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<SEC-DOCUMENT>0000950131-01-000392.txt : 20010124
<SEC-HEADER>0000950131-01-000392.hdr.sgml : 20010124
ACCESSION NUMBER:		0000950131-01-000392
CONFORMED SUBMISSION TYPE:	S-3/A
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20010123

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/A
		SEC ACT:		
		SEC FILE NUMBER:	333-53686
		FILM NUMBER:		1513732

	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
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-3/A
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>AMENDMENT NO. 1 TO FORM S-3
<TEXT>

<PAGE>

   As filed with the Securities and Exchange Commission on January 23, 2001
                                                     Registration No. 333-53686
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                --------------

                              AMENDMENT NO. 1 TO
                                   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              Oscar A. David
Executive Vice President        Senior Counsel              R. Cabell Morris,
   and Chief Financial     1303 East Algonquin Road                Jr.
         Officer          Schaumburg, Illinois 60196        Winston & Strawn
1303 East Algonquin Road        (847) 576-5014            35 West Wacker Drive
  Schaumburg, Illinois                                      Chicago, Illinois
          60196                                                   60601
     (847) 576-5000                                          (312) 558-5600
(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. [_]

                                --------------

   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.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

                                EXPLANATORY NOTE

   This registration statement contains two forms of prospectus supplements in
connection with Motorola's offering of securities pursuant to the prospectus
contained herein. Motorola will offer five year term notes pursuant to the
first prospectus supplement and puttable reset securities pursuant to the
second prospectus supplement.
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+    The information in this preliminary prospectus is not complete and may be +
+                                   changed.                                   +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                 Subject to Completion. Dated January 23, 2001.

          Prospectus Supplement to Prospectus dated January   , 2001.

                                   $

                                [MOTOROLA LOGO]

                            % Notes due           , 2006

                                  -----------

  We will pay interest on the notes on           and          of each year,
beginning on          , 2001. The notes will mature on          , 2006. We may
redeem all or a portion of the notes at any time at the redemption prices
described in this prospectus supplement. The notes are unsecured and rank
equally with all of our other unsecured senior indebtedness. The notes will be
issued only in denominations of $1,000 and integral multiples of $1,000.

  Concurrent with this offering, we are offering $         of Puttable Reset
Securities PURSSM due         , 2011 pursuant to a separate prospectus. The
offerings of the notes and of the PURS are not contingent upon each other.

                                  -----------

  Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.

                                  -----------

<TABLE>
<CAPTION>
                                                             Per
                                                             Note     Total
                                                            ------ ------------
<S>                                                         <C>    <C>
Initial public offering price..............................      % $
Underwriting discount......................................      % $
Proceeds, before expenses, to Motorola.....................      % $
</TABLE>

  The initial public offering price set forth above does not include accrued
interest, if any. Interest on the notes will accrue from          , 2001 and
must be paid by the purchaser if the notes are delivered after         , 2001.

                                  -----------

  The underwriters expect to deliver the notes in book-entry form only through
the facilities of The Depository Trust Company, Clearstream Banking or the
Euroclear System, as the case may be, on             , 2001.

  PURSSM is a service mark of Goldman, Sachs & Co.

Goldman, Sachs & Co.

                                  -----------

                  Prospectus Supplement dated          , 2001.

<PAGE>


                                USE OF PROCEEDS

    The net proceeds to be received by us from the offering, after deducting
the underwriting discount and estimated expenses, are estimated to be
approximately $      million. The aggregate net proceeds from the offering of
the notes, together with $      million of estimated net proceeds from the
concurrent sale of our PURS pursuant to a separate prospectus, will be used to
reduce short-term indebtedness and for general corporate purposes. On January
19, 2001, we had outstanding approximately $6.7 billion of commercial paper,
with a weighted average maturity of approximately 100 days and bearing a
weighted average interest rate of approximately 6.4% per annum.

                                 CAPITALIZATION

    The following table sets forth our consolidated short-term debt and
capitalization as of September 30, 2000, and as adjusted to give effect to the
sale of the notes and the concurrent sale of our PURS, and the anticipated
application of the estimated net proceeds therefrom to reduce short-term
indebtedness. From time to time, we may issue additional debt or equity
securities. The following information should be read in conjunction with our
consolidated financial statements, including the notes thereto, which are
incorporated herein by reference. See "Where You Can Find More Information" in
the accompanying prospectus.

<TABLE>
<CAPTION>
                                                           September 30, 2000
                                                           --------------------
                                                           Actual   As Adjusted
                                                           -------  -----------
                                                             (in millions of
                                                                dollars)
<S>                                                        <C>      <C>
Short-Term Debt
  Commercial paper(a)..................................... $ 5,257    $
  Notes payable and other short-term debt.................     --         --
  Current portion of long-term debt.......................       5          5
                                                           -------    -------
    Total short-term debt................................. $ 5,262    $
                                                           =======    =======
Long-Term Debt(b)
  Senior notes and debentures(c).......................... $ 2,981    $ 2,981
  Other senior debt.......................................     130        130
  Notes offered hereby....................................     --
  PURS offered concurrently...............................     --
  Less current portion of long-term debt..................      (5)        (5)
                                                           -------    -------
    Total long-term debt..................................   3,106
                                                           -------    -------
Company-obligated mandatorily redeemable preferred
 securities of subsidiary trust holding solely company-
 guaranteed debentures....................................     484        484
Stockholders' Equity(d)
  Preferred stock (none issued)...........................     --         --
  Common stock............................................   6,554      6,554
  Additional paid-in capital..............................     928        928
  Retained earnings.......................................   9,680      9,680
  Non-owner changes to equity.............................   3,496      3,496
                                                           -------    -------
    Total stockholders' equity............................  20,658     20,658
                                                           -------    -------
      Total capitalization................................ $24,248    $
                                                           =======    =======
</TABLE>
- --------
(a) On January 19, 2001, we had outstanding approximately $6.7 billion of
    commercial paper. Assuming all of the aggregate net proceeds from the
    concurrent offerings of notes and PURS are used to reduce short-term
    indebtedness, approximately $   billion of commercial paper would be
    outstanding following the consummation of the concurrent offerings.
(b) For additional information on long-term debt, see Note 4 of the Notes to
    Consolidated Financial Statements for December 31, 1999, included in our
    Current Report on Form 8-K/A filed with the Securities and Exchange
    Commission on June 2, 2000 and incorporated by reference herein.
(c) The amount of "As Adjusted" senior notes and debentures should be further
    adjusted to reflect the November 13, 2000 issuance of $1.2 billion of our 7
    5/8% notes due November 15, 2010, which are unsecured and rank equally with
    all of our other unsecured senior indebtedness, including the notes offered
    hereby. The net proceeds to us from the issuance and sale of the 7 5/8%
    notes were $1.189 billion. We used these proceeds to reduce short-term
    indebtedness.
(d) Given the recent volatility experienced in the equity markets, and
    particularly in the technology sector in which we have significant
    strategic investments, our period-to-period stockholders' equity is subject
    to fluctuations caused by changes in the market values of our investments.
    For additional information on stockholders' equity, see the Consolidated
    Financial Statements for December 31, 1999, included in our Current Report
    on Form 8-K/A filed with the Securities and Exchange Commission on June 2,
    2000 and incorporated by reference herein, and Note 3 thereto.

                                      S-3
<PAGE>


                      SUMMARY CONSOLIDATED FINANCIAL DATA
                            (in millions of dollars)

   The summary consolidated financial data of Motorola as of December 31, 1999
and 1998 and for the years ended December 31, 1999, 1998 and 1997 has been
derived from consolidated financial statements of Motorola which have been
audited by KPMG LLP, independent auditors, and incorporated by reference herein
from Motorola's Current Report on Form 8-K/A filed with the Securities and
Exchange Commission on June 2, 2000. The summary consolidated financial data of
Motorola as of December 31, 1997, 1996 and 1995 and for the years ended
December 31, 1996 and 1995 has been derived from audited consolidated financial
statements of Motorola audited by KPMG LLP, independent auditors, and of
General Instrument Corporation audited by Deloitte & Touche LLP, independent
auditors, previously filed with the Securities and Exchange Commission, but not
incorporated by reference herein. The summary consolidated financial data as of
and for the nine months ended September 30, 2000 and October 2, 1999, has been
derived from unaudited consolidated financial statements filed with the
Securities and Exchange Commission and incorporated by reference herein and, in
the opinion of management, contains all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of Motorola's
financial position and results of operations as of and for such periods.
Operating results for the nine months ended September 30, 2000, are not
necessarily indicative of the results that may be expected for the entire year
ending December 31, 2000. See "Recent Developments." This information is
qualified in its entirety by, and should be read in conjunction with, the
consolidated financial statements, the notes thereto, and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" for
Motorola incorporated by reference herein.

<TABLE>
<CAPTION>
                         Nine Months Ended          Year Ended December 31,
                         ------------------ -----------------------------------------
                         Sept 30,   Oct 2,
                           2000      1999    1999     1998     1997    1996    1995
                         --------- -------- -------  -------  ------- ------- -------
<S>                      <C>       <C>      <C>      <C>      <C>     <C>     <C>
Operating Results (1)
  Net sales............. $ 27,516  $ 23,989 $33,075  $31,340  $31,498 $29,657 $28,495
  Manufacturing and
   other costs of
   sales................   16,838    14,612  20,631   19,396   18,532  17,854  16,345
  Selling, general and
   administrative
   expenses.............    3,674     4,226   5,446    5,656    5,373   5,027   4,916
  Restructuring and
   other charges........       --        --    (226)   1,980      327      --      --
  Research and
   development
   expenditures.........    3,293     2,528   3,560    3,118    2,930   2,572   2,321
  Depreciation expense..    1,718     1,680   2,243    2,255    2,394   2,367   1,961
  Interest expense,
   net..................      175       118     138      215      136     211     172
   Total costs and
    expenses............   25,698    23,164  31,792   32,620   29,692  28,031  25,715
  Net gain on Nextel
   asset exchange.......       --        --      --       --       --      --     443
  Earnings (loss) before
   income taxes.........    1,818       825   1,283   (1,280)   1,806   1,626   3,223
  Income tax provision
   (benefit)............      635       257     392     (373)     642     568   1,171
  Net earnings (loss)... $  1,183  $    568 $   891  $  (907) $ 1,164 $ 1,058 $ 2,052
Balance Sheet (1)
  Total assets.......... $ 44,177  $ 36,895 $40,489  $30,951  $28,954 $25,665 $24,086
  Working capital.......    3,953     4,765   4,679    2,532    4,597   3,696   2,938
  Long-term debt and
   redeemable preferred
   securities...........    3,590     3,598   3,573    2,633    2,144   1,931   1,949
  Total debt and
   redeemable preferred
   securities...........    8,852     5,093   6,077    5,542    3,426   3,328   3,554
  Total stockholders'
   equity...............  $20,658   $16,435 $18,693  $13,913  $14,487 $12,843 $11,911
</TABLE>
- -------
(1) These figures have been restated to reflect the merger with General
    Instrument Corporation, which has been accounted for as a pooling-of-
    interests.

                                      S-4

<PAGE>


                              RECENT DEVELOPMENTS

Recent Earnings

    On January 10, 2001, we reported unaudited financial results for the fiscal
quarter and year ended on December 31, 2000.

  . We reported sales of $10.06 billion in the fourth quarter of 2000, up 11
    percent from $9.09 billion a year earlier.

  . Excluding special items, net earnings were $335 million in the fourth
    quarter of 2000, or 15 cents per share, compared with net earnings of
    $565 million, or 25 cents per share, in the fourth quarter of 1999. In
    the fourth quarter of 2000, we reported special items resulting in a net
    charge of $68 million pre-tax, or $200 million (equal to 9 cents per
    share) after-tax. Charges were incurred primarily relating to the
    discontinuation of older wireless telephone products as part of an
    ongoing product portfolio simplification strategy and the downsizing of
    various manufacturing operations. The charges were largely offset by
    gains from the sale of investments during the quarter. In the fourth
    quarter of 1999, we reported special items resulting in a net charge of
    $351 million pre-tax, or 10 cents per share after-tax. Including special
    items, fourth-quarter 2000 earnings were $135 million, or 6 cents per
    share, compared with $323 million, or 15 cents per share a year ago.

  . For the full-year 2000, sales from ongoing operations increased 17
    percent to $37.6 billion from $32.0 billion in 1999. Including sales
    from businesses sold in 1999, sales increased 14 percent from $33.1
    billion a year ago.

  . Full-year earnings from ongoing operations in 2000, excluding special
    items, were $1.9 billion, or 84 cents per share, compared with $1.4
    billion, or 63 cents per share in 1999. Including the earnings from
    businesses sold in 1999, full-year earnings in 2000, excluding special
    items, were up 29 percent compared with $1.5 billion, or 67 cents in
    1999. Including special items and earnings from businesses sold in 1999,
    full-year earnings in 2000 were $1.3 billion, or 58 cents per share,
    compared with $891 million, or 41 cents per share, in 1999.

Recent Announcement

    We began implementing cost reductions in the third and fourth quarters of
2000 and announced on January 10, 2001 that we will continue with additional
cost reduction actions in the first quarter of 2001. As part of our cost
reduction program, on January 15, 2001, we announced plans to cease
manufacturing operations at our Harvard, Illinois campus and shift the
operational focus to customer order fulfillment and new product sourcing. The
transition in Harvard will result in the elimination of approximately 2,500
manufacturing positions. The target date for completion of the manufacturing
shutdown in Harvard is June 30, 2001.

Concurrent Offering

    In addition to the notes offered by this prospectus, we are concurrently
offering up to $     of Puttable Reset Securities PURS due           , 2011
pursuant to a separate prospectus. The offerings of the notes and of the PURS
are not contingent upon each other. The PURS would be unsecured and would rank
equally with all of our other unsecured senior indebtedness, including the
notes.

                                      S-5

<PAGE>


                            DESCRIPTION OF THE NOTES

    The following description of the particular terms of the notes offered
hereby supplements the description of the general terms and provisions of debt
securities set forth in the accompanying prospectus under the caption
"Description of Debt Securities."

General

    The notes are a series of debt securities under the Senior Indenture dated
May 1, 1995 between Motorola and Bank One Trust Company, N.A., as trustee,
which is more fully described in the accompanying prospectus. You can find
definitions for some of the capitalized terms in the accompanying prospectus.

    The notes will mature on            , 2006. The notes will bear interest at
the rate set forth on the cover page of this prospectus supplement, payable
semi-annually on        and          of each year, commencing       , 2001, to
the registered holders thereof on the preceding       or        , as the case
may be.

    The notes will not have the benefit of a sinking fund.

    Payment of the principal and interest on the notes will rank equally with
all of our other unsecured and unsubordinated debt. As of December 31, 2000, we
had approximately $10.59 billion of indebtedness (and approximately $689
million of guarantees by Motorola) that would have ranked equally with the
notes and approximately $579 million of indebtedness and redeemable preferred
securities that would have ranked junior to the notes.

    The senior indenture does not limit the amount of additional indebtedness
that we or any of our subsidiaries may incur. The notes will be our exclusive
obligations. Since our operations are partially conducted through subsidiaries,
primarily overseas, the cash flow and the consequent ability to service debt,
including our notes, are partially dependent upon the earnings of our
subsidiaries and the distribution of those earnings to, or upon other payments
of funds by those subsidiaries to, us. The subsidiaries are separate and
distinct legal entities and have no obligation, contingent or otherwise, to pay
any amounts due on the notes or to make funds available for such payments,
whether by dividends, loans or other payments. In addition, the payment of
dividends and the making of loans and advances to us by our subsidiaries may be
subject to statutory or contractual restrictions, are contingent upon the
earnings of those subsidiaries, and are subject to various business
considerations.

    Any right of Motorola to receive assets of any of its subsidiaries upon
their liquidation or reorganization (and the resulting right of the holders of
the notes to participate in those assets) will be effectively subordinated to
the claims of that subsidiary's creditors (including trade creditors), except
to the extent that Motorola is itself recognized as a creditor of such
subsidiary, in which case our claims would be subordinated to any security
interests in the assets of such subsidiary and any indebtedness of such
subsidiary senior to that held by us. As of December 31, 2000, our subsidiaries
had outstanding approximately $5.3 billion of liabilities.

    The notes are subject to defeasance under the conditions described in the
accompanying prospectus and the senior indenture.

    We may, without the consent of the holders of the notes, create and issue
additional notes ranking equally with the notes and otherwise similar in all
respects so that such further notes would be consolidated and form a single
series of the notes.

Redemption At Our Option

    We may, at our option, redeem the notes in whole or in part at any time at
a redemption price equal to the greater of:

  .  100% of the principal amount of the notes to be redeemed, plus accrued
     interest to the redemption date, or

                                      S-6
<PAGE>


  .  as determined by the Independent Investment Banker, the sum of the
     present values of the remaining principal amount and scheduled payments
     of interest on the notes to be redeemed (not including any portion of
     payments of interest accrued as of the redemption date) discounted to
     the redemption date on a semi-annual basis at the Treasury Rate plus
         basis points, plus accrued interest to the redemption date.

