PLEASE NOTE THAT ATTENDANCE AT THE MEETING WILL BE LIMITED TO STOCKHOLDERS OF MOTOROLA MOBILITY HOLDINGS, INC. AS OF THE RECORD DATE (OR THEIR AUTHORIZED REPRESENTATIVES). YOU WILL BE REQUIRED TO PROVIDE THE ADMISSION TICKET THAT IS DETACHABLE FROM YOUR NOTICE OR PROXY CARD OR PROVIDE OTHER EVIDENCE OF OWNERSHIP. IF YOUR SHARES ARE HELD BY A BANK OR BROKER, PLEASE BRING TO THE MEETING YOUR BANK OR BROKER STATEMENT EVIDENCING YOUR BENEFICIAL OWNERSHIP OF MOTOROLA MOBILITY HOLDINGS, INC. STOCK TO GAIN ADMISSION TO THE MEETING.

ABOUT THE 2011 ANNUAL MEETING

This proxy statement (the “Proxy Statement”) is being furnished to holders of common stock, $0.01 par value per share (the “Common Stock”), of Motorola Mobility Holdings, Inc. (“Motorola Mobility”, or the “Company”). Proxies are being solicited on behalf of the Board of Directors of the Company (the “Board”) to be used at the 2011 Annual Meeting of Stockholders (the “Annual Meeting”) to be held at The Westin Chicago North Shore, 601 N. Milwaukee Avenue, Wheeling, Illinois 60090 on Monday, May 9, 2011 at 1:00 P.M., local time, for the purposes set forth in the Notice of 2011 Annual Meeting of Stockholders.

This Proxy Statement, the form of proxy and the Company’s 2010 Annual Report are being made available to stockholders on or after March 15, 2011.

All stockholders may view and print Motorola Mobility’s Proxy Statement and the 2010 Annual Report at the Company’s website at http://investors.motorola.com.

VOTING PROCEDURES

Who Is Entitled to Vote?

Only stockholders of record at the close of business on March 11, 2011 (the “record date”) will be entitled to notice of, and to vote at, the Annual Meeting or any adjournments or postponements thereof. On the record date, there were 294,956,924 issued and outstanding shares of Common Stock entitled to vote at the Annual Meeting. The Common Stock is the only class of voting securities of the Company.

A list of stockholders entitled to vote at the meeting will be available for examination at the corporate offices of Motorola Mobility Holdings, Inc., 600 N. U.S. Highway 45, Libertyville, Illinois 60048 for ten days before the Annual Meeting and at the Annual Meeting.

Why Did I Receive a Notice of Internet Availability?

Pursuant to Securities and Exchange Commission rules for the electronic distribution of proxy materials, we have elected to provide our stockholders access to our proxy materials and 2010 Annual Report on the Internet instead of sending a full set of printed proxy materials to all of our stockholders. This enables us to reduce costs, provide ease and flexibility for our stockholders and lessen the environmental impact of

our Annual Meeting. On or about March 18, 2011, we intend to mail most of our stockholders a Notice of Internet Availability of Proxy Materials (a “Notice”). If you receive a Notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you request it. Instead, the Notice instructs you on how to access and review all of the important information contained in the 2011 Proxy Statement and 2010 Annual Report. The Notice also instructs you on how you may submit your proxy over the Internet or by telephone. If you receive a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice.

How Can I Vote Without Attending the Annual Meeting?

There are three convenient methods for registered stockholders to direct their vote by proxy without attending the Annual Meeting. Stockholders can:

If you are a beneficial owner, or you hold your shares in “street name,” please check your voting instruction card or contact your bank, broker or nominee to determine whether you will be able to vote by Internet or telephone.

How Can I Change My Vote?

Registered stockholders can revoke their proxy at any time before it is voted at the Annual Meeting by either:

If your shares are held in the name of a bank, broker or other nominee, you must obtain a proxy, executed in your favor, from the holder of record (that is, your bank, broker or nominee) to be able to vote at the Annual Meeting.

