; however it is our present intention to have the Next Level business report into the Broadband Communications Sector.

NEXT LEVEL'S BUSINESS

Q10: What is Next Level's principal product?

A10: Next Level targets wireline operators with broadband access platforms for delivering any combination of voice, high-speed data and multi-stream digital video services using existing copper telephone lines. Next Level's primary products are based on VDSL technology. (VDSL stands for very high speed digital subscriber line). For more information regarding Next Level please contact them directly or visit their Web site at www.nlc.com

Q11: How has the telecom downturn affected Next Level?

A11: As a result of the telecom recession, wireline operators have been reluctant to commit large dollars to smaller players and have reduced their capital expenditures generally. As a result Next Level revenues have declined significantly over the past few years.

Q 12: How will this transaction improve Next Level's business?

A12: Next Level's business will benefit from efficiencies being part of a larger communications equipment provider including engineering and development efficiencies, standards positioning, customer support infrastructure, financial resources and best practices. In addition, Motorola can increase Next Level's exposure to international markets.

BUSINESS RISKS

        Statements in this Q&A that relate to consummation of the tender offer and any subsequent merger and the impact of the reintegration of Next Level into Motorola described herein are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve risks and uncertainties which include whether the conditions to the tender offer will be satisfied and, following the consummation of the tender offer and the merger, Motorola's ability to successfully reintegrate Next Level operations, retain key employees, reduce costs, general economic factors and capital market conditions, and general industry trends. Motorola wishes to caution the reader that these factors, as well as other factors described in Motorola's SEC filings, are among the factors that could cause actual results to differ materially from the expectations described in the forward-looking statements.





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