    The redemption price will be calculated assuming a 360-day year consisting
of twelve 30-day months.

    "Treasury Rate" means, with respect to any redemption date, the rate per
year equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated on the third business day preceding the redemption
date, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
that redemption date.

    "Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the notes that would be used, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
notes.

    "Comparable Treasury Price" means, with respect to any redemption date:

  .  the average of the Reference Treasury Dealer Quotations for that
     redemption date, after excluding the highest and lowest of the Reference
     Treasury Dealer Quotations, or

  .  if the trustee obtains fewer than three Reference Treasury Dealer
     Quotations, the average of all Reference Treasury Dealer Quotations so
     received.

    "Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the trustee after consultation with us.

    "Reference Treasury Dealer" means (a) each of Goldman, Sachs & Co.,
       , and         and their respective successors, unless any of them ceases
to be a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), in which case we shall substitute another Primary Treasury
Dealer; and (b) any other Primary Treasury Dealer selected by us.

    "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined
by the trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by that Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding that redemption date.

    We will mail notice of any redemption at least 30 days but not more than 60
days before the redemption date to each holder of the notes to be redeemed.

    Unless we default in payment of the redemption price, on and after the
redemption date, interest will cease to accrue on the notes or portions of the
notes called for redemption.

Book-Entry Notes

    The notes will be issued in the form of one or more definitive global
securities in registered form. The global securities will be deposited, until
all obligations of Motorola with respect to the notes are satisfied, with, or
on behalf of, The Depository Trust Company, DTC, and registered, at the request
of DTC, in the name of Cede & Co. Beneficial interests in the global securities
will be represented through book-entry accounts of financial institutions
acting on behalf of beneficial owners as direct and indirect participants in
DTC. Investors may elect to hold their interests in the global

                                      S-7
<PAGE>


securities through either DTC (in the United States) or Clearstream Banking,
societe anonyme or Morgan Guaranty Trust Company of New York, Brussels Office,
as operator of the Euroclear System, either directly, if they are participants
in such systems, or indirectly through organizations that are participants in
such systems. Clearstream Banking and Euroclear will hold interests on behalf
of their participants through customers' securities accounts in Clearstream
Banking's and Euroclear's names on the books of their respective U.S.
depositaries, which in turn will hold such interests in customers' securities
accounts in the U.S. depositaries' names on the books of DTC. The Chase
Manhattan Bank will act as U.S. depositary for Euroclear, and Citibank, N.A.
will act as U.S. depositary for Clearstream Banking. Beneficial interests in
the global securities may be held in denominations of $1,000 and integral
multiples of $1,000. The global securities may be transferred, as a whole but
not in part, only to another nominee of DTC or to a successor of DTC or its
nominee.

    So long as DTC or its nominee is the registered owner of a global security,
DTC or such nominee, as the case may be, will be considered the sole owner and
holder of the notes represented by such global security for all purposes of the
notes and the indenture, as the case may be. Owners of beneficial interests in
global securities will not be entitled to have the notes represented by such
global securities registered in their names. Accordingly, each person owning a
beneficial interest in a global security must rely on the procedures of DTC, or
its nominee, and, if such person is not a participant, on the procedures of the
participant through which such person owns its interest, to exercise any rights
of a holder of notes.

    Principal and interest payments on notes registered in the name of DTC or
its nominee will be made to DTC or its nominee, as the case may be, as the
registered owner of the global securities. None of Motorola, the trustee or any
paying agent or registrar for the notes will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial interests in the global securities or for maintaining,
supervising or reviewing any records relating to such beneficial interests.

    We expect that DTC or its nominee, upon receipt of any payment of principal
or interest, will credit the participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of the global securities as shown on the records of DTC or its nominee. We also
expect that payments by participants to owners of beneficial interests in the
global securities held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
in "street name", and will be the responsibility of such participants.

    DTC advises that it is a limited-purpose trust company organized under the
laws of the State of New York, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code and a "clearing agency" registered under the provisions of Section 17A of
the Securities Exchange Act of 1934. DTC was created to hold securities of DTC
participants and to facilitate the clearance and settlement of securities
transactions among DTC participants in such securities through electronic book-
entry changes in accounts of DTC participants, thereby eliminating the need for
physical movement of securities. DTC participants include securities brokers
and dealers (including underwriters), banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's book-entry system
is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a DTC
participant, either directly or indirectly. DTC agrees with and represents to
DTC participants that it will administer its book-entry system in accordance
with its rules and by-laws and requirements of law.

    Clearstream Banking advises that it is incorporated under the laws of
Luxembourg as a professional depositary. Clearstream Banking holds securities
for its customers and facilitates the clearance and settlement of securities
transactions between Clearstream customers through

                                      S-8
<PAGE>


electronic book-entry changes in accounts of Clearstream customers, thereby
eliminating the need for physical movement of certificates. Clearstream Banking
provides to Clearstream customers, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. As a bank, Clearstream Banking
is subject to regulation by the Luxembourg Commission for the Supervision of
the Financial Sector (Commission de Surveillance du Secteur Financier).
Clearstream customers are financial institutions, including underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations, and may include the underwriters. Indirect
access to Clearstream Banking is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Clearstream customer either directly or indirectly.

    Distributions with respect to notes held beneficially through Clearstream
Banking will be credited to cash accounts of Clearstream customers in
accordance with its rules and procedures, to the extent received by the U.S.
depositary for Clearstream Banking.

    Euroclear advises that it was created in 1968 to hold securities for
participants of Euroclear and to clear and settle transactions among Euroclear
participants through simultaneous electronic book-entry delivery against
payment, thereby eliminating the need for physical movement of certificates and
any risk from lack of simultaneous transfers of securities and cash. Euroclear
includes various other services, including securities lending and borrowing,
and interfaces with domestic markets in several countries. Euroclear is
operated by the Brussels, Belgium office of Morgan Guaranty Trust Company of
New York (the "Euroclear operator"), under contract with Euroclear Clearance
Systems S.C., a Belgian cooperative corporation (the "cooperative"). All
operations are conducted by the Euroclear operator, and all Euroclear
securities clearance accounts and Euroclear cash accounts are accounts with the
Euroclear operator, not the cooperative. The cooperative establishes policies
for Euroclear on behalf of Euroclear participants. Euroclear participants
include banks (including central banks), securities brokers and dealers and
other professional financial intermediaries and may include the underwriters.
Indirect access to Euroclear is also available to other firms that clear
through or maintain a custodial relationship with a Euroclear participant,
either directly or indirectly.

    The Euroclear operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.

    Securities clearance accounts and cash accounts with the Euroclear operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities
and cash from Euroclear and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear operator acts under the Terms and Conditions only on behalf of
Euroclear participants and has no record of or relationship with persons
holding through Euroclear participants.

    Distributions with respect to notes held beneficially through Euroclear
will be credited to the cash accounts of Euroclear participants in accordance
with the Terms and Conditions, to the extent received by the U.S. depositary
for Euroclear.

    Notes will not be issued in individual certificated form, except in very
limited circumstances as set forth under "Description of Debt Securities --
Global Securities" in the accompanying prospectus. In addition, if any of
Euroclear, Clearstream Banking or DTC notifies Motorola that it is unwilling or

                                      S-9
<PAGE>


unable to continue as a clearing system in connection with the global
securities or, in the case of DTC only, DTC ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, and in each case a
successor clearing system is not appointed by Motorola within 90 days after
receiving such notice from Euroclear, Clearstream Banking or DTC or on becoming
aware that DTC is no longer so registered, Motorola will issue or cause to be
issued individual certificates in registered form on registration of transfer
of, or in exchange for, book-entry interests in the notes represented by such
global securities upon delivery of such global securities for cancellation. In
the event individual certificates for the notes are issued, the holders thereof
will be able to receive payments on the notes and effect transfers of the notes
at the offices of the paying agent and transfer agent.

Global Clearance and Settlement Procedures

    Initial settlement for the notes will be made in immediately available
funds. Secondary market trading between DTC participants will occur in the
ordinary way in accordance with DTC rules and will be settled in immediately
available funds using DTC's Same-Day Funds Settlement System. Secondary market
trading between Clearstream customers and/or Euroclear participants will occur
in the ordinary way in accordance with the applicable rules and operating
procedures of Clearstream Banking and Euroclear and will be settled using the
procedures applicable to conventional Eurobonds in immediately available funds.

    Cross-market transfers between persons holding directly or indirectly
through DTC on the one hand, and directly or indirectly through Clearstream
customers or Euroclear participants, on the other, will be effected in DTC in
accordance with DTC's rules on behalf of the relevant European international
clearing system by its U.S. depositary; however, such cross-market transactions
will require delivery of instructions to the relevant European international
clearing system by the counterparty in such systems in accordance with its
rules and procedures and within its established deadlines (European time). The
relevant European international clearing system will, if the transaction meets
its settlement requirements, deliver instructions to its U.S. depositary to
take action to effect final settlement on its behalf by delivering or receiving
notes in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Clearstream
customers and Euroclear participants may not deliver instructions directly to
the U.S. depositaries.

    Because of time-zone differences, credits of notes received in Clearstream
Banking or Euroclear as a result of a transaction with a DTC participant will
be made during subsequent securities settlement processing and dated the
business day following the DTC settlement date. Such credits or any
transactions in such notes settled during such processing will be reported to
the relevant Clearstream customers or Euroclear participants on such business
day. Cash received in Clearstream Banking or Euroclear as a result of sales of
notes by or through a Clearstream customer or a Euroclear participant to a DTC
participant will be received with value on the DTC settlement date but will be
available in the relevant Clearstream or Euroclear cash account only as of the
business day following settlement in DTC.

    Although DTC, Clearstream Banking and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of notes among
participants of DTC, Clearstream Banking and Euroclear, they are under no
obligation to perform or continue to perform such procedures and such
procedures may be discontinued at any time.

                                      S-10
<PAGE>


                                  UNDERWRITING

    Motorola and the underwriters named below have entered into an underwriting
agreement and a terms agreement with respect to the notes. Subject to certain
conditions, each underwriter has severally agreed to purchase the principal
amount of the notes set forth in the following table.

<TABLE>
<CAPTION>
                                                                    Principal
                                                                    Amount of
                             Underwriters                             Notes
                             ------------                         --------------
      <S>                                                         <C>
      Goldman, Sachs & Co........................................ $
                                                                  --------------
          Total.................................................. $
                                                                  ==============
</TABLE>

    Notes sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus
supplement. Any notes sold by the underwriters to securities dealers may be
sold at a discount from the initial public offering price of up to      % of
the principal amount of the notes. Any such securities dealers may resell any
notes purchased from the underwriters to certain other brokers or dealers at a
discount from the initial public offering price of up to      % of the
principal amount of the notes. If all the notes are not sold at the initial
offering price, the underwriters may change the offering price and the other
selling terms.

    The notes are a new issue of securities with no established trading market.
We have been advised by the underwriters that the underwriters intend to make a
market in the notes but are not obligated to do so and may discontinue market
making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the notes.

    In connection with the offering, the underwriters may purchase and sell the
notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriters of a greater number of
notes than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the notes while the
offering is in progress.

    The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased the notes
sold by or for the account of such underwriter in stabilizing or short-covering
transactions.

    These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the notes. As a result, the price of the notes may
be higher than the price that otherwise might exist in the open market. If
these activities are commenced, they may be discontinued by the underwriters at
any time. These transactions may be effected in the over-the-counter market or
otherwise.

    Motorola estimates that its share of the total expenses of the offering of
the notes, excluding underwriting discounts and commissions, will be
approximately $        .

    Motorola has agreed to indemnify the several underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.

    From time to time, the underwriters and certain of their affiliates have
engaged, and may in the future engage, in transactions with, and perform
services for, us and our affiliates in the ordinary course of business.

                                      S-11
<PAGE>


                                 LEGAL MATTERS

    The validity of the notes will be passed upon for Motorola by Jeffrey A.
Brown of our Law Department and Winston & Strawn, Chicago, Illinois. As of
January 15, 2001, Mr. Brown owned approximately 900 shares of our common stock
and held options to purchase 19,400 shares of our common stock, of which
options to purchase 3,100 shares were currently exercisable. Certain legal
matters relating to the notes will be passed upon for the underwriters by
Mayer, Brown & Platt, Chicago, Illinois. Mayer, Brown & Platt provides legal
services to Motorola from time to time.

                                      S-12
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+                                                                              +
+    The information in this preliminary prospectus is not complete and may be +
+                                changed.                                      +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

              Subject to Completion. Dated January 23, 2001.

PROSPECTUS

                                 $2,000,000,000

                                [MOTOROLA LOGO]

                  Debt Securities and Debt Securities Warrants
                     Common Stock and Common Stock Warrants

                                  -----------

  We may use this prospectus to offer and sell securities from time to time.
The types of securities we may sell include:

  . unsecured senior debt
    securities               . common stock


  . unsecured subordinated   . 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:

  . offering price  In the case of
                    debt securities:    In the case of warrants:



  . size of
    offering        . interest rate     . the types of securities that may be
                                          acquired upon exercise


  . underwriting    . maturity
    discounts


                                        . expiration date

                    . ranking


  . denomination or                     . exercise price
    currency (other . whether they
    than with         may be redeemed
    respect to        prior to
    common stock)     maturity

                                        . 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 January   , 2001.
<PAGE>

                             ABOUT THIS PROSPECTUS

   This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. You
should read this prospectus and the applicable prospectus supplement together
with the additional information described below under the heading "Where You
Can Find More Information."

   The registration statement that contains this prospectus (including the
exhibits) contains additional important information about Motorola, Inc. and
the securities offered under this prospectus. Specifically, we have filed
certain legal documents that control the terms of the securities offered by
this prospectus as exhibits to the registration statement. We will file certain
other legal documents that control the terms of the securities offered by this
prospectus as exhibits to reports we file with the SEC. That registration
statement and the other reports can be read at the SEC web site or at the SEC
offices mentioned under the heading "Where You Can Find More Information."

                                       2
<PAGE>

                      WHERE YOU CAN FIND MORE INFORMATION

   We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file with the SEC at its public reference facilities at
450 Fifth Street, N.W., Washington, D.C. 20549. You can also obtain copies of
the documents at prescribed rates by writing to the Public Reference Section
of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the operation of the public
reference facilities. Our SEC filings are also available at the office of the
New York Stock Exchange. For further information on obtaining copies of our
public filings at the New York Stock Exchange, you should call (212) 656-5060.

   We "incorporate by reference" into this prospectus the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus and information that we file subsequently
with the SEC will automatically update this prospectus. We incorporate by
reference the documents listed below and any filings we make with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 after the initial filing of the registration statement that contains this
prospectus and prior to the time that we sell all the securities offered by
this prospectus:

  .  Annual Report on Form 10-K for the fiscal year ended December 31, 1999.

  .  Current Report on Form 8-K, dated January 5, 2000, as amended on March
     17, 2000.

  .  Current Report on Form 8-K, dated March 23, 2000, as amended on March
     24, 2000, June 2, 2000 and November 7, 2000.

  .  Quarterly Reports on Form 10-Q for the quarters ended September 30,
     2000, July 1, 2000 and April 1, 2000.

  .  The description of our 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 our preferred stock purchase rights included in the
     Registration Statement on Form 8-A dated November 5, 1998, as amended.

   You may request a copy of these filings (other than exhibits, unless that
exhibit is specifically incorporated by reference into that filing) at no
cost, by writing to or telephoning us at the following address:

                                A. Peter Lawson
                           Secretary, Motorola, Inc.
                           1303 East Algonquin Road
                          Schaumburg, Illinois 60196
                          Telephone: (847) 576-5000.

   You should rely only on the information contained or incorporated by
reference in this prospectus or the applicable prospectus supplement. We have
not authorized anyone else to provide you with different information. We may
only use this prospectus to sell securities if it is accompanied by a
prospectus supplement. We are only offering these securities in states where
the offer is permitted. You should not assume that the information in this
prospectus or the applicable prospectus supplement is accurate as of any date
other than the dates on the front of those documents.

                                       3
<PAGE>

                                  THE COMPANY

   Motorola is a global leader in providing integrated communications solutions
and embedded electronic solutions. These include:

  .  Software-enhanced wireless telephone, two-way radio, messaging and
     satellite communications products and systems, as well as networking and
     Internet-access products, for consumers, network operators, and
     commercial, government and industrial customers.

  .  Embedded semiconductor solutions for customers in networking,
     transportation, wireless communications and imaging and entertainment
     markets.

  .  Embedded electronic systems for automotive, communications, imaging,
     manufacturing systems, computer and industrial markets.

  .  Digital and analog systems and set-top terminals for broadband cable
     television operators.