How Many Votes Must be Present to Conduct Business at the Annual Meeting?

In order for business to be conducted, a quorum must be represented in person or by proxy at the Annual Meeting. A quorum is a majority of the shares entitled to vote at the Annual Meeting. Shares represented by a proxy marked “abstain” will be considered present at the Annual Meeting for purposes of determining a quorum.

How Many Votes am I Entitled to Cast?

You are entitled to cast one vote for each share of Common Stock you own on the record date. Stockholders do not have the right to vote cumulatively in electing directors.

How Many Votes Are Required to Elect Directors?

Our Board of Directors has adopted through the Company’s Bylaws and Board Governance Guidelines a majority vote standard for non-contested director elections. Because the number of nominees properly nominated for the 2011 Annual Meeting is the same as the number of directors to be elected at the 2011

Annual Meeting, the 2011 election of directors is a non-contested election. To be elected in a non-contested election, a director nominee must receive more “For” votes than “Against” votes. Abstentions will have no effect on the director election since only votes “For” and “Against” a nominee will be counted.

How Many Votes Are Required to Approve the Company’s Advisory Vote on Executive Compensation?

With regard to the stockholder advisory vote on executive compensation, the affirmative vote of the holders of a majority of the shares present in person or by proxy and entitled to vote at the Annual Meeting will be required for advisory approval of the Company’s executive compensation. Abstentions will have the same effect as a vote “Against” the proposal.

How Many Votes are Required to Approve the Frequency of Future Stockholder Votes on Executive Compensation?

With regard to the stockholder advisory vote on the frequency of the advisory vote on executive compensation, the affirmative vote of the holders of a majority of the shares present in person or by proxy and entitled to vote at the Annual Meeting will be required for advisory approval. The Board will consider the outcome of the vote when making future decisions regarding the frequency of advisory votes on executive compensation, recognizing that such vote is advisory. Abstentions will have the same effect as a vote “Against” the proposal.

How Many Votes Are Required to Ratify the Appointment of KPMG LLP as our Independent Registered Public Accounting Firm?

The affirmative vote of the holders of a majority of the shares present in person or by proxy and entitled to vote at the Annual Meeting will be required to ratify the selection of KPMG LLP. Abstentions will have the same effect as a vote “Against” the proposal.

Will My Shares be Voted if I Do Not Provide Instructions to My Broker?

If you are the beneficial owner of shares held in “street name” by a broker, the broker, as the record holder of the shares, is required to vote those shares in accordance with your instructions. If you do not give instructions to the broker, the broker will be entitled to vote the shares with respect to “discretionary” items,

but will not be permitted to vote the shares with respect to “non-discretionary” items (resulting in a “broker non-vote”).

These so-called “broker non-votes” will be included in the calculation of the number of votes considered to be present at the meeting for the purposes of determining a quorum, but will not be considered in determining the number of votes necessary for approval and will have no effect on the outcome of the votes for (1) the election of directors, (2) the advisory vote on executive compensation, or (3) the advisory vote on the frequency of future advisory votes on executive compensation. Only the ratification of the appointment of KPMG LLP is a “discretionary” item for which brokers would be permitted to vote your shares in the absence of your instructions.

Who Represents My Proxy at the Annual Meeting?

If you do not vote in person at the Annual Meeting, but have voted your shares over the Internet, by telephone or by signing and returning your proxy card, you have authorized certain members of Motorola Mobility’s senior management designated by the Board and named in your proxy to represent you and to vote your shares as instructed.

How does the Board Recommend I vote?

The Board of Directors recommends that you vote your shares:

What if I Return a Proxy But Do Not Provide Specific Voting Instructions For Some or All of the Items?

All shares that have been properly voted—whether by Internet, telephone or mail—and not revoked will be voted at the Annual Meeting in accordance with your instructions. If you sign your proxy but do not give voting instructions, the shares represented by that proxy will be voted as recommended by the Board of Directors.

What if Other Matters Are Voted on at the Annual Meeting?