   Motorola is a corporation organized under the laws of the State of Delaware
as the successor to an Illinois corporation organized in 1928. Motorola's
principal executive offices are located at 1303 East Algonquin Road,
Schaumburg, Illinois 60196 (telephone number (847) 576-5000).

                                USE OF PROCEEDS

   Unless the applicable prospectus supplement provides otherwise, we will use
the net proceeds from the sale of the offered securities for general corporate
purposes.

                      RATIOS OF EARNINGS TO FIXED CHARGES

   The following are the unaudited consolidated ratios of earnings to fixed
charges for each of the years in the five-year period ended December 31, 1999
and the nine months ended September 30, 2000:

<TABLE>
<CAPTION>
                                                                    Nine Months
                                         Year Ended December 31,       Ended
                                         ------------------------- September 30,
                                         1999 1998  1997 1996 1995     2000
                                         ---- ----  ---- ---- ---- -------------
<S>                                      <C>  <C>   <C>  <C>  <C>  <C>
Ratio of earnings to fixed charges...... 3.5  --(a) 6.3  5.2  12.0      4.8
</TABLE>
- --------
(a) Earnings were inadequate to cover fixed charges by $1.2 billion.

   For purposes of computing the ratios of earnings to fixed charges, we have
divided income before income tax expense plus fixed charges by fixed charges.
Fixed charges consist of interest costs and estimated interest included in
rentals (one-third of net rental expense).

                                       4
<PAGE>

                         DESCRIPTION OF DEBT SECURITIES

   The following is a general description of the debt securities that we may
offer from time to time. The particular terms of the debt securities offered by
any prospectus supplement and the extent, if any, to which the general
provisions described below may apply will be described in the applicable
prospectus supplement.

   The debt securities will be either senior debt securities or subordinated
debt securities. We will issue the "senior securities" under the "senior
indenture" dated May 1, 1995 between us and Bank One Trust Company, N.A., as
successor trustee to BNY Midwest Trust Company and Harris Trust and Savings
Bank, as trustee (or any further successor trustee). We will issue the
"subordinated securities" under a "subordinated indenture" between us 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 our subsidiaries.

General

   The senior securities are unsubordinated obligations of the company. They
will be unsecured and will rank equally with each other and all of our other
unsubordinated debt, unless otherwise indicated in the applicable prospectus
supplement. (section 301 of the senior indenture.) Each applicable prospectus
supplement will set forth, as of the most recent practicable date, the
aggregate amount of outstanding debt that would rank junior to the senior
securities. The subordinated securities are subordinated in right of payment to
the prior payment in full of our senior indebtedness. 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.) We will set
forth in each applicable prospectus supplement, as of the most recent
practicable date, the aggregate amount of our outstanding debt that would rank
senior to the subordinated securities. The indentures do not limit the
aggregate principal amount of debt securities that we may issue thereunder and
provide that we may issue debt securities 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 us;

                                       5
<PAGE>

  .  our obligation, if any, to redeem the offered securities and any
     requirement to maintain a "sinking fund" to support such obligation;

  .  the currency or currencies in which we will pay principal or interest;

  .  any conversion features; and

  .  whether the defeasance or covenant defeasance provisions of the
     applicable indenture apply.

   We 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 our obligations exclusively. Since our
operations are partially conducted through subsidiaries, primarily overseas,
our cash flow and therefore our ability to service debt, including the debt
securities offered by the applicable prospectus supplement, are partially
dependent upon the earnings of our subsidiaries and the distribution of those
earnings to, or upon loans or other payments of funds by those subsidiaries to,
us. Our 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 us to repay our obligations, whether by dividends, loans
or other payments. In addition, the payment of dividends and the making of
loans and advances to us by our subsidiaries may be subject to statutory or
contractual restrictions, are contingent upon the earnings of those
subsidiaries and are subject to various business considerations.

   Any right of ours to receive assets of any of our 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 our ability to incur indebtedness or that would afford holders of
debt securities protection in the event of a highly leveraged or similar
transaction involving us. However, the indentures do restrict us and our
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 we 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 we can issue under either indenture, and we already
have issued a significant amount of debt securities under the senior indenture.

Defeasance and Covenant Defeasance

   Under the indentures, we have the ability to take certain steps to effect a
"defeasance" or a "covenant defeasance." A defeasance allows us 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 agencies and to hold monies for
payment in trust. A covenant defeasance allows us to stop complying with
certain restrictive covenants relating to:

  .  consolidation, merger, conveyance, transfer or lease;

                                       6
<PAGE>

  .  maintenance of our 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, we 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. We 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.

   We may only effect a defeasance or a covenant defeasance if we have provided
a legal opinion that such action will not cause holders of our 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. The 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.

   We may further describe in the applicable prospectus supplement 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 we 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, we 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, would not exceed 5% of the Consolidated Net
Tangible Assets of us and our consolidated subsidiaries. See "--Restrictive
Covenants--Restrictions on Sales and Leasebacks" below.

   This restriction does not apply to, and there will be excluded from secured
Debt in any computation under such restriction, Debt secured by:

  .  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 us or a
     Domestic Subsidiary;

  .  Mortgages in favor of us or a Domestic Subsidiary;

  .  Mortgages in favor of governmental bodies to secure progress or advance
     payments;

  .  Mortgages on property, shares of stock or Debt existing at the time of
     acquisition thereof, including acquisition through merger or
     consolidation;

  .  purchase money Mortgages and Mortgages to secure the construction cost
     of property; and

  .  any extension, renewal or refunding of any Mortgage referred to above.

                                       7
<PAGE>

 Restrictions on Sales and Leasebacks

   Neither we 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:

  .  we 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

  .  within 120 days, we apply to the retirement of our Funded Debt an amount
     not less than the greater of:

    .  the net proceeds of the sale of the Principal Property leased
       pursuant to such arrangement; or

    .  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:

  .  between us and a Domestic Subsidiary or between Domestic Subsidiaries;
     or

  .  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
from that net amount:

  .  all current liabilities, excluding any constituting Funded Debt by
     reason of their being renewable or extendable; and

  .  goodwill and other intangibles. (section 1010 of each indenture.)

   "Domestic Subsidiary" means a Subsidiary of ours except a Subsidiary of ours
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 our operations or our Subsidiaries,
or both, outside the United States.

   "Principal Property" includes any single parcel of real estate, any
manufacturing plant or warehouse we own or lease or any Domestic Subsidiary
owns or leases 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
of any manufacturing plant or warehouse:

  .  which is a pollution control or other facility financed by obligations
     issued by a state or local government unit; or

  .  which, in the opinion of our board of directors, is not of material
     importance to the total business conducted by us and our subsidiaries as
     an entirety.

                                       8
<PAGE>

   "Subsidiary" means a corporation, a majority of the outstanding voting stock
of which is owned, directly or indirectly, by us or by one or more of our other
Subsidiaries.

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;

  .  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 ours 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.)

   We will be required to furnish to the trustee an annual statement as to our
performance of certain of our 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 us 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, except 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;

                                       9
<PAGE>

  .  reduce the principal amount of, or premium, if any, or interest, if any,
     on, any debt security;

  .  reduce the amount of principal of any original issue discount debt
     security payable upon acceleration of the maturity thereof;

  .  change the place or currency of payment of principal of, or premium, if
     any, or interest, if any, on, any debt security;

  .  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, our compliance 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, we may not modify or amend the subordination provisions of the
subordinated indenture without the consent of the holders of each outstanding
subordinated debt security affected thereby. Further, no modification or
amendment of that type may adversely affect the rights under article sixteen of
the subordinated indenture of the holders of senior indebtedness then
outstanding without the consent of the requisite holders of senior indebtedness
required under 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.) The trustee for those debt securities may call a meeting at any
time or upon our request or the request of 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, and except as described below, 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. 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, except for any consent that must be given by each holder of a debt
security affected, 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. Further,
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

                                       10
<PAGE>

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. However, 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

   We may, without the consent of any holders of outstanding debt securities,
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 our assets
substantially as an entirety to, us, provided that:

  .  the entity other than us formed by such consolidation or into which we
     are merged or which acquires or leases our assets is organized and
     existing under the laws of any United States jurisdiction and assumes
     our obligations on the debt securities and under the applicable
     indenture;

  .  after giving effect to the 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 as
     to any series of debt securities as to which such event of default or
     such event has happened and is continuing; and

  .  certain other conditions are met. (article eight of each indenture.)

Form, Denominations, Exchange, Registration and Transfer

   We may issue debt securities as registered securities or bearer securities,
and may be issued in global form. Global securities are described below under
"--Global Securities." Unless we otherwise provide in the applicable prospectus
supplement, we will issue registered securities in denominations of $1,000 and
integral multiples thereof and we will issue bearer securities in denominations
of $5,000 and integral multiples thereof. Unless we otherwise indicate in the
applicable prospectus supplement, bearer securities will have interest coupons
attached. (section 201 of each indenture.)

   Our registered securities will be exchangeable for other registered
securities of the same series. In addition, if we issue a series of debt
securities as both registered securities and bearer securities, subject to
certain conditions, holders may exchange bearer securities for registered
securities. Our registered securities generally may not be exchanged for bearer
securities unless we provide for such an exchange in the applicable prospectus
supplement. (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, requires us to obtain written
certification from the initial purchaser of a bearer security to the effect
that:

  .  the bearer security is not being acquired by or on behalf of a United
     States person;

  .  if a beneficial interest in the bearer security is being acquired by or
     on behalf of a United States person, that the United States person is a
     foreign branch of a United States financial institution that is
     purchasing for its own account or for resale or the 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 Internal Revenue Code;
     or

  .  the bearer security is being acquired by a United States or foreign
     financial institution for resale during the restricted period 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 we designate
without service charge and upon payment of any taxes and other

                                       11
<PAGE>

governmental charges. (section 305 of each indenture.) We may change transfer
agents or designate additional transfer agents at any time, except that, if we
have issued a series of debt securities solely as registered securities, we
must maintain a transfer agent in each place of payment for such series and,
if we have issued a series of debt securities as bearer securities, we must
maintain a transfer agent in a place of payment for such series located
outside the United States. (section 1002 of each indenture.)

   If we elect or are required to redeem or exchange particular debt
securities, we will not be required to:

  .  issue, register the transfer of or exchange those debt securities for a
     period of 15 days before the first publication or mailing of the notice
     of redemption or exchange;
  .  register the transfer of or exchange any registered security selected
     for redemption; or
  .  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, we will deposit with, or on behalf of, the depositary and
will register in the name of the depositary or a nominee of the depositary one
or more "global securities" to represent the debt securities of each series.
Unless we otherwise indicate in the prospectus supplement relating to a series
of debt securities, The Depository Trust Company will act as the depositary
and we will deposit the global securities with, or on behalf of, DTC or its
nominee, and we will register registered securities 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, generally known as DTC participants. Ownership of
beneficial interests in a global security will be limited to DTC participants
or persons that may hold interests through DTC 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 DTC participants and records of DTC
participants, with respect to interests of persons who hold through DTC
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.

   We will make payments of principal of and any interest, and premium, if
any, on individual debt securities represented by a global security 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 we nor the
trustee, nor any of our agents 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.

   We have been advised by DTC that, upon receipt of any payment in respect of
a global security, DTC will immediately credit DTC participants' accounts for
their pro rata share of such payments. We also expect that

                                      12
<PAGE>

payments by DTC participants to owners of beneficial interests in global
securities held through such DTC 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 DTC 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 us 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;

  .  we instruct 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 the names DTC directs. 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 we issue debt securities subsequently 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 we
maintain 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 DTC participant, on the
procedures of the DTC 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 DTC
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. We understand that under existing
industry practices in the event that we request 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 DTC participants holding the relevant
beneficial interests to give or take such action, and such DTC participants
would authorize beneficial owners owning through such DTC participants to give
or take such action or would otherwise act upon the instructions of beneficial
owners through them.

   DTC has advised us 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.

                                      13
<PAGE>

  .  DTC holds securities that DTC participants deposit with DTC.

  .  DTC also facilitates the settlement among DTC participants of securities
     transactions, such as transfers and pledges in deposited securities
     through electronic computerized book-entry changes in DTC participants'
     accounts, thereby eliminating the need for physical movement of
     securities certificates.

  .  Direct DTC participants include securities brokers and dealers, banks,
     trust companies, clearing corporations and certain other organizations.
     DTC is owned by a number of direct DTC 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 DTC participant, either
     directly or indirectly.

  .  The rules applicable to DTC and DTC participants are on file with the
     SEC.

   According to DTC, the foregoing information with respect to DTC has been
provided to the industry for informational purposes only and is not intended to
serve as a representation, warranty or contract modification of any kind.

Payment and Paying Agents

   Unless the applicable prospectus supplement provides otherwise, the place of
payment for all registered securities will be Chicago, Illinois, U.S.A., and we
will initially designate the corporate trust office of the applicable trustee
for this purpose. At our option, we may pay interest, if any, on registered
securities by check mailed to the address of the person entitled thereto as
such person's address appears in the security register or 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, we will make payment of any installment of interest on registered
securities 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 we issue bearer securities, we 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, we will make payments with respect to
bearer securities, at the holder's option, by check in the currency designated
in the bearer security presented or mailed to an address outside the United
States or paid by wire transfer to an account in such currency maintained at a
bank located outside the United States. We will not make payments in the United
States. (sections 307 and 1002 of each indenture.) Nevertheless, we will make
payments with respect to bearer securities payable in U.S. dollars at the
office of our paying agent in Chicago, Illinois if, but only if, payment
outside the United States is illegal or effectively precluded by exchange
controls or other similar restrictions and the trustee has received an opinion
of counsel that such payment within the United States is legal. (sections 307
and 1002 of each indenture.) Unless the applicable prospectus supplement
provides otherwise, we will make payment of installments of interest on any
bearer securities on or before maturity only against surrender of coupons for
such interest installments as they mature. (section 1001 of each indenture.)

   Unless the applicable prospectus supplement provides otherwise, we 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:

  .  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;

  .  is the euro and ceases to be used both within the European Monetary
     Union and for the settlement of transactions by public institutions of
     or within the European Union; or

                                       14
<PAGE>

  .  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.)

   We 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 our request, be repaid to us, or discharged from trust, and the
holder of such debt security may thereafter look only to us for payment
thereof. (section 1003 of each indenture.)

Subordinated Indenture Provisions

   Our 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 ours. (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 us, 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:

    .  that such debt is not senior in right of payment to the subordinated
       securities; or

    .  that such debt is subordinated to any other debt of ours, unless
       such debt expressly provides that such debt is senior in right of
       payment to the subordinated securities;

  .  debt of ours in respect of the subordinated securities;

  .  debt of ours in respect of our outstanding Liquid Yield Option(TM) Notes
     due 2009 and our outstanding Liquid Yield Option(TM) Notes due 2013,
     which 2009 LYONs and 2013 LYONs rank on a parity with the subordinated
     securities;

  .  debt of ours in respect of the extension notes which may be issued in
     the future, at specified dates, in respect of the 2009 LYONs and in
     payment of the purchase price thereof, which extension notes would rank
     on a parity with the subordinated securities and any 2009 LYONs and 2013
     LYONs remaining outstanding (section 101 of the subordinated indenture);
     and

  .  debt of ours in respect of our 6.68% deferrable interest junior
     subordinated debentures due March 31, 2039 representing a long-term loan
     made to us by Motorola Capital Trust I, a Delaware statutory business
     trust and our wholly-owned subsidiary, and our obligations related to
     our 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:

  .  the aggregate amount of consolidated indebtedness outstanding as of the
     most recent practicable date that would constitute either senior debt or
     indebtedness of our subsidiaries;

  .  the aggregate amount of outstanding indebtedness as of the most recent
     practicable date that would rank on a parity with the subordinated
     securities; and

  .  any then-existing limitation on the issuance of additional senior debt.
- --------
(TM)Trademark of Merrill Lynch & Co.
SM"Trust Originated Preferred Securities" and "TOPrS" are service marks of
   Merrill Lynch & Co., Inc.

                                       15
<PAGE>

   By reason of such subordination, in the event of dissolution, insolvency,
bankruptcy or other similar proceedings, upon any distribution of assets:

  .  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;

  .  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

  .  our creditors 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 1602 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 we would be obligated to promptly notify holders of senior
debt of such acceleration. Unless the applicable prospectus supplement provides
otherwise, we 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 1603 of the subordinated indenture.)

   Unless the applicable prospectus supplement provides otherwise, we may not
make any payment of the principal, and premium, if any, or interest, if any,
with respect to any of the subordinated securities, except we may acquire
subordinated securities for our 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 we receive notice of the default, unless 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 the
terms of the subordinated indenture otherwise permit the payment or acquisition
of the subordinated securities at that time. (section 1604 of the subordinated
indenture.)

The Trustee

   Bank One Trust Company, N.A. (as successor trustee to BNY Midwest Trust
Company and Harris Trust and Savings Bank) is trustee under:

  .  the senior indenture relating to:

    .  our 5.80% notes due October 15, 2008;

    .  our 7 5/8% notes due November 15, 2010;

    .  our 7 1/2% debentures due May 15, 2025;

    .  our 6 1/2% debentures due September 1, 2025;

    .  our 6 1/2% debentures due November 15, 2028; and

    .  our 5.22% debentures due October 1, 2097.