If any other matters are properly presented at the Annual Meeting for consideration and if you have voted your shares by Internet, telephone or mail, the persons named as proxies in your proxy will have the discretion to vote on those matters for you. At the date we filed this Proxy Statement with the Securities and Exchange Commission, the Board of Directors did not know of any other matter to be raised at the Annual Meeting.

How Do I Vote if I Participate in the Company’s 401(k) Plan?

If you own shares of Motorola Mobility Common Stock through the transitional Company stock fund of the 401(k) Plan (the “401(k) Plan”) at Motorola Mobility or our Former Parent, the Notice or proxy card includes the shares you hold in the 401(k) Plan as well as the shares you hold outside of the 401(k) Plan. Under the 401(k) Plan, participants are “named fiduciaries” to the extent of their authority to direct the voting of shares of Common Stock credited to their 401(k) Plan accounts and their proportionate share of allocated shares for which no direction is received and unallocated shares, if any (together, “Undirected Shares”). The trustee of the 401(k) Plan will vote Undirected Shares in the same proportion as the shares for which directions are received, except as otherwise provided in accordance with ERISA. By submitting voting instructions by Internet, telephone, or if hardcopies are requested, by signing, dating and returning the proxy card, you direct the trustee of the 401(k) Plan to vote these shares, in person or by proxy, as designated therein, at the Annual Meeting.

CORPORATE GOVERNANCE MATTERS

What Are the Board’s Corporate Governance Principles?

As a new independent company, the Board established governance principles designed to reflect the current governance environment. These governance principles are included in the Board Governance Guidelines, the Certificate of Incorporation, the Bylaws, the committee charters and other important policies of the Board and the Company. The new Board has considered important areas of governance, including the rights of the stockholders, the role of Board and the responsibilities of management in developing the governance structure. The Board is committed to reviewing corporate best practices and assessing if adoption of such practices is in the best interest of the Company. The Board recognizes that there are differing views on what is a “best practice” and has carefully determined what it believes is in the best interest of the Company and its stockholders, especially as a new public company.

What Are Some of the Major Corporate Governance Initiatives the Board Has Adopted?

Some of the major corporate governance best practices that the Board has adopted include: an election of all of our directors annually by a majority voting standard for uncontested director elections; no existing stockholder rights plan (commonly known as a “poison pill”); the ability for holders of 20% or more of Motorola Mobility’s Common Stock to request a special meeting of stockholders; and a recoupment policy to recover certain executive pay in the event of misconduct leading to a financial restatement (commonly known as a “clawback policy”). Further, the Board is recommending in this proxy statement that stockholders approve an annual frequency for the “Say-on-Pay” vote.

What Are our Directors’ Qualifications to Serve on the Motorola Mobility’s Board?

The Board believes it should be comprised of individuals with appropriate skills and experiences to meet board governance responsibilities and contribute effectively to the Company. Pursuant to its charter, the Governance and Nominating Committee will carefully consider the skills and experiences of directors and nominee candidates to ensure that they meet the needs of the Company before nominating directors for election to the Board. All of our non-employee directors are expected to serve on Board committees,

further supporting the Board by providing expertise to those committees. The needs of the committees will also be reviewed when considering nominees to the Board.

The Board is comprised of active and former senior executives of major corporations and individuals with experience in various fields. As such, they have a deep working knowledge of matters common to large companies, generally including experience with financial statement preparation, compensation determinations, regulatory compliance, corporate governance, public affairs and legal matters. Many of our directors serve on the boards of one or more other publicly traded companies. We believe the Company benefits from the diverse experience and expertise our directors gain from serving on those boards. We also believe for effective board governance and collaboration it is important to have Dr. Jha, our CEO, serve on the Board.

As a new independent company, we had the opportunity to create a Board of Directors tailored specifically to the needs and strategic vision of the Company with a balance of former Motorola, Inc. directors and new directors with technological, consumer, media and financial expertise. Our directors are qualified to serve as directors and members of the Committees on which they serve based on the biographical information in “Who Are the Nominees?” and on the following.

Mr. Barfield contributes the type of experience and qualifications the Board seeks to maintain, primarily through his experiences as a senior leader, including as the chief executive officer for over 15 years of a talent acquisition and management firm specializing in placement of engineering and technology professionals, business process consulting services and management of staffing requirements for regional and global corporations, his legal background, his service as the presiding director of BMC Software, Inc. and as a director of CMS Energy Corporation, and his past service as a director of several other large public companies. As a member of our Board and Compensation and Leadership and Governance and Nominating Committees, Mr. Barfield is well positioned to oversee the Company’s programs designed to attract and retain key talent, particularly engineers and other highly skilled employees, which is necessary for the Company to remain competitive.

Mr. Hambrecht contributes the type of experience and qualifications the Board seeks to maintain, primarily through over 40 years of extensive Silicon Valley related investment banking and investing

experience. His deep knowledge of the high-tech market is very valuable to the Board and management as we operate in an extremely competitive environment characterized by rapidly changing technology. Previously serving on the board of AOL, Inc., another recent spin-off, he also understands the challenges faced by recently independent public companies and particularly imparts this expertise as Chair of the Governance and Nominating Committee. He also brings historical knowledge of our business from his recent service as a director of Motorola, Inc.;

Ms. Jackson contributes the type of experience and qualifications the Board seeks to maintain, primarily through over 30 years of experience in retail, design, marketing, brand management and distribution expertise. With extensive experience as the president of Direct to Consumer for Nike, Inc., chief executive officer of Wal-Mart.com and similar leadership roles for several other major consumer companies, including at Walt Disney and The Gap, she understands the consumer space and provides valuable perspective to the Board and management as the Company executes on its strategy to enable the digital lifestyle by enabling multi-screen experiences through multiple types of devices. Her experience operating a private investment firm and financial background qualifies her to serve on our Audit Committee;

Dr. Jha contributes the type of experience and qualifications the Board seeks to maintain, primarily through his role as the chief executive officer of the Company and intimate knowledge of the Company’s strategy and operations, together with the reasons discussed in “What is the Leadership Structure of the Board?”;

Mr. Meister contributes the type of experience and qualifications the Board seeks to maintain, primarily through his significant financial expertise in the high-tech market with experience as founder and managing partner of investment management firm and as a senior executive of a diversified holding company and investment companies overseeing the investment and management of a variety of companies, including high-tech companies. His extensive knowledge of financial matters, particularly of large institutional and fund investors, is important to the Board and management as the Company operates as a new public company and in connection with his service on the Audit Committee and Compensation and Leadership Committee. He also brings historical knowledge of our business from his recent service as a director of Motorola, Inc.;

Mr. Meredith contributes the type of experience and qualifications the Board seeks to maintain, primarily through his extensive financial experience, including as a co-founder and the general partner of an investment management firm with a diversified portfolio of investments with a focus on high-tech companies and as the former chief financial officer of a global public high-tech computing company. His extensive knowledge of our business and the computing business is especially critical with the convergence of the wireless, media, the Internet and computing industries. He also brings deep historical knowledge of our business from his recent service as a director of Motorola, Inc. and as interim chief financial officer for Motorola, Inc. and particularly imparts this expertise as Chair of the Audit Committee;

Mr. Ninivaggi contributes the type of experience and qualifications the Board seeks to maintain, primarily through experience as a chief executive of a diversified holding company overseeing the investment and management of variety of companies, including high-tech companies, varied business and legal experience, including as a partner in a major law firm specializing in corporate finance and mergers and acquisitions, and his service as a director of other public companies. As a representative of our largest stockholder, he provides a unique viewpoint at our Board and Audit Committee meetings;

Mr. Stengel contributes the type of experience and qualifications the Board seeks to maintain, primarily through his deep experience in marketing and branding of consumer facing products and services. As the founder of a brand strategy and marketing think tank and consultancy firm serving many different companies, with a long career at Procter & Gamble, including as its chief marketing officer, and together with his recent service as a director of Motorola, Inc., he provides unique perspective to the Board and management as the Company executes on its strategy to enable the digital lifestyle by enabling multi-screen experiences through multiple types of devices. Serving on the board and as the compensation committee chair of AOL, Inc., another recent spin-off, he also understands the challenges faced by recently independent public companies and particularly imparts this expertise as Chair of the Compensation and Leadership Committee;