   Bank One Trust Company, N.A. (as successor in interest to the First National
Bank of Chicago) is trustee under:

  .  an indenture with us dated as of September 1, 1989 relating to our 2009
     LYONs; and

  .  an indenture with us dated as of September 1, 1993 relating to our 2013
     LYONs.

   We maintain various banking relationships with Bank One, N.A., an affiliate
of the trustee. As one of our principal commercial banks, Bank One, N.A.
provides several foreign exchange and cash management services to us and has
extended several credit facilities to us. Bank One, N.A. is also an issuing and
paying agent for various commercial paper we have issued.

                                       16
<PAGE>

                          DESCRIPTION OF CAPITAL STOCK

   The following description of our capital stock is subject to the detailed
provisions of our restated certificate of incorporation, as amended, and
bylaws, as amended, and to the rights agreement described 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

   Our authorized capital stock consists of 4,200,000,000 shares of common
stock, par value $3 per share, and 500,000 shares of preferred stock, par value
$100 per share, issuable in series. There are no shares of preferred stock
presently outstanding. Our board of directors 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 our certificate of
incorporation. The holders of shares of our common stock are entitled to one
vote for each share held and each share of our common stock is entitled to
participate equally in dividends out of funds legally available therefor, as
and when declared by our board of directors, and in the distribution of assets
in the event of liquidation. The shares of our common stock have no preemptive
or conversion rights, redemption provisions or sinking fund provisions. The
outstanding shares of our common stock are duly and validly issued, fully paid
and nonassessable, and any shares of our common stock issued in an offering
pursuant to this prospectus and any shares of common stock issuable upon the
exercise of common stock warrants or conversion or exchange of debt securities
which are convertible into or exchangeable for our common stock, will be duly
and validly issued, fully paid and nonassessable.

Preferred Stock Purchase Rights

   On November 5, 1998, we authorized a new rights agreement between us and
Harris Trust and Savings Bank, as rights agent 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 our common stock is
accompanied by a preferred stock purchase right. Each right entitles the
registered holder to purchase from us one thirty-thousandth of a share, as
adjusted to reflect our 3-for-1 stock split in the form of a 200% stock
dividend paid on June 1, 2000, of our Junior Participating Preferred Stock,
Series B, $100 par value per share, at a price of $66.66 per one thirty-
thousandth, or $200 per one ten-thousandth, of a preferred share, subject to
adjustment. The rights attach to shares of our common stock outstanding as of
the close of business on November 20, 1998 and to shares of our common stock
which become outstanding thereafter prior to the earliest of the distribution
date, 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 us 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 our board
of directors because of the ability of our board of directors to redeem the
rights.

   Until the earlier to occur of 10 days following a public announcement that a
person or group of affiliated or associated persons (referred to herein as an
"acquiring person") acquired, or obtained the right to acquire, beneficial
ownership of 10% or more of the outstanding shares of our common stock and 10
days following the commencement or announcement of a tender offer or exchange
offer for 10% or more of such outstanding

                                       17
<PAGE>

shares of our common stock (the earlier of such dates being called the
"distribution date"), the rights will be evidenced, with respect to any of our
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 our
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:

  .  in an offering pursuant to this prospectus;

  .  upon exercise of any common stock warrants; or

  .  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 our 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 our common stock
represented by such certificate. As soon as practicable following the
distribution date, we will mail separate certificates evidencing the rights 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 we earlier redeemed them 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:

  .  in the event of a stock dividend on, or a subdivision, combination or
     reclassification of, the common stock;

  .  upon the grant to holders of our common stock of certain rights or
     warrants to subscribe for common stock or convertible securities at less
     than the current market price of our common stock;

  .  upon the distribution to holders of our common stock of evidences of
     indebtedness or assets, excluding regular periodic cash dividends; and

  .  in connection with any recapitalization of us.

   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 our preferred shares, but for a number of
shares of our common stock, or, in certain cases, fractional our 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, we are involved in a merger or other
business combination in which:

  .  we are not the surviving corporation;

  .  our common stock is changed or exchanged; or

  .  50% or more of our 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.

                                       18
<PAGE>

   In addition, at any time after a triggering event and before a person has
acquired beneficial ownership of 50% or more of our outstanding common stock,
we 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 our common stock, or one thirty-thousandth,
subject to adjustment, of a preferred share, or other common stock equivalent,
per right.

   At any time prior to a triggering event, our board of directors may redeem
the rights in whole, but not in part, at a price of $.0033 per right, as
adjusted to reflect our 3-for-1 stock split in the form of a 200% stock
dividend paid on June 1, 2000. Immediately upon the action of our 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 amount.

   Until a right is exercised, the holder thereof, as such, will have no rights
as one of our stockholders, including, without limitation, the right to vote or
to receive dividends.

   At any time prior to a triggering event, we may amend or supplement the
rights agreement without the approval of the rights agent or any holder of the
rights. Thereafter, no amendment may adversely affect the interests of the
rights holders, other than an acquiring person.

   The preferred shares purchasable upon exercise of the rights will not be
redeemable. Each preferred share will be entitled to a minimum preferential
quarterly dividend payment equal to the greater of $250 per share and 30,000
times the dividend declared per share of our common stock. In the event of
liquidation, the holders of our preferred shares will be entitled to a minimum
preferential liquidation payment equal to the greater of $1,000 per share and
30,000 times the payment made per share of our common stock. Each preferred
share will have 30,000 votes per share, voting together with the common stock.
In the event of any merger, consolidation or other transaction in which our
common stock is exchanged, each preferred share will be entitled to receive
30,000 times the amount received per share of our common stock.

   Because of the nature of the preferred shares' dividend, liquidation and
voting rights, the value of the one thirty-thousandth interest in a preferred
share that may be purchased upon exercise of each right should approximate the
value of one share of our 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 thirty-thousandth of a preferred
share, which may, at our election, be evidenced by depositary receipts, and in
lieu thereof, an adjustment in cash will be made based on the market price of
our common stock or preferred shares on the last trading day prior to the date
of exercise.

                                       19
<PAGE>

                       DESCRIPTION OF SECURITIES WARRANTS

   We may issue warrants for the purchase of our debt securities or common
stock, either independently or together with debt securities. We will issue
each series of warrants under a separate warrant agreement between us and a
bank or trust company, as agent. The warrant agent will act solely as our agent
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 the 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 the 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 ours to redeem or accelerate the
     exercisability of such warrants;

  .  whether the warrants are to be issued with any other securities;

  .  the offering price; and

  .  any other terms of the warrants.

   If we offer warrants for the purchase of our common stock, the applicable
prospectus supplement will describe their terms, which may include the
following:

  .  the title and aggregate number of the warrants and whether the 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 ours to redeem the warrants;

  .  the date, if any, on and after which the warrants and any related series
     of debt securities will be transferable separately;

                                       20
<PAGE>

  .  when the warrants may be exercisable and the expiration date;

  .  the terms of any right of ours to accelerate the exercisability of the
     warrants;

  .  United States federal income tax consequences; and

  .  any other terms of the warrants.

   Warrants for the purchase of our 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 our common stock,
holders of such warrants will not have any rights of holders of our common
stock purchasable upon such exercise, including the right to receive payments
of dividends, if any, on our 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 our 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, we will, as soon as
practicable, issue and deliver the underlying debt securities or our 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, we 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 our common stock purchased upon
exercise of a warrant.

Modifications

   The warrant agreements and the terms of the warrants may be modified or
amended by us 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 we deem necessary or desirable and that will not materially adversely
affect the interests of the holders of the warrants.

   Together with the warrant agent, we 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. No
modification or amendment of that type 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.

                                       21
<PAGE>

Common Stock Warrant Adjustments

   The terms and conditions on which the exercise price of and/or the number of
shares of our 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 our common stock covered by the warrant;

  .  the events requiring an adjustment;

  .  the events upon which we may, in lieu of making an adjustment, make
     proper provisions so that the holder of the warrant, upon its exercise,
     would be treated as if the holder had exercised the warrant prior to the
     occurrence of the events; and

  .  provisions affecting exercise in the event of certain events affecting
     our common stock.

                                       22
<PAGE>

                              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 our 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.

                                       23
<PAGE>

                                 LEGAL MATTERS

   Certain legal matters will be passed upon for us by Jeffrey A. Brown of our
Law Department and Winston & Strawn, Chicago, Illinois. As of January 15, 2001,
Mr. Brown owned approximately 900 shares of our common stock and held options
to purchase 19,400 shares of our common stock, of which options to purchase
3,100 shares were currently exercisable.

                                    EXPERTS

   The consolidated financial statements and schedule of Motorola and
subsidiaries as of December 31, 1999 and 1998 and for each of the years in the
three-year period ended December 31, 1999 have been incorporated by reference
herein and in the registration statement in reliance upon the reports of KPMG
LLP, independent certified public accountants, incorporated by reference herein
and in the registration statement, and upon the authority of said firm as
experts in auditing and accounting.

   The financial statements and the related financial statement schedules
incorporated herein by reference from the General Instrument Corporation Annual
Report on Form 10-K for the year ended December 31, 1998 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which
is incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.

                                       24
<PAGE>


- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

    No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the Notes offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.

                                 ------------

                               TABLE OF CONTENTS
                             Prospectus Supplement

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
Use of Proceeds............................................................  S-3
Capitalization.............................................................  S-3
Summary Consolidated Financial Data........................................  S-4
Recent Developments........................................................  S-5
Description of the Notes...................................................  S-6
Underwriting............................................................... S-11
Legal Matters.............................................................. S-12

                                   Prospectus

About This Prospectus......................................................    2
Where You Can Find More Information........................................    3
The Company................................................................    4
Use of Proceeds............................................................    4
Ratios of Earnings to Fixed Charges........................................    4
Description of Debt Securities.............................................    5
Description of Capital Stock...............................................   17
Description of Securities Warrants.........................................   20
Plan of Distribution.......................................................   23
Legal Matters..............................................................   24
Experts....................................................................   24
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                                    $

                                 Motorola, Inc.


                             % Notes due       , 2006

                                 ------------

                                [MOTOROLA LOGO]

                                 ------------

                              Goldman, Sachs & Co.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+  The information in this preliminary prospectus is not complete and may be   +
+                                   changed.                                   +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                 Subject to Completion. Dated January 23, 2001.

          Prospectus Supplement to Prospectus dated January   , 2001.

                    $

                                [MOTOROLA LOGO]

             Puttable Reset Securities PURSSM due           , 2011

                                  -----------

  We will pay interest semi-annually on the PURS on            and
of each year to and including           , 2003, beginning on           , 2001.
Interest on the PURS will accrue at an initial interest rate of   % until
          , 2003. On            , 2003 and every          thereafter on which
PURS remain outstanding until and including            , 2010, the interest
rate may be reset at a rate to be determined as described in this prospectus,
with interest being paid at such interest rates annually on each subsequent
            on which PURS remain outstanding, to and including           ,
2011.

  On           , 2003 and every            thereafter until and including
          , 2010, one of two things will happen. Either:

  . Goldman, Sachs & Co. will exercise its right to purchase all the PURS from
    you at 100% of their principal amount; or

  . We will automatically repurchase the PURS from you at 100% of their
    principal amount, subject to the right of holders to continue to hold
    their PURS under circumstances described in this prospectus.

These purchase rights and obligations are subject to the requirements and
exceptions described in this prospectus.

  Subject to our obligation to repurchase the PURS from you, the PURS will
mature on            , 2011. We may not redeem the PURS prior to maturity and
the PURS are not entitled to the benefit of any sinking fund.

  The PURS are unsecured and rank equally with all of our other unsecured
senior indebtedness. The PURS will be issued only in registered form in
denominations of $1,000 and integral multiples of $1,000.

  The PURS are not listed on any securities exchange, and we do not intend to
list the PURS on any securities exchange.

  Concurrent with this offering, we are offering $            of     % notes
due           , 2006 pursuant to a separate prospectus. The offerings of the
PURS and of the notes are not contingent upon each other.

                                  -----------

  Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus supplement. Any representation to the contrary is a
criminal offense.

                                  -----------

<TABLE>
<CAPTION>
                                                           Per PURS    Total
                                                           -------- -----------
<S>                                                        <C>      <C>
Initial public offering price.............................      %   $
Underwriting discount.....................................      %   $
Proceeds, before expenses, to Motorola....................      %   $
</TABLE>

  The initial public offering price set forth above does not include accrued
interest, if any. Interest on the PURS will accrue from           , 2001 and
must be paid by the purchaser if the PURS are delivered after           , 2001.

                                  -----------

  The underwriters expect to deliver the PURS in book-entry form only through
the facilities of The Depository Trust Company against payment in New York, New
York on         , 2001.

  PURSSM is a service mark of Goldman, Sachs & Co.

Goldman, Sachs & Co.

                                  -----------

                 Prospectus Supplement dated January   , 2001.
<PAGE>

                                USE OF PROCEEDS

    The net proceeds to be received by us from the offering, after deducting
the underwriting discount and estimated expenses, are estimated to be
approximately $      million. The aggregate net proceeds from the offering of
the PURS, together with $    million of estimated net proceeds from the
concurrent sale of our     % notes due 2006 pursuant to a separate prospectus,
will be used to reduce short-term indebtedness and for general corporate
purposes. On January 19, 2001, we had outstanding approximately $6.7 billion of
commercial paper, with a weighted average maturity of approximately 100 days
and bearing a weighted average interest rate of approximately 6.4% per annum.

                                 CAPITALIZATION

    The following table sets forth our consolidated short-term debt and
capitalization as of September 30, 2000, and as adjusted to give effect to the
sale of the PURS and the concurrent sale of our     % notes due 2006, and the
anticipated application of the estimated net proceeds therefrom to reduce
short-term indebtedness. From time to time, we may issue additional debt or
equity securities. The following information should be read in conjunction with
our consolidated financial statements, including the notes thereto, which are
incorporated herein by reference. See "Where You Can Find More Information" in
the accompanying prospectus.

<TABLE>
<CAPTION>
                                                           September 30, 2000
                                                           --------------------
                                                           Actual   As Adjusted
                                                           -------  -----------
                                                             (in millions of
                                                                dollars)
<S>                                                        <C>      <C>
Short-Term Debt
  Commercial paper(a)..................................... $ 5,257    $
  Notes payable and other short-term debt.................     --         --
  Current portion of long-term debt.......................       5          5
                                                           -------    -------
    Total short-term debt................................. $ 5,262    $
                                                           =======    =======
Long-Term Debt(b)
  Senior notes and debentures(c).......................... $ 2,981    $ 2,981
  Other senior debt.......................................     130        130
  PURS offered hereby.....................................     --
      % notes due 2006 offered concurrently...............     --
  Less current portion of long-term debt..................      (5)        (5)
                                                           -------    -------
    Total long-term debt..................................   3,106
                                                           -------    -------
Company-obligated mandatorily redeemable preferred
 securities of subsidiary trust holding solely company-
 guaranteed debentures....................................     484        484
Stockholders' Equity(d)
  Preferred stock (none issued)...........................     --         --
  Common stock............................................   6,554      6,554
  Additional paid-in capital..............................     928        928
  Retained earnings.......................................   9,680      9,680
  Non-owner changes to equity.............................   3,496      3,496
                                                           -------    -------
    Total stockholders' equity............................  20,658     20,658
                                                           -------    -------
      Total capitalization................................ $24,248    $
                                                           =======    =======
</TABLE>
- --------
(a) On January 19, 2001, we had outstanding approximately $6.7 billion of
    commercial paper. Assuming all of the aggregate net proceeds from the
    concurrent offerings of PURS and notes are used to reduce short-term
    indebtedness, approximately $    billion of commercial paper would be
    outstanding following the consummation of the concurrent offerings.
(b) For additional information on long-term debt, see Note 4 of the Notes to
    Consolidated Financial Statements for December 31, 1999, included in our
    Current Report on Form 8-K/A filed with the Securities and Exchange
    Commission on June 2, 2000 and incorporated by reference herein.
(c) The amount of "As Adjusted" senior notes and debentures should be further
    adjusted to reflect the November 13, 2000 issuance of $1.2 billion of our 7
    5/8% notes due November 15, 2010, which are unsecured and rank equally with
    all of our other unsecured senior indebtedness, including the PURS offered
    hereby. The net proceeds to us from the issuance and sale of the 7 5/8%
    notes were $1.189 billion. We used these proceeds to reduce short-term
    indebtedness.
(d) Given the recent volatility experienced in the equity markets, and
    particularly in the technology sector in which we have significant
    strategic investments, our period-to-period stockholders' equity is subject
    to fluctuations caused by changes in the market values of our investments.
    For additional information on stockholders' equity, see the Consolidated
    Financial Statements for December 31, 1999, included in our Current Report
    on Form 8-K/A filed with the Securities and Exchange Commission on June 2,
    2000 and incorporated by reference herein, and Note 3 thereto.