Mr. Vinciquerra contributes the type of experience and qualifications the Board seeks to maintain, primarily through his extensive experience in the media business. As a senior leader at News Corporation, most

recently as the chairman and chief executive officer of the Fox Network Group, the primary operating unit of News Corporation, Mr. Vinciquerra has been closely involved in the media revolution occurring over the last ten years. At Fox Network Group, he oversaw television networks, cable networks, networks operations and engineering and interests in sports franchises. His media experience is especially critical with the convergence of the wireless, media, the Internet and computing industries. He also brings historical knowledge of our business from his recent service as a director of Motorola, Inc. For many of these reasons, he is a strong contributor as Lead Director and on the Governance and Nominating Committee; and

Dr. Viterbi contributes the type of experience and qualifications the Board seeks to maintain, primarily through technical expertise in the digital communication industry and his experience as co-founder of Qualcomm, Inc., a wireless telecommunication company. His technical achievements include the creation of the Viterbi Algorithm, which was critical to the development of digital communication. As an eminent technologist and professor of electrical engineering, he has deep knowledge concerning relevant technology, the Company’s market and engineering, which is highly valued by the Board.

Which Directors Are Independent?

On December 13, 2010, the Board made the determination in accordance with the Motorola Mobility Board Governance Guidelines and consistent with the NYSE standards regarding independence, that Mr. Barfield, Mr. Hambrecht, Mr. Meister, Mr. Meredith, Mr. Ninivaggi, Mr. Stengel, Mr. Vinciquerra and Dr. Viterbi were independent. On January 8, 2011, the Board also determined that Ms. Jackson was independent under the same guidelines. Dr. Jha does not qualify as an independent director since he is an employee of the Company.

How Was Independence Determined?

The Motorola Mobility Board Governance Guidelines are based upon the NYSE independence standards. When applying the independence standards “Motorola Mobility” includes Motorola Mobility Holdings, Inc. and any of its subsidiaries and the Motorola Mobility Foundation. A complete copy of the Motorola Mobility Board Governance Guidelines with independence standards is available on the Company’s website at http://investors.motorola.com.

What is Motorola Mobility’s Relationship with Entities Associated with Independent Directors?

For each director that is identified as independent, the Board reviewed under the NYSE’s independence standards included in the Motorola Mobility Board Governance Guidelines any transactions, relationships or arrangements with the Company and its Former Parent in determining that the director is independent. Commercial relationships were reviewed for: Mr. Hambrecht in connection with a marketing agreement with the United Football League; Mr. Ninivaggi in connection with a supplier arrangement between the Company and a supplier where a family member is an executive officer; and Mr. Vinciquerra in connection with a sales agreement between the Company and a subsidiary of the Fox Networks Group. In each case, the payments were significantly less than the NYSE independence standards and were determined by the Board to be immaterial.

Are the Members of the Audit, Compensation and Leadership and Governance and Nominating Committees Independent?

Yes. The Board has determined that all of the current members of the Audit Committee, the Compensation and Leadership Committee and the Governance and Nominating Committee are independent within the meaning of the Motorola Mobility Board Governance Guidelines and the NYSE listing standards for independence.

Where Can I Receive More Information About Motorola Mobility’s Corporate Governance Practices?

Motorola Mobility maintains a corporate governance page on its website at http://investors.motorola.com that includes information about its corporate governance practices. The following Motorola Mobility documents are currently included on the website:

•  Board Governance Guidelines, the current version of which the Board adopted on December 13, 2010;

•  Code of Business Conduct, which applies to all employees and directors effective January 4, 2011;

•  The charters of the Audit, Compensation and Leadership and Governance and Nominating Committees, the current versions of which the Board adopted on December 13, 2010;

•  The Restated Certificate of Incorporation, as amended through December 15, 2010; and

•  The Restated Bylaws, the current version of which the Board adopted on November 30, 2010.