                                      S-3
<PAGE>

                      SUMMARY CONSOLIDATED FINANCIAL DATA
                            (in millions of dollars)

   The summary consolidated financial data of Motorola as of December 31, 1999
and 1998 and for the years ended December 31, 1999, 1998 and 1997 has been
derived from consolidated financial statements of Motorola which have been
audited by KPMG LLP, independent auditors, and incorporated by reference herein
from Motorola's Current Report on Form 8-K/A filed with the Securities and
Exchange Commission on June 2, 2000. The summary consolidated financial data of
Motorola as of December 31, 1997, 1996 and 1995 and for the years ended
December 31, 1996 and 1995 has been derived from audited consolidated financial
statements of Motorola audited by KPMG LLP, independent auditors, and of
General Instrument Corporation audited by Deloitte & Touche LLP, independent
auditors, previously filed with the Securities and Exchange Commission, but not
incorporated by reference herein. The summary consolidated financial data as of
and for the nine months ended September 30, 2000 and October 2, 1999, has been
derived from unaudited consolidated financial statements filed with the
Securities and Exchange Commission and incorporated by reference herein and, in
the opinion of management, contains all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of Motorola's
financial position and results of operations as of and for such periods.
Operating results for the nine months ended September 30, 2000, are not
necessarily indicative of the results that may be expected for the entire year
ending December 31, 2000. See "Recent Developments." This information is
qualified in its entirety by, and should be read in conjunction with, the
consolidated financial statements, the notes thereto, and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" for
Motorola incorporated by reference herein.

<TABLE>
<CAPTION>
                         Nine Months Ended          Year Ended December 31,
                         ------------------ -----------------------------------------
                         Sept 30,   Oct 2,
                           2000      1999    1999     1998     1997    1996    1995
                         --------- -------- -------  -------  ------- ------- -------
<S>                      <C>       <C>      <C>      <C>      <C>     <C>     <C>
Operating Results (1)
  Net sales............. $ 27,516  $ 23,989 $33,075  $31,340  $31,498 $29,657 $28,495
  Manufacturing and
   other costs of
   sales................   16,838    14,612  20,631   19,396   18,532  17,854  16,345
  Selling, general and
   administrative
   expenses.............    3,674     4,226   5,446    5,656    5,373   5,027   4,916
  Restructuring and
   other charges........       --        --    (226)   1,980      327      --      --
  Research and
   development
   expenditures.........    3,293     2,528   3,560    3,118    2,930   2,572   2,321
  Depreciation expense..    1,718     1,680   2,243    2,255    2,394   2,367   1,961
  Interest expense,
   net..................      175       118     138      215      136     211     172
   Total costs and
    expenses............   25,698    23,164  31,792   32,620   29,692  28,031  25,715
  Net gain on Nextel
   asset exchange.......       --        --      --       --       --      --     443
  Earnings (loss) before
   income taxes.........    1,818       825   1,283   (1,280)   1,806   1,626   3,223
  Income tax provision
   (benefit)............      635       257     392     (373)     642     568   1,171
  Net earnings (loss)... $  1,183  $    568 $   891  $  (907) $ 1,164 $ 1,058 $ 2,052
Balance Sheet (1)
  Total assets.......... $ 44,177  $ 36,895 $40,489  $30,951  $28,954 $25,665 $24,086
  Working capital.......    3,953     4,765   4,679    2,532    4,597   3,696   2,938
  Long-term debt and
   redeemable preferred
   securities...........    3,590     3,598   3,573    2,633    2,144   1,931   1,949
  Total debt and
   redeemable preferred
   securities...........    8,852     5,093   6,077    5,542    3,426   3,328   3,554
  Total stockholders'
   equity...............  $20,658   $16,435 $18,693  $13,913  $14,487 $12,843 $11,911
</TABLE>
- -------
(1) These figures have been restated to reflect the merger with General
    Instrument Corporation, which has been accounted for as a pooling-of-
    interests.

                                      S-4
<PAGE>

                              RECENT DEVELOPMENTS

Recent Earnings

    On January 10, 2001, we reported unaudited financial results for the fiscal
quarter and year ended on December 31, 2000.

  . We reported sales of $10.06 billion in the fourth quarter of 2000, up 11
    percent from $9.09 billion a year earlier.

  . Excluding special items, net earnings were $335 million in the fourth
    quarter of 2000, or 15 cents per share, compared with net earnings of
    $565 million, or 25 cents per share, in the fourth quarter of 1999. In
    the fourth quarter of 2000, we reported special items resulting in a net
    charge of $68 million pre-tax, or $200 million (equal to 9 cents per
    share) after-tax. Charges were incurred primarily relating to the
    discontinuation of older wireless telephone products as part of an
    ongoing product portfolio simplification strategy and the downsizing of
    various manufacturing operations. The charges were largely offset by
    gains from the sale of investments during the quarter. In the fourth
    quarter of 1999, we reported special items resulting in a net charge of
    $351 million pre-tax, or 10 cents per share after-tax. Including special
    items, fourth-quarter 2000 earnings were $135 million, or 6 cents per
    share, compared with $323 million, or 15 cents per share a year ago.

  . For the full-year 2000, sales from ongoing operations increased 17
    percent to $37.6 billion from $32.0 billion in 1999. Including sales
    from businesses sold in 1999, sales increased 14 percent from $33.1
    billion a year ago.

  . Full-year earnings from ongoing operations in 2000, excluding special
    items, were $1.9 billion, or 84 cents per share, compared with $1.4
    billion, or 63 cents per share in 1999. Including the earnings from
    businesses sold in 1999, full-year earnings in 2000, excluding special
    items were up 29 percent compared with $1.5 billion, or 67 cents in
    1999. Including special items and earnings from businesses sold in 1999,
    full-year earnings in 2000 were $1.3 billion, or 58 cents per share,
    compared with $891 million, or 41 cents per share, in 1999.

Recent Announcement

    We began implementing cost reductions in the third and fourth quarters of
2000 and announced on January 10, 2001 that we will continue with additional
cost reduction actions in the first quarter of 2001. As part of our cost
reduction program, on January 15, 2001, we announced plans to cease
manufacturing operations at our Harvard, Illinois campus and shift the
operational focus to customer order fulfillment and new product sourcing. The
transition in Harvard will result in the elimination of approximately 2,500
manufacturing positions. The target date for completion of the manufacturing
shutdown in Harvard is June 30, 2001.

Concurrent Offering

    In addition to the PURS offered by this prospectus, we are concurrently
offering up to $              of our   % notes due       , 2006 pursuant to a
separate prospectus. The offerings of the PURS and of the notes are not
contingent upon each other. The notes would be unsecured and would rank equally
with all of our other unsecured senior indebtedness, including the PURS.

                                      S-5
<PAGE>

                            DESCRIPTION OF THE PURS

    We are offering, by means of this prospectus supplement and the related
prospectus, the PURS described below. The PURS are a separate series of debt
securities that we will issue under the senior indenture described in the
attached prospectus. This prospectus supplement summarizes specific financial
and other terms that apply to the PURS; terms that apply generally to all debt
securities issued under the senior indenture dated May 1, 1995 between Motorola
and Bank One Trust Company, N.A., as trustee, as more fully described in the
accompanying prospectus, including the PURS, are described in "Description of
Debt Securities" in the attached prospectus. The terms described here
supplement those described in the attached prospectus and, if the terms
described here are inconsistent with those described in that prospectus, the
terms described in this "Description of the PURS" are controlling. In this
"Description of the PURS," references to "we," "our" and "us" refer only to
Motorola, Inc.

                                Stated Maturity

    The PURS will mature on           , 2011, although we may become obligated
to repurchase them sooner, as we describe in "Put Option" below. We will not
otherwise be entitled to redeem the PURS before their stated maturity. In
addition, the PURS will not have the benefit of any sinking fund; that is, we
will not deposit money on a regular basis into any separate custodial account
to repay the PURS. The PURS are, however, subject to purchase by Goldman, Sachs
& Co. upon exercise of its call option, as we describe in "Call Option" below.

                                Principal Amount

    The aggregate principal amount of the PURS being offered hereby is limited
to $             . However, the senior indenture does not limit the amount of
other debt securities that we may issue.

                             Form and Denomination

    The PURS will be issued in registered form in denominations of $1,000 and
multiples of $1,000. The PURS will initially be issued in book-entry form as
global securities registered in the name of the Depository Trust Company or its
nominee. Generally, you cannot have the PURS registered in your own name. As a
result, you will have only an indirect beneficial interest, rather than an
interest as a registered holder, in the PURS and must look to your own bank or
broker for payments on the PURS. See "Book-Entry PURS" below for important
information about PURS held in global form.

                 How the PURS Will Rank Against Our Other Debt

    The PURS will not be secured by any property or assets of ours or of our
subsidiaries. Thus, by owning PURS, you will be one of our unsecured creditors.
The PURS will not be subordinated to any of our other debt obligations. This
means that, in a bankruptcy or liquidation proceeding against us, the PURS
would rank equally in right of payment with all our other unsecured and
unsubordinated debt.

    As of December 31, 2000, we had approximately $10.59 billion of
indebtedness (and approximately $689 million of guarantees by Motorola) that
would have ranked equally with the PURS and approximately $579 million of
indebtedness and redeemable preferred securities that would have ranked junior
to the PURS.

    The senior indenture does not limit the amount of additional indebtedness
that we or any of our subsidiaries may incur. The PURS will be our exclusive
obligations. Since our operations are partially

                                      S-6
<PAGE>

conducted through subsidiaries, primarily overseas, the cash flow and the
consequent ability to service debt, including the PURS, are partially dependent
upon the earnings of our subsidiaries and the distribution of those earnings
to, or upon other payments of funds by those subsidiaries to, us. The
subsidiaries are separate and distinct legal entities and have no obligation,
contingent or otherwise, to pay any amounts due on the PURS or to make funds
available for such payments, whether by dividends, loans or other payments. In
addition, the payment of dividends and the making of loans and advances to us
by our subsidiaries may be subject to statutory or contractual restrictions,
are contingent upon the earnings of those subsidiaries, and are subject to
various business considerations.

    Any right of Motorola to receive assets of any of its subsidiaries upon
their liquidation or reorganization (and the resulting right of the holders of
the PURS to participate in those assets) will be effectively subordinated to
the claims of that subsidiary's creditors (including trade creditors), except
to the extent that Motorola is itself recognized as a creditor of such
subsidiary, in which case our claims would be subordinated to any security
interests in the assets of such subsidiary and any indebtedness of such
subsidiary senior to that held by us. As of December 31, 2000, our subsidiaries
had outstanding approximately $5.3 billion of liabilities.

                         Business Days and Market Days

    In describing the PURS, we use the terms "market day" and "business day,"
which have the following special meanings:

  . ""Business day" means any day that is both a New York business day and a
    London business day. "New York business day" means any day other than a
    Saturday, a Sunday or a day on which banking institutions in New York
    City are generally authorized or obligated by law to close. "London
    business day" means any day on which dealings in U.S. dollars generally
    are transacted in the London interbank market.

  . ""Market day" means a day that is both a business day and a day on which
    dealings in the U.S. Treasury bond market are generally being conducted.

                           Role of Calculation Agent

    We have initially appointed Goldman, Sachs & Co. to act as the calculation
agent for the PURS. However, we may appoint another firm to act as the
calculation agent without notifying you.

    The calculation agent will make important determinations that affect the
terms of the PURS and their market value, including whether they will be
purchased from the holders on any reset date under the call option or the put
option described below and, if the call option is exercised, the interest rate
that will be paid on the PURS on and after the applicable reset date. Goldman,
Sachs & Co., as the holder of the call option, may make many of these
determinations even if it is not serving as the calculation agent.

    All determinations to be made by the calculation agent or by Goldman, Sachs
& Co. may be made by it in its sole discretion. Absent manifest error, all
determinations of the calculation agent and of Goldman, Sachs & Co. will be
final, conclusive and binding on all concerned and will not give rise to
liability on the part of the calculation agent, Goldman, Sachs & Co., the
trustee under the senior indenture or us.

                                      S-7
<PAGE>

                               Interest Payments

    Interest will accrue on the outstanding principal amount of the PURS at the
applicable rate described below. We will pay accrued interest semi-annually on
the PURS on              and              of each year, to and including
            , 2003, which will be the first reset date. Thereafter, we will pay
accrued interest annually on             , each of which will be a reset date,
to and including              2010 and at maturity. Interest payable on a PURS
on an interest payment date will be paid to the person in whose name the PURS
is registered on the regular record date, which will be the 15th calendar day
before that interest payment date. If the PURS mature on a day that is not an
interest payment date, we will pay the interest due at maturity to the person
entitled to receive payment of the principal.

    Each payment of interest due on an interest payment date or at maturity
will include interest accrued from and including the last date to which
interest has been paid or made available for payment, or from               ,
2001 if none has been paid or made available for payment, to but excluding the
due date.

    The amount of interest for each day that a PURS is outstanding will be
calculated by dividing the interest rate in effect for that day by 360 and
multiplying the result by the principal amount of the PURS on which interest is
to be paid. The amount of interest to be paid on any PURS for any interest
period will be calculated by adding the daily interest amounts for each day in
the interest period.

                                  Initial Rate

    The initial interest rate on the PURS will be    % each year. If the
interest rate is reset, the initial rate will apply up to but excluding the
first reset date on      , 2003.

Reset Rate

    On each reset date, the interest rate on the PURS will be reset so as to
equal a fixed rate determined as described under "Reset of Interest Rate"
below. However, the interest rate will not be reset if we become obligated to
repurchase the PURS under the put option for any reason.

Reset Dates

    The reset dates for the PURS will be             , 2003 and every
             after that date until and including             , 2010, unless any
of these dates is not a business day as defined above. In the event that any of
these dates is not a business day, the applicable reset date will be the first
day after that day that is a business day, except that if that day falls in the
next succeeding calendar month, that reset date will be brought forward to the
next preceding day that is a business day.

                                  Call Option

    Goldman, Sachs & Co. will have the right to purchase all, but not less than
all, of the outstanding PURS from the holders on each applicable reset date, at
a call price equal to 100% of the principal amount of the PURS purchased. We
refer to this right as it relates to the PURS as the "call option." Goldman,
Sachs & Co. will be entitled to decide, in its sole discretion, whether or not
to exercise the call option on any reset date. If Goldman, Sachs & Co., as
holder of the call option, does not exercise its call option with respect to
any applicable reset date, its call option will terminate immediately with
respect to any subsequent reset date.

                                      S-8
<PAGE>

    Whether or not Goldman, Sachs & Co. exercises the call option on any reset
date, we--not Goldman, Sachs & Co.--will be obligated to pay accrued interest
on the outstanding PURS. We will pay interest that becomes payable on the
applicable reset date to the person who is the registered holder on the
corresponding interest payment record date.

    To exercise the call option with respect to any reset date, Goldman, Sachs
& Co. must notify the registered holders of the outstanding PURS of its
intention to do so no later than the sixtieth calendar day before that reset
date, in the manner described under "Notices" below. We refer to a notice of
this kind as a "call notice." If a call notice is properly given, each holder
of the PURS will be obligated to sell to Goldman, Sachs & Co. all of the
holder's outstanding PURS on the applicable reset date at the call price.

    Each sale and purchase under the call option will occur through DTC
automatically as described below under "Settlement on Exercise of Put or Call
Option." If the call option is exercised, each holder will be deemed to have
automatically tendered its PURS for sale to Goldman, Sachs & Co. on the
applicable reset date in accordance with DTC procedures. However, each holder's
automatic tender of PURS will be subject to it receiving payment of the call
price on the applicable reset date.

    If Goldman, Sachs & Co. exercises the call option, it will be entitled to
purchase all the PURS outstanding on the applicable reset date. This will be
the case for every holder and beneficial owner of PURS outstanding on that
date, including those who acquire an interest in the PURS after Goldman, Sachs
& Co. gives the relevant call notice or who are unaware that Goldman, Sachs &
Co. has given the call notice. This will also be the case for any final dealer,
as described below under "Reset of Interest Rate--Reset Procedures," that holds
PURS as a result of an acquisition on a prior reset date.

    Despite the foregoing, in special situations involving a failed
remarketing, a market disruption event or a cancellation event, Goldman, Sachs
& Co. will not be obligated to pay for PURS after exercising the call option.
Instead, we will purchase them under the put option. We describe those special
situations below under "Consequences of a Market Disruption Event or Failed
Remarketing" and "Consequences of a Cancellation Event."

    No holder of a PURS or any interest in a PURS will have any right or claim
against Goldman, Sachs & Co., other than the right to receive the full
principal amount of its PURS if Goldman, Sachs & Co. exercises the call option
and is obligated to purchase the PURS on the applicable reset date, solely by
virtue of Goldman, Sachs & Co. electing to exercise or not exercise its call
option, including by settlement of its call option by us, as described below,
or otherwise.

    When we refer to Goldman, Sachs & Co. as the holder of the call option, we
mean that firm or any successor firm.

                                   Put Option

    If Goldman, Sachs & Co. does not exercise the call option with respect to
any reset date, or if it does but does not pay the call price for all
outstanding PURS on the applicable reset date, then each holder of outstanding
PURS that have not been paid for will have the right to require us to
repurchase all, but not some, of those PURS on that reset date, at a put price
equal to 100% of the principal amount repurchased. We refer to this right as
the "put option." Exercise of the put option will be automatic to the extent
described in the next subsection.

    Whether or not the put option is exercised, we will remain obligated to pay
accrued interest on each outstanding PURS. We will pay interest that becomes
payable on the applicable reset date or

                                      S-9
<PAGE>

any prior reset date to the person who is the registered holder on the
corresponding interest payment record date. If the put option is exercised and
we do not pay the put price on the applicable reset date, we will pay interest
that accrues from and including that reset date to but excluding the date the
amount is paid or made available for payment at the rate in effect immediately
before that reset date for the PURS to the holder entitled to receive the put
price.

Automatic Exercise

    On each reset date, each holder will be deemed to have exercised its put
option automatically for the full principal amount of its PURS outstanding on
that date, unless Goldman, Sachs & Co. has a call option with respect to the
reset date and either of the following occurs:

  . Goldman, Sachs & Co. exercises the call option with respect to that
    reset date and pays for the holder's PURS on the reset date; or

  . Goldman, Sachs & Co. does not exercise the call option with respect to
    that reset date and the holder elects to retain its PURS by giving an
    effective hold notice as described in the next subsection.

    If neither of the situations described above occurs on any reset date, then
we will be obligated to repurchase from each holder, and each holder will be
obligated to sell to us, all the holder's outstanding PURS on that reset date
at the put price. This would be the case if Goldman, Sachs & Co. exercised the
call option but did not pay for the holder's PURS on the applicable reset date
due to a default on its part, a market disruption event, a failed remarketing,
a cancellation event or any other reason. Each sale and purchase under the put
option will occur through DTC automatically as described below under
"Settlement on Exercise of Put or Call Option."

Hold Notices

    If Goldman, Sachs & Co. does not give a proper call notice on or prior to
the sixtieth calendar day before any reset date, any holder may elect to retain
its PURS and not sell them to us under the put option on that reset date. We
refer to this sixtieth calendar day before any reset date as a "call notice
date." To do so, however, both of the following conditions must be satisfied:

  . no later than 10:00 A.M., New York City time, on the third business day
    after the applicable call notice date, the holder must give a notice to
    the trustee stating that the holder elects not to sell its PURS to us on
    the reset date; and

  . the holder's notice must be effective under the 30% requirement
    described in the next subsection.

    We refer to a notice of this kind as a "hold notice." A holder who wishes
to give a hold notice may give it only for all, and not some, of its PURS and
must give the notice in the manner described under "Notices" below, by the
deadline specified above.

    Despite the foregoing, in special situations involving a default by
Goldman, Sachs & Co., a market disruption event, a failed remarketing or a
cancellation event, we will repurchase the PURS on the applicable reset date or
not later than the second business day after that date and holders will not be
permitted to retain them by giving hold notices. In any event we will pay all
accrued and unpaid interest on those PURS at the interest rate in effect prior
to the applicable reset date to but excluding the date the amount is paid or
made available for payment to the holder entitled to receive the principal
repayment. We describe these special situations below under "Consequences of a
Market Disruption Event or Failed Remarketing," "Consequences of a Cancellation
Event" and "Settlement on Exercise of Put or Call Option--Call Holder Default."

                                      S-10
<PAGE>

    Investors may elect to hold their PURS only in the event that Goldman,
Sachs & Co., as holder of the call option, has not exercised its call option.
Investors who hold PURS pursuant to the procedures described above may do so
only until the next applicable reset date. On that date, the holders of all
outstanding PURS will be deemed to have exercised the put option automatically
and we will be obligated to purchase all of the outstanding PURS under the put
option.

30% Requirement

    No hold notice will be effective with respect to any reset date unless
holders give proper hold notices with respect to at least 30% of the aggregate
principal amount of all PURS outstanding on the applicable reset date. We call
this requirement the "30% requirement." If any holder gives a hold notice to
the trustee when the 30% requirement has not been met, the trustee will give
written notice of that fact to the holder and us not later than the close of
business on the third business day after the applicable call notice date, in
the manner described under "Notices" below.

                             Reset of Interest Rate

    The interest rate on each outstanding PURS will be reset on each reset date
on which either of the following occurs:

  . Goldman, Sachs & Co. exercises the call option and pays for the PURS on
    that reset date; or

  . Goldman, Sachs & Co. does not exercise the call option, the holder
    elects to retain the PURS by giving the trustee a hold notice and the
    hold notice is effective under the 30% requirement.

    Notwithstanding the foregoing, reset of the interest rate is subject to the
occurrence of a market disruption event or a failed remarketing, as described
below.

Reset Procedures

    If the interest rate is to be reset on any reset date, the calculation
agent will take the following actions to calculate a new fixed rate at which
interest will accrue on the outstanding PURS beginning on that reset date.
These actions are to be taken on the sixth market day before the applicable
reset date, which we call the "calculation date." The times stated below, which
refer to New York City times on the calculation date except as otherwise
specified, are guidelines for action, and the calculation agent will use
reasonable efforts to adhere to those times. Each notice referred to in this
subsection headed "Reset Procedures" will be given telephonically and will be
confirmed as soon as possible by facsimile to each of the calculation agent and
us.

    At 11:00 A.M., the calculation agent will select three leading financial
institutions that deal actively in our debt securities and have agreed to
participate as reference dealers on the terms described below. One of these
financial institutions will be Goldman, Sachs & Co. if it wishes. Also, if
Goldman, Sachs & Co. has exercised the call option with respect to the
applicable reset date, it may require each reference dealer to provide a
written commitment, satisfactory to Goldman, Sachs & Co., to the following
effect: if selected as the final dealer described below, the reference dealer
will purchase from Goldman, Sachs & Co. on the calculation date, for settlement
on that reset date at the final offer price described below, all the PURS that
Goldman, Sachs & Co. purchases under the call option and tenders for resale to
the final dealer on that reset date. For each reference dealer, the calculation
agent will request the name of one individual to represent that reference
dealer and telephone and facsimile numbers for that individual.

                                      S-11
<PAGE>

    At 12:00 P.M., the calculation agent will take the following actions:

  . Determine 12 month LIBOR as of that calculation date, which we call
    "current 12 month LIBOR." "12 month LIBOR" means the rate for deposits
    in U.S. dollars with a period to maturity of 12 months that appears on
    Telerate page 3750 as of 11:00 A.M., London time, on the relevant
    calculation date. "Telerate page 3750" means the display on Bridge
    Telerate, Inc., or any successor service, on page 3750 or any
    replacement page or pages on which London interbank rates of major banks
    for U.S. dollars are displayed.

  . Calculate and provide to the reference dealers, on a preliminary basis,
    a hypothetical price at which the PURS might be offered for sale to a
    reference dealer on that reset date. This hypothetical offer price will
    be expressed as a percentage of the principal amount of the PURS and
    will equal either:

        100% plus the margin, if the 12 month LIBOR difference is positive,
    or

        100% minus the margin, if the 12 month LIBOR difference is negative.

    The "margin," which will also be expressed as a percentage of the
    principal amount of the PURS, will equal the following:

     100 X absolute value of the 12 month LIBOR difference X (actual days in
                                reset period/360)
        1 + (current 12 month LIBOR X (actual days in reset period/360))

    The "12 month LIBOR difference" will be expressed as a percentage, which
    may be positive or negative, equal to   % minus current 12 month LIBOR.
    For purposes of the margin formula above, the 12 month LIBOR difference
    and current 12 month LIBOR will be expressed as decimals (for example,
    5% = .05).

    A "reset period" is each successive period from and including a reset
    date to but excluding the next reset date or, if there is no next reset
    date, the final maturity.

  . Ask each reference dealer to provide the calculation agent with a firm
    bid when notified of the final offer price described below. The bid must
    be expressed as a percentage representing an interest rate spread with
    reference to 12 month LIBOR at which the reference dealer would be
    willing to purchase all outstanding PURS at the final offer price, on
    that calculation date for settlement on the applicable reset date,
    assuming for this purpose that the PURS will remain callable by Goldman,
    Sachs & Co. and, if not called, puttable by the holders every year and
    will mature on the final maturity date, all as described above. Each bid
    must be given on an "all-in" basis and remain open for at least 30
    minutes.

    At 12:30 P.M., the calculation agent will determine current 12 month LIBOR
on a final basis, calculate and provide the reference dealers with the
hypothetical offer price described above on a final basis, which we call the
"final offer price," and request each reference dealer to submit its bid
immediately as described above. Current 12 month LIBOR, the margin, the 12
month LIBOR difference, the final offer price and the final spread will be
obtained on a final basis from Goldman, Sachs & Co., if it has exercised the
call option and whether or not it is the calculation agent. If the calculation
agent receives at least two firm bids, the following will occur:

  . The reference dealer providing the bid representing the lowest all-in
    interest rate spread with reference to 12 month LIBOR, which we call the
    "final spread," will be the "final dealer." If more than one reference
    dealer has provided a bid representing the lowest all-in spread, each
    reference dealer submitting the lowest all-in spread will be permitted
    to submit a second bid in the manner described above. The reference
    dealer submitting the lowest all-in spread will be the final dealer. If
    more than one submits the lowest all-in spread, the final dealer will be
    the lowest bidder selected by Goldman, Sachs & Co., if it has exercised
    the call option and whether or not it is the calculation agent
    (otherwise by the calculation agent).

                                      S-12
<PAGE>

  . If Goldman, Sachs & Co. has exercised the call option with respect to
    the applicable reset date, the final dealer will be obligated to
    purchase from Goldman, Sachs & Co. at the final offer price, for
    settlement on that reset date, all the PURS that Goldman, Sachs & Co.
    purchases under the call option and tenders for resale to the final
    dealer on that reset date. This assumes that the interest rate on the
    PURS will be reset as described below. You should note that, if Goldman,
    Sachs & Co. does not exercise the call option with respect to any reset
    date and you elect to retain your PURS by giving an effective hold
    notice, the final dealer will not be obligated to purchase them from
    you.

  . The calculation agent (or Goldman, Sachs & Co. if it is not the
    calculation agent) will determine and provide to us the final spread.

  . We will reset the interest rate on each PURS so as to equal the
    applicable current 12 month LIBOR adjusted appropriately for the final
    spread, effective for the applicable reset period. If Goldman, Sachs &
    Co. does not exercise the call option and any holder gives an effective
    hold notice, we will promptly give written notice of the reset interest
    rate to the holder in the manner described under "Notices" below.

    If Goldman, Sachs & Co. does not exercise the call option with respect to
any reset date, the final dealer will not be obligated to purchase PURS from
any holder, and no holder will be obligated to sell PURS to the final dealer.
Consequently, in deciding whether to give a hold notice, you should not assume
that any dealer will be prepared to purchase your PURS at the final offer price
or otherwise. Moreover, in these circumstances, dealers may be less willing to
submit bids, making a failed remarketing more likely.

        Consequences of a Market Disruption Event or Failed Remarketing

    If the calculation agent determines that, on the applicable calculation
date, either:

  . a market disruption event occurs or is continuing; or

  . a failed remarketing occurs,

then the procedures for resetting the interest rate on the PURS described
above, including the determination of the current 12 month LIBOR, 12 month
LIBOR difference and margin, will be applied on the next market day on which
the calculation agent determines that no market disruption event occurs or is
continuing and that no failed remarketing occurs.

    If the calculation agent determines that a market disruption event or a
failed remarketing occurs or is continuing on each of the four consecutive
market days starting on the applicable calculation date, then Goldman, Sachs &
Co. will be deemed not to have exercised the call option, whether or not it
has, all holders will be deemed to have exercised their put options and we will
repurchase all the outstanding PURS from the holders on the applicable reset
date at the put price. In these circumstances, holders may not retain their
PURS by giving hold notices. In addition, we will pay Goldman, Sachs & Co. an
amount equal to the fair market value of the call option. No later than the
second market day before the applicable reset date, in the manner described
under "Notices" below, we will notify the holders that we will repurchase their
PURS on the reset date at the put price.

    If Goldman, Sachs & Co. exercises the call option but is not acting as
calculation agent, then Goldman, Sachs & Co. will be entitled to make the
determinations regarding market disruption events and failed remarketings
described in the two prior paragraphs. All determinations regarding market
disruption events and failed remarketings, including whether or not any has
occurred or is continuing, will be made by the calculation agent or Goldman,
Sachs & Co., as applicable, in its sole discretion.

                                      S-13
<PAGE>

Market Disruption Event

    Any of the following will be a "market disruption event":

  . a suspension or material limitation in trading in securities generally
    on the New York Stock Exchange or the establishment of minimum prices on
    that exchange; or

  . a general moratorium on commercial banking activities declared by either
    federal or New York State authorities; or

  . any change in the existing financial or economic conditions in the
    United States or the United Kingdom that in the good faith judgment of
    the calculation agent is so material and adverse as to make it
    impractical or inadvisable to proceed with the completion of the
    purchase of the PURS pursuant to the call option and their remarketing;
    or

  . an outbreak or escalation of hostilities involving the United States or
    the declaration of a national emergency or war by the United States; or

  . any material disruption of the U.S. government securities market, U.S.
    corporate bond market or U.S. federal wire system.

Failed Remarketing

    A "failed remarketing" means that fewer than two reference dealers have
provided firm bids in a timely manner under written purchase commitments
satisfactory to Goldman, Sachs & Co. substantially as described above under
"Reset of Interest Rate--Reset Procedures."

                      Consequences of a Cancellation Event

    If Goldman, Sachs & Co. exercises the call option with respect to any reset
date but determines, at any time before 10:00 A.M., New York City time, on that
reset date, that a cancellation event has occurred, it will be deemed not to
have exercised the call option and we will repurchase all the outstanding PURS
from the holders at the put price not later than the second business day after
that reset date. In these circumstances, holders may not retain their PURS by
giving hold notices. We will also pay Goldman, Sachs & Co. an amount equal to
the fair market value of the call option which will be determined on or shortly
after the applicable calculation date.

    In addition, if Goldman, Sachs & Co. determines, at any time before it
exercises the call option with respect to any reset date, that a cancellation
event has occurred, we will pay it an amount equal to the fair market value of
the call option. In these circumstances, Goldman, Sachs & Co. will not be
obligated to exercise the call option, holders will not be permitted to retain
the PURS by giving hold notices and we will repurchase all the outstanding PURS
from the holders on the applicable reset date at the put price. We will notify
the holders that we will do so no later than the tenth market day before the
applicable reset date, in the manner described under "Notices" below.

Cancellation Event

    Any of the following will be a cancellation event:

  . an event of default relating to the PURS occurs under the senior
    indenture, as described in the attached prospectus; or

  . the failure by us to comply with or perform, in all material respects,
    our obligations and agreements contained in our agreement with Goldman,
    Sachs & Co., which we summarize in the next subsection; or

                                      S-14
<PAGE>

  . the PURS cease to be issued in book-entry form at DTC, other than at the
    request of Goldman, Sachs & Co.

Goldman, Sachs & Co. will be entitled to determine whether a cancellation event
has occurred in its sole discretion.

Our Agreement with Goldman, Sachs & Co.

    We have entered into an agreement with Goldman, Sachs & Co., as the holder
of the call option, which contains, among other things, our agreement to comply
with the following unless we obtain their consent:

  . we will not permit the terms of the PURS or the senior indenture, as it
    relates to the PURS, to be changed;

  . we will not, and will not permit any subsidiary or affiliate to, buy any
    PURS in the open market or otherwise, except under the put option;

  . if we appoint another calculation agent, we will do so on terms
    acceptable to Goldman, Sachs & Co.; and

  . we will use our best efforts to keep the PURS in book-entry form at DTC
    or another book-entry system, and we will waive any discretionary right
    we may have under the senior indenture to cause the PURS to be issued in
    non-book-entry form.

                  Settlement on Exercise of Put or Call Option

Call Settlement

    If Goldman, Sachs & Co. exercises the call option, then, on the applicable
reset date, all beneficial interests in the outstanding PURS will be
transferred to a DTC account designated by Goldman, Sachs & Co. Goldman, Sachs
& Co. will be obligated to pay an amount equal to 100% of the principal amount
of the outstanding PURS to DTC, for credit to the accounts of the DTC
participants through which beneficial interests in the PURS are held, by the
close of business on the applicable reset date. Each transfer will be made
against the corresponding payment, and each payment will be made against the
corresponding transfer, in accordance with DTC procedures.

    If payment is made as required, the transfers will occur on the applicable
reset date automatically by book entry through DTC. No holder or beneficial
owner will have to approve or be able to stop the transfers. When a PURS is
transferred, the former holder and beneficial owners will cease to have any
ownership interest in it.

    We will remain obligated to pay accrued interest on each outstanding PURS.
We will pay interest payable on the applicable reset date to the person who is
the holder on the corresponding interest payment record date.

Call Holder Default

    If Goldman, Sachs & Co. exercises the call option with respect to any reset
date but fails to pay an amount equal to 100% of the principal amount of the
outstanding PURS on that reset date as described above, the call option will be
deemed not to have been exercised and the put option will be deemed to have
been exercised with respect to all of the outstanding PURS. In these
circumstances, holders may not retain their PURS by giving hold notices.
Instead, not later than the second business day after the applicable reset
date, we will pay 100% of the principal amount of the outstanding PURS, plus
accrued interest from and including that reset date to but excluding the
date

                                      S-15
<PAGE>

the principal is paid or made available for payment. Settlement will occur as
described in the next subsection except that it may be deferred until the
second business day after the applicable reset date.

    We will remain obligated to pay accrued interest on each outstanding PURS.
We will pay interest payable on the applicable reset date to the person who is
the holder on the corresponding interest payment record date. We will pay
interest accruing from and after the applicable reset date to the holder
entitled to receive the put price.

Put Settlement

    If the put option is exercised with respect to PURS, then, on the
applicable reset date, all beneficial interests in those PURS will be
transferred to a DTC account designated by us. We will be obligated to pay 100%
of the principal amount of those PURS to DTC, for credit to the accounts of the
DTC participants through which beneficial interests in those PURS are held, by
the close of business on the applicable reset date. Each transfer will be made
against the corresponding payment, and each payment will be made against the
corresponding transfer, in accordance with DTC procedures.

    If we make payment as required, the transfers will occur automatically on
the applicable reset date, by book entry through DTC. No holder or beneficial
owner will need to approve or be able to stop the transfer. When a PURS is
transferred, the former holder and beneficial owners will cease to have any
ownership interest in it.

    We will remain obligated to pay accrued interest on each outstanding PURS
to, but not including, the applicable reset date. We will pay interest payable
on the applicable reset date to the person who is the registered holder on the
corresponding interest payment record date. In addition, if the put option is
exercised for any PURS but we do not pay the put price on the applicable reset
date, we will pay interest on the unpaid amount from and including that reset
date to but excluding the date the amount is paid or made available for payment
at the rate in effect immediately before that reset date. We will pay this
interest to the holder entitled to receive the put price. Our failure to pay
the repurchase price of the PURS upon exercise of the put option will
constitute an event of default with respect to the PURS under the senior
indenture.

    If Goldman, Sachs & Co. exercises the call option with respect to any reset
date but then determines that a cancellation event has occurred, settlement
will occur as described in this subsection, except that it may be deferred
until the second business day after that reset date.

DTC Procedures

    The transactions described above will occur through DTC in accordance with
its procedures. Thus, the accounts of the respective DTC participants will be
debited and credited and the PURS will be delivered by book-entry as necessary
to effect the purchases and sales of the PURS on the applicable reset date. The
transactions will settle in immediately available funds through DTC's Same-Day
Funds Settlement System.

    The settlement procedures described above, including those for payment and
delivery under the put or call option, may be modified, regardless of any
contrary terms of the PURS or the senior indenture, to the extent required by
DTC or, if the book-entry system is no longer available for the PURS at the
relevant time, to the extent required to facilitate these transactions in non-
book-entry form. In addition, regardless of any contrary terms of the PURS or
the senior indenture, Goldman, Sachs & Co. and we may modify the settlement
procedures described above in order to facilitate the settlement process.

                                      S-16
<PAGE>

                     Payments Are Due Only on Business Days

    If any principal, interest or other payment on the PURS, including any
payment by Goldman, Sachs & Co. under the call option or by us under the put
option, would otherwise be due on a day that is not a business day as defined
above, that payment may be made on the next succeeding day that is a business
day, with the same effect as if that payment were made on the original due
date, except that if that next succeeding business day falls in the next
succeeding calendar month, the payment will be made on the next preceding
business day.

                                    Notices

Notices to Holders

    As long as the PURS are in book-entry form, call notices, 30% requirement
notices and any other notices to be given to holders of PURS will be given only
to DTC, or its nominee, in accordance with DTC's procedures. We believe that
DTC's practice is to inform its participants of any notice it receives, in
accordance with its procedures. Those who hold beneficial interests in the PURS
through DTC or its direct or indirect participants may wish to consult with
them about the manner in which notices and other communications relating to the
PURS may be given and received through the facilities of DTC. Neither we, the
calculation agent, Goldman, Sachs & Co. nor the trustee will have any
responsibility for DTC's policies and procedures or for any notices or other
communications among DTC, its direct and indirect participants and the
beneficial owners of PURS. Once a notice is given to DTC in accordance with the
procedures, it will be deemed given to all holders of PURS in book-entry form.

    If any PURS ceases to be issued in book-entry form, call notices, 30%
requirement notices and any other notices to be given to holders of those PURS
will be deemed properly given to them upon the mailing of the notices to the
holders of those PURS at their respective addresses as they appear on the
securities register maintained by us or the trustee as of the close of business
on the day before the day notice is given.

    Neither the failure to give any notice nor any defect in any notice given
to a particular holder will affect the sufficiency of any notice given to
another holder.

Hold Notices to Trustee

    Hold notices may be given to the trustee only by facsimile transmission, by
mail or by hand delivery and must actually be received by the trustee at the
following address no later than 10:00 A.M., New York City time, on the third
business day after the applicable call notice date:

      Bank One Trust Company, N.A.
      1 Bank One Plaza, Chicago, Illinois 60670
      Attention: Corporate Trust Office

    A hold notice may be given with respect to a PURS only by the registered
holder of that PURS. Therefore, as long as the PURS are in book-entry form,
hold notices must be given by DTC or its agent, and any beneficial owner that
wants a hold notice to be given with respect to its beneficial interest in the
PURS will need to make arrangements with DTC and the direct or indirect
participants in DTC through which the beneficial owner holds its interest for
the notice to be given in a timely manner.

                                      S-17
<PAGE>

                                Book-Entry PURS

    We will issue the PURS in book-entry form only. This means that, unless and
until a special termination event occurs as described below, the PURS will be
represented by one or more global certificates registered in the name of a
financial institution--in this case DTC or its nominee--that holds them as
depositary on behalf of other financial institutions that participate in the
depositary's book-entry system. These participating institutions, in turn, hold
beneficial interests in the PURS on behalf of themselves or their customers.

    Under the senior indenture, only the person in whose name a PURS is
registered is recognized as the holder of that PURS. Consequently, as long as
the PURS are issued in global form, we will recognize only the depositary as
the holder of the PURS. Investors will own beneficial interests in a global
PURS, through a bank, broker or other financial institution that participates
in the depositary's book-entry system or holds an interest through a
participant. As long as the PURS are issued in global form, investors will be
indirect holders, not registered holders, of the PURS.

Beneficial Owners are Not Holders

    Our obligations, as well as any obligations of the trustee or any third
party employed by us or the trustee, run only to the registered holders of the
PURS. Similarly, if Goldman, Sachs & Co. exercises the call option with respect
to any reset date and becomes obligated to purchase the PURS on that reset
date, its obligations run only to the registered holders of the PURS. Neither
we, Goldman, Sachs & Co. nor any other persons have obligations to investors
who hold beneficial interests in PURS that are held in book-entry form, in
street name or by any other indirect means.

    For example, once we or Goldman, Sachs & Co. make a payment or give a
notice to the registered holder, neither we nor Goldman, Sachs & Co. will have
any further responsibility for that payment or notice even if the registered
holder is required, under agreements with depositary participants or by law, to
pass it along to the indirect holders but does not do so. Similarly, if we want
to obtain the approval of the registered holder for any purpose--for example,
to amend the senior indenture or to relieve us of the consequences of a default
or of our obligation to comply with a particular provision of the senior
indenture--we would seek the approval only from the registered holder, and not
the indirect holders, of the PURS. Whether and how the registered holder
contacts the indirect holders is up to the registered holder.

                     Special Considerations for Global PURS

    Because the PURS will be issued in book-entry form, investors should be
aware of the following:

  . You cannot have the PURS registered in your own name, and cannot obtain
    non-global certificates for your interest in the PURS, unless a special
    termination event occurs.

  . You will be an indirect owner and must look to your own bank or broker
    for payments on the PURS and protection of your legal rights relating to
    the PURS.

  . You may not be able to sell interests in the PURS to some insurance
    companies and other institutions that are required by law to own their
    securities in non-book-entry form.

  . You may not be able to pledge your interest in a global PURS in
    circumstances where certificates representing the PURS must be delivered
    to the lender or other beneficiary of the pledge in order for the pledge
    to be effective.

  . The depositary's policies, which may change from time to time, will
    govern payments, transfers, exchanges and other matters relating to your
    interest in a global PURS. Neither

                                      S-18
<PAGE>

    we, the trustee, the calculation agent nor Goldman, Sachs & Co. monitors
    the depositary or has any responsibility for its actions or for its
    records of ownership interests in a global PURS.

  . The depositary will require that those who purchase and sell interests
    in a global PURS within its book-entry system use immediately available
    funds, and your broker or bank may require you to do so as well.

    Financial institutions that participate in the depositary's book-entry
system, and through which you hold your interest in the global PURS, may also
have their own policies affecting payments, notices and other matters relating
to the PURS. Consequently, you should check with your own institution through
which you hold your interests in the PURS to find out:

  . how it handles securities payments and notices;

  . whether it imposes fees or charges;

  . how it would handle a request for the holders' consent, if ever
    required;

  . how it would exercise rights under the PURS if there were a default or
    other event triggering the need for holders to act to protect their
    interests;

  . how the depositary's rules and procedures will affect these matters; and

  . whether and how you can instruct it to send you PURS registered in your
    own name so you can be a registered holder, if that is permitted in the
    future.

    There may be more than one financial intermediary in the chain of
ownership for you. Neither we, the trustee, the calculation agent nor Goldman,
Sachs & Co. monitors or is responsible for the actions of any of those
intermediaries.

                          Termination of Global PURS

    The PURS will be represented by one or more global PURS at all times
unless and until a special termination event occurs. If such an event occurs,
we will try to issue the PURS through another book-entry clearing system. If
we are unable to do so, we will exchange the global PURS for non-global PURS
registered in the names of the beneficial owners or their designees as
identified to us by the depositary or its nominee.

    The events that could result in termination of a global PURS are as
follows:

  . if the depositary notifies us that it is unwilling, unable or no longer
    qualified to continue as depositary for the PURS and we do not appoint
    another institution to act as depositary within 60 days; or

  . if an event of default has occurred with regard to the PURS and has not
    been cured or waived; we discuss defaults in the attached prospectus
    under "Events of Default"; or

  . if Goldman, Sachs & Co. exercises the call option with respect to any
    reset date and determines that termination is necessary to facilitate
    settlement under the call option.

    If a global PURS is terminated, only the depositary or its nominee will be
entitled to select the persons in whose names the PURS represented by the
global certificate will be registered and, therefore, who will become the
holders of those PURS.

                                     S-19
<PAGE>

       CERTAIN UNITED STATES FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS

    The following is a general discussion of certain U.S. federal income and
estate tax consequences of acquisition, ownership and disposition of the PURS
by a beneficial owner of the PURS who holds the PURS as a capital asset and
acquires the PURS upon initial issuance. This discussion does not deal with all
aspects of U.S. federal income and estate taxation that may be relevant to
holders in light of their particular circumstances, and does not address state,
local or non-U.S. tax considerations. The discussion set forth below is based
upon the U.S. Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations promulgated thereunder, and administrative and judicial
interpretations of the foregoing as of the date hereof. Any of such authorities
may be repealed, revoked or modified so as to result in federal income tax
consequences different from those discussed below, possibly with retroactive
effect. Motorola will not seek a ruling on any of the issues discussed below
nor will it receive an opinion of counsel with respect to the U.S. federal
income or estate tax treatment of the PURS. No assurances can be given as to
whether results contrary to those described below may occur. PERSONS
CONSIDERING THE PURCHASE, OWNERSHIP OR DISPOSITION OF PURS SHOULD CONSULT THEIR
OWN TAX ADVISORS CONCERNING THE FEDERAL INCOME AND ESTATE TAX CONSEQUENCES IN
LIGHT OF THEIR PARTICULAR SITUATION AS WELL AS ANY CONSEQUENCES ARISING UNDER
THE LAWS OF ANY OTHER TAXING JURISDICTION.

    For purposes of this discussion, a "U.S. person" means a citizen or
resident of the United States, a corporation or partnership created or
organized in the United States or under the law of the United States or of any
State or political subdivision of the foregoing, any estate whose income is
includible in gross income for U.S. federal income tax purposes regardless of
its source, or a "United States Trust". A "United States Trust" is (a) for
taxable years beginning after December 31, 1996, or if the trustee of a trust
elects to apply the following definition to an earlier taxable year, any trust
if (i) a court within the United States is able to exercise primary supervision
over the administration of the trust and (ii) one or more U.S. persons have the
authority to control all substantial decisions of the trust, and (b) for all
other taxable years, any trust whose income is includible in gross income for
U.S. federal income tax purposes regardless of its source. As used herein, the
term "U.S. holder" means a beneficial owner of a PURS for U.S. federal income
tax purposes that is a U.S. person and the term "Non-U.S. Holder" means a
beneficial owner of a PURS for U.S. federal income tax purposes that is not a
U.S. holder.

    The U.S. federal income tax treatment of debt obligations such as the PURS
is not entirely certain. Because the PURS are subject to an automatic put to
Motorola on each reset date (unless the call option is exercised or sufficient
holders give a hold notice (consistent with the 30% requirement)), the PURS may
be treated as maturing on the initial reset date. Based on such treatment,
interest on the PURS through at least the initial reset date should constitute
"qualified stated interest" and generally should be taxable to a U.S. holder as
ordinary interest income at the time such payments are accrued or received (in
accordance with the U.S. holder's regular method of accounting). If the holder
retains the PURS after the initial reset date, the PURS should be treated as
then retired and reissued by Motorola for purposes of determining any original
issue discount or short-term discount on the PURS.

    A U.S. holder generally will recognize taxable gain or loss upon the sale,
exchange or retirement of a PURS (including a deemed retirement on the initial
reset date). The U.S. holder will recognize gain if the amount received on the
sale, exchange or retirement (other than amounts representing accrued and
unpaid interest or accrued short-term discount not already included in income)
exceeds the holder's adjusted tax basis in the PURS and will recognize loss if
the holder's tax basis exceeds the amount received on the sale, exchange or
retirement. A holder's tax basis in a PURS generally will equal such U.S.
holder's initial purchase price for the PURS increased by any unpaid short-term
discount included in income and decreased by any amortized premium.

                                      S-20
<PAGE>

    There is no assurance that this treatment of the PURS is correct. For
instance, the PURS may be treated as maturing on their final maturity date. In
the event the PURS were treated as maturing on their final maturity date for
U.S. federal income tax purposes, the PURS may be treated as a "variable rate
debt instrument," in which case all interest on the PURS should be treated as
qualified stated interest and be taxable to a U.S. holder as ordinary interest
income at the time such payments are received or accrue (in accordance with the
holder's method of accounting).

    However, it is also possible that the PURS could be treated as having
contingent interest. In such event, Treasury Regulations (the "Contingent
Payment Regulations") would require Motorola to construct a projected payment
schedule for the PURS, based upon Motorola's current borrowing costs for
comparable debt instruments of Motorola, from which an estimated yield on the
PURS would be calculated. A U.S. holder would be required to include in income
(regardless of its method of accounting) original issue discount ("OID") in an
amount equal to the product of the adjusted issue price of the PURS at the
beginning of each interest accrual period and the estimated yield of the PURS.
In general, for these purposes, a PURS' adjusted issue price would equal the
PURS issue price increased by the interest previously accrued on the PURS and
reduced by all payments made on the PURS. As a result of the application of the
Contingent Payment Regulations, it is possible that a U.S. holder would be
required to include interest income in excess of actual payments received for
certain taxable years.

    Alternatively, the issue price of the PURS may be treated as including the
value of the call option. For example, a U.S. holder might be treated as having
(1) purchased a PURS for an amount equal to its fair market value on the
original issue date, and (2) effectively sold the call option to Goldman, Sachs
& Co. for a premium equal to the excess of such fair market value over the
principal amount of the PURS. This characterization may not change the tax
consequences as to a U.S. holder that purchased a PURS for an amount equal to
its principal amount and disposed of the PURS pursuant to the exercise of the
call option, assuming that the U.S. holder had not made an election to amortize
bonds purchased at a premium. But this characterization may cause a U.S. holder
that disposed of its PURS before the exercise of the call option to include as
short-term capital gain, with a corresponding capital loss (due to the decrease
in consideration allocated to the PURS), an amount equal to the positive
difference (if any) between the fair market value of the call option upon
issuance of the PURS and its value as of the time of disposition.

    If the U.S. holder had made an election to amortize bonds purchased at a
premium, the U.S. holder might effectively be able to reduce interest income
accrued over the life of the PURS by an amount not in excess of the premium
received for the call option. However, amortization of this amount would reduce
the U.S. holders' basis in the PURS, so the U.S. holder would recognize an
offsetting capital gain (or reduced capital loss) equal to the amount of such
amortization when the U.S. holder disposed of the PURS pursuant to the put
option or the call option.

    A U.S. holder might be able to avoid the call option premium treatment
described in the preceding paragraphs by electing to treat the PURS and the
call option as a single instrument for U.S. federal income tax purposes under
the "integration" rules of Treasury regulation section 1.1275-6, if these rules
can be applied to the PURS and the call option. In addition, if the integration
rules apply, a U.S. holder would accrue the interest with respect to the PURS
as original issue discount. This may not be advantageous to a cash-basis U.S.
holder.

    However, if the PURS are treated as having contingent interest, the
character of any gain or loss upon the sale or exchange of a PURS (including a
sale pursuant to a put or call on a reset date) by a U.S. holder will likely
differ if the PURS were treated as contingent payment obligations. Any such
taxable gain generally would be treated as ordinary income. Any such taxable
loss generally would be ordinary to the extent of previously accrued original
issue discount and any excess would generally be treated as capital loss.

                                      S-21
<PAGE>

Non-U.S. Holders

    Under present U.S. federal income and estate tax law, and subject to the
discussion below concerning backup withholding:

      (a) no withholding of U.S. federal income tax will be required with
  respect to the payment by Motorola or any paying agent of principal or
  interest (which for purposes of this discussion includes OID) on a PURS
  owned by a Non-U.S. Holder, provided (i) that the beneficial owner does
  not actually or constructively own 10% or more of the total combined
  voting power of all classes of stock of Motorola entitled to vote within
  the meaning of section 871(h)(3) of the Code and the regulations
  thereunder, (ii) the beneficial owner is not a controlled foreign
  corporation that is related to Motorola through stock ownership, (iii) the
  beneficial owner is not a bank whose receipt of interest on a PURS is
  described in section 881(c)(3)(A) of the Code and (iv) the beneficial
  owner satisfies the statement requirement (described generally below) set
  forth in section 871(h) and section 881(c) of the Code and the regulations
  thereunder;

      (b) no withholding of U.S. federal income tax will be required with
  respect to any gain or income realized by a Non-U.S. Holder upon the sale,
  exchange or retirement of a PURS (including a sale pursuant to a put or
  call on a reset date); and

      (c) a PURS beneficially owned by an individual who at the time of his
  or her death is not a citizen or resident (as specifically defined for
  U.S. estate tax purposes) of the United States will not be subject to U.S.
  federal estate tax as a result of such individual's death, provided that
  such individual does not actually or constructively own 10% or more of the
  total combined voting power of all classes of stock of Motorola entitled
  to vote within the meaning of section 871(h)(3) of the Code and provided
  that the interest payments with respect to such PURS would not have been,
  if received at the time of such individual's death, effectively connected
  with the conduct of a U.S. trade or business by such individual.

    To satisfy the requirement referred to in (a)(iv) above, the beneficial
owner of such PURS, or a financial institution holding the PURS on behalf of
such owner, must provide, in accordance with specified procedures, a paying
agent of Motorola with a statement to the effect that the beneficial owner is
not a U.S. person. Currently these requirements will be met if (1) the
beneficial owner provides his name and address, and certifies, under penalties
of perjury, that he is not a U.S. person (which certification may be made on an
IRS Form W-8 BEN) or (2) a financial institution holding the PURS on behalf of
the beneficial owner certifies, under penalties of perjury, that such statement
has been received by it and furnishes a paying agent with a copy thereof. Under
recently finalized Treasury regulations (the "Final Regulations"), the
statement requirement referred to in (a)(iv) above may also be satisfied with
other documentary evidence with respect to an offshore account or through
certain foreign intermediaries.

    If a Non-U.S. Holder cannot satisfy the requirements of the "portfolio
interest" exception described in (a) above, payments of premium, if any, and
interest (including OID) made to such Non-U.S. Holder will be subject to a 30%
withholding tax unless the beneficial owner of the PURS provides Motorola or
its paying agent, as the case may be, with a properly executed (1) IRS Form W-8
BEN (or successor form) claiming an exemption from withholding tax or a
reduction in withholding tax under the benefit of a tax treaty or (2) IRS Form
W-8 ECI (or successor form) stating that interest paid on the PURS is not
subject to withholding tax because it is effectively connected with the
beneficial owner's conduct of a trade or business in the United States. Under
the Final Regulations, alternative documentation may be applicable in certain
situations.

    If a Non-U.S. Holder is engaged in a trade or business in the United States
and premium, if any, or interest (including OID) on the PURS is effectively
connected with the conduct of such trade or business, the Non-United States
Holder, although exempt from the withholding tax discussed

                                      S-22
<PAGE>

above, will be subject to U.S. federal income tax on such interest and OID and
premium, if any, on a net income basis in the same manner as if it were a U.S
holder. In addition, if such holder is a foreign corporation, it may be subject
to a branch profits tax equal to 30% (or lower treaty rate) of its effectively
connected earnings and profits for the taxable year, subject to adjustments.
For this purpose, such premium, if any, and interest (including OID) on a PURS
will be included in such foreign corporation's earnings and profits.

    Any gain or income realized upon the sale, exchange or retirement of a PURS
(including a sale pursuant to a put or call on a reset date) generally will not
be subject to U.S. federal income tax unless (i) such gain or income is
effectively connected with a trade or business in the United States of the Non-
U.S. Holder, or (ii) in the case of a Non-U.S. Holder who is an individual,
such individual is present in the United States for 183 days or more in the
taxable year of such sale, exchange or retirement, and certain other conditions
are met.

Information Reporting and Backup Withholding

    In general, information reporting requirements will apply to certain
payments of principal, interest, OID and premium paid on PURS and to the
proceeds of sale of a PURS made to U.S. holders other than certain exempt
recipients (such as corporations). A 31% backup withholding tax will apply to
such payments if the U.S. holder fails to provide a taxpayer identification
number or certification of foreign or other exempt status or fails to report,
in full, dividend and interest income.

    No information reporting or backup withholding will be required with
respect to payments made by Motorola or any paying agent to Non-U.S. Holders if
a statement described in (a)(iv) under "Non-U.S. Holders" has been received and
the payor does not have actual knowledge that the beneficial owner is a U.S.
person.

    In addition, backup withholding and information reporting will not apply if
payments of the principal, interest, OID or premium on a PURS are paid or
collected by a foreign office of a custodian, nominee or other foreign agent on
behalf of the beneficial owner of such PURS and a valid foreign intermediary
withholding certificate is received from such custodian, nominee or foreign
agent, or if a foreign office of a broker (as defined in applicable Treasury
regulations) pays the proceeds of the sale of a PURS to the owner thereof. If,
however, such nominee, custodian, agent or broker is, for U.S. federal income
tax purposes, a U.S. person, a controlled foreign corporation or a foreign
person that derives 50% or more of its gross income for certain periods from
the conduct of a trade or business in the United States, such payments will not
be subject to backup withholding but will be subject to information reporting,
unless (1) such custodian, nominee, agent or broker has documentary evidence in
its records that the beneficial owner is not a U.S. person and certain other
conditions are met or (2) the beneficial owner otherwise establishes an
exemption. Under the Final Regulations, backup withholding will not apply to
such payments absent actual knowledge that the payee is a U.S. person.

    Payments of principal, interest, OID and premium on a PURS paid to the
beneficial owner of a PURS by a U.S. office of a custodian, nominee or agent,
or the payment by the U.S. office of a broker of the proceeds of sale of a
PURS, will be subject to both backup withholding and information reporting
unless the beneficial owner provides the statement referred to in (a)(iv) above
and the payor does not have actual knowledge that the beneficial owner is a
U.S. person or otherwise establishes an exemption.

    Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against such holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.

                                      S-23
<PAGE>

                                  UNDERWRITING

    Motorola and the underwriters named below have entered into an underwriting
agreement and a terms agreement with respect to the PURS. Subject to certain
conditions, each underwriter has severally agreed to purchase the principal
amount of the PURS set forth in the following table.

<TABLE>
<CAPTION>
                                                                       Principal
                                                                       Amount of
                                Underwriters                             PURS
                                ------------                           ---------
      <S>                                                              <C>
      Goldman, Sachs & Co. ...........................................  $
                                                                        ------
          Total.......................................................  $
                                                                        ======
</TABLE>

    PURS sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus
supplement. Any PURS sold by the underwriters to securities dealers may be sold
at a discount from the initial public offering price of up to      % of the
principal amount of the PURS. Any such securities dealers may resell any PURS
purchased from the underwriters to certain other brokers or dealers at a
discount from the initial public offering price of up to      % of the
principal amount of the PURS. If all the PURS are not sold at the initial
offering price, the underwriters may change the offering price and the other
selling terms.

    In consideration of the call option that Goldman, Sachs & Co. will receive
with respect to the PURS as described herein, Goldman, Sachs & Co. will pay us
an amount equal to     % of the principal amount of the PURS.

    The PURS are a new issue of securities with no established trading market.
We have been advised by the underwriters that they intend to make a market in
the PURS but are not obligated to do so and may discontinue market making at
any time without notice. No assurance can be given as to the liquidity of the
trading market for the PURS.

    In connection with the offering, the underwriters may purchase and sell the
PURS in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriters of a greater number of
PURS than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the PURS while the
offering is in progress.

    The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased the PURS
sold by or for the account of such underwriter in stabilizing or short-covering
transactions.

    These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the PURS. As a result, the price of the PURS may be
higher than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the underwriters at any
time. These transactions may be effected in the over-the-counter market or
otherwise.

    Motorola estimates that its share of the total expenses of the offering of
the PURS, excluding underwriting discounts and commissions, will be
approximately $        .

    Motorola has agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.

    From time to time, the underwriters and certain of their affiliates have
engaged, and may in the future engage, in transactions with, and perform
services for, us and our affiliates in the ordinary course of business.

                                      S-24
<PAGE>

                                 LEGAL MATTERS

    The validity of the PURS will be passed upon for Motorola by Jeffrey A.
Brown of our Law Department and Winston & Strawn, Chicago, Illinois. As of
January 15, 2001, Mr. Brown owned approximately 900 shares of our common stock
and held options to purchase 19,400 shares of our common stock, of which
options to purchase 3,100 shares were currently exercisable. Certain legal
matters relating to the PURS will be passed upon for the underwriters by Mayer,
Brown & Platt, Chicago, Illinois. Mayer, Brown & Platt provides legal services
to Motorola from time to time.

                                      S-25
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

    No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the PURS offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.

                                 ------------

                               TABLE OF CONTENTS
                             Prospectus Supplement

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
Use of Proceeds............................................................  S-3
Capitalization.............................................................  S-3
Summary Consolidated Financial Data........................................  S-4
Recent Developments........................................................  S-5
Description of the PURS....................................................  S-6
Certain United States Federal Income and Estate Tax Considerations......... S-20
Underwriting............................................................... S-24
Legal Matters.............................................................. S-25

                                   Prospectus

About This Prospectus......................................................    2
Where You Can Find More Information........................................    3
The Company................................................................    4
Use of Proceeds............................................................    4
Ratios of Earnings to Fixed Charges........................................    4
Description of Debt Securities.............................................    5
Description of Capital Stock...............................................   17
Description of Securities Warrants.........................................   20
Plan of Distribution.......................................................   23
Legal Matters..............................................................   24
Experts....................................................................   24
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                                 $

                                 Motorola, Inc.

              Puttable Reset Securities PURSSM due          , 2011

                                 ------------

                                [MOTOROLA LOGO]

                                 ------------

                              Goldman, Sachs & Co.

                PURSSM is a service mark of Goldman, Sachs & Co.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

                                    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:

<TABLE>
      <S>                                                            <C>
      Registration Fee.............................................. $  500,000
      Legal Fees and Expenses.......................................    150,000
      Trustee Fees and Expenses.....................................     30,000
      Accounting Fees and Expenses..................................    150,000
      Blue Sky and Legal Investment Fees and Expenses...............     10,000
      Printing and Engraving Fees...................................    150,000
      Rating Agency Fees............................................  1,400,000
      Listing Fees..................................................     60,000
      Miscellaneous.................................................     50,000
                                                                     ----------
          Total..................................................... $2,500,000
                                                                     ==========
</TABLE>

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 1.1 and to Section 8 of the Form of Distribution Agreement filed as
Exhibit 1.2 for a description of the contemplated indemnification arrangements.

Item 16. Exhibits

   The following Exhibits are filed as part of this Registration Statement:

<TABLE>
 <C>         <S>
         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 (incorporated by reference
             to Exhibit 3(i)(b) to the Registrant's Quarterly Report on Form
             10-Q for the quarter ended April 1, 2000 (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)).

</TABLE>


                                      II-1
<PAGE>

<TABLE>
 <C>          <S>
         4.3  By-Laws, as amended through May 2, 2000 (incorporated by
              reference to Exhibit 4.3 to the Registrant's Registration
              Statement on Form S-3 dated May 5, 2000 (File No.
              333-36320)).

         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 Instrument of Resignation, Appointment and Acceptance,
              among Motorola, Inc., Bank One Trust Company, N.A. and BNY
              Midwest Trust Company (as successor in interest to Harris Trust
              and Savings Bank).*

         4.7  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)).

         4.8  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)).

         4.9  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)).

         4.10 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)).

         4.11 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)).

         4.12 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)).

         4.13 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)).

         4.14 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 Jeffrey A. Brown, Esq.*

        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 April 14, 2000 (File No.
              333-76041)).

        23.1  Consent of Jeffrey A. Brown (included as part of Exhibit 5).

        23.2  Consent of KPMG LLP.*

        23.3  Consent of Deloitte & Touche LLP.*

</TABLE>


                                      II-2
<PAGE>

<TABLE>
 <C>         <S>
        24   Powers of Attorney (included on signature page).*

        25.1 Statement of Eligibility of Bank One Trust Company, N.A., as
             Trustee, on Form T-1.*
</TABLE>
- --------
   *Previously filed.

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
<PAGE>

                                   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 23rd day of January, 2001.

                                          MOTOROLA, INC.

                                                  /s/ Anthony M. Knapp
                                          By: _________________________________
                                                      Anthony M. Knapp
                                                 Senior Vice President and
                                                         Controller

                                   *  *  *  *

   Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to Registration Statement has been signed by the following
persons in the capacities and as of the dates indicated.

<TABLE>
<CAPTION>
             Signature                           Title                    Date
             ---------                           -----                    ----
<S>                                  <C>                           <C>
                 *                   Chairman of the Board and      January 23, 2001
____________________________________ Chief Executive Officer
        Christopher B. Galvin        (Principal Executive
                                     Officer)

                 *                   Executive Vice President and   January 23, 2001
____________________________________ Chief Financial Officer
         Carl F. Koenemann           (Principal Financial
                                     Officer)

                 *                   Senior Vice President and      January 23, 2001
____________________________________ Controller
           Anthony Knapp             (Principal Accounting
                                     Officer)

                 *                   Director                       January 23, 2001
____________________________________
           Francesco Caio

                 *                   Director                       January 23, 2001
____________________________________
           Ronnie C. Chan

                 *                   Director                       January 23, 2001
____________________________________
         H. Laurance Fuller

                 *                   Director                       January 23, 2001
____________________________________
          Robert W. Galvin

                 *                   Director                       January 23, 2001
____________________________________
         Robert L. Growney

                 *                   Director                       January 23, 2001
____________________________________
           Anne P. Jones

</TABLE>


                                      II-4
<PAGE>

<TABLE>
<CAPTION>
             Signature                           Title                    Date
             ---------                           -----                    ----
<S>                                  <C>                           <C>
                 *                   Director                       January 23, 2001
____________________________________
           Judy C. Lewent

                 *                   Director                       January 23, 2001
____________________________________
        Dr. Walter E. Massey

                 *                   Director                       January 23, 2001
____________________________________
        Nicholas Negroponte

                 *                   Director                       January 23, 2001
____________________________________
        John E. Pepper, Jr.

                 *                   Director                       January 23, 2001
____________________________________
        Samuel C. Scott III

                 *                   Director                       January 23, 2001
____________________________________
           Gary L. Tooker

                 *                   Director                       January 23, 2001
____________________________________
          B. Kenneth West

                 *                   Director                       January 23, 2001
____________________________________
         Dr. John A. White
</TABLE>

    /s/ Anthony M. Knapp
*By: __________________________
        Anthony M. Knapp
       as Attoney-in-Fact

                                      II-5
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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