The Company intends to disclose amendments to the above documents or waivers applicable to its directors, chief executive officer, chief financial officer or corporate controller from certain provisions of its ethical policies and standards for directors and its employees, on the Motorola Mobility website within four business days following the date of the amendment or waiver.

SEPARATION FROM MOTOROLA, INC.

How Was Motorola Mobility Recently Separated from Motorola, Inc.?

On January 4, 2011 (the “Distribution Date”), Motorola Mobility Holdings, Inc. became an independent, publicly traded company (the “Separation”) as a result of Motorola, Inc.’s distribution of its shares of Motorola Mobility to Motorola, Inc. stockholders. On the Distribution Date, Motorola, Inc. stockholders of record as of the close of business on December 21, 2010 (the “Record Date”) were entitled to receive one share of Motorola Mobility Common Stock for every eight shares of Motorola, Inc. common stock held as of the Record Date (the “Distribution”). Motorola Mobility is comprised of Motorola, Inc.’s former Mobile Devices and Home businesses. Motorola, Inc.’s Board of Directors approved the distribution of its shares of Motorola Mobility Holdings, Inc. on November 30, 2010. Our Registration Statement on Form 10 was declared effective by the U.S. Securities and Exchange Commission on December 1, 2010. Our Common Stock began trading “regular way” under the ticker symbol “MMI” on the New York Stock Exchange on January 4, 2011.

Motorola, Inc. changed its name to Motorola Solutions, Inc. (hereinafter, our “Former Parent”) effective on Separation on January 4, 2011. For further information, see our amended Registration Statement on Form 10 filed with the SEC.

BOARD OF DIRECTORS MATTERS

How Often Did the Board Meet in 2010?

In preparation for the Separation of Motorola Mobility from our Former Parent on January 4, 2011, the Board of Directors held one meeting during 2010.

Overall attendance at Board and committee meetings was 100%. Each incumbent director attended all of the combined total meetings of the Board and the committees on which such director served during 2010.

Our Chairman and CEO, Dr. Jha and CFO, Mr. Rothman served as interim management members of our board of directors during 2010 until November 30, 2010, when seven non-employee directors were elected by our Former Parent, replacing Mr. Rothman in preparation for the Separation on January 4, 2011. On January 4, 2011 and January 8, 2011, two additional directors were elected by our Board. This Proxy Statement discusses the full public company Board.

How Many Directors Comprise the Board?

The Board of Directors is currently comprised of ten directors. Immediately following the Annual Meeting, the Board will consist of ten directors. In the interim between Annual Meetings, the Board has the authority under the Company’s Bylaws to increase or decrease the size of the Board and to fill vacancies.

How Many Executive Sessions of the Board Were Held in 2010?

Independent directors of the Company meet regularly in executive session without management as required by the Motorola Mobility Board Governance Guidelines. Generally, executive sessions are held in conjunction with regularly-scheduled meetings of the Board of Directors. In 2010, the non-employee independent members of the Board met in executive session one time during the one Board meeting held in anticipation of the Separation.

What is the Leadership Structure of the Board? Why was that Structure Chosen? Who Serves as Chairman of the Board and Lead Director?

Dr. Jha serves as Chairman of the Board, in addition to his role as Chief Executive Officer of the Company. Mr. Vinciquerra serves as an independent Lead Director (the “Lead Director”). The Board has chosen this leadership structure, because it believes such structure is in the best interests of stockholders to enhance communication and efficiency and to implement strategic priorities of the Company, particularly as the Company is a recent independent public company separated from our Former Parent. Further, the combined role fosters clear accountability and agile decision making, which is particularly important at this time and in the industries in which we compete. Approximately 60% of the S&P 500 have

combined CEO-Chairman roles and only approximately 19% of the S&P 500 have an independent non-executive Chair, according to a recent survey. As with all corporate governance, the Board intends to carefully evaluate from time to time the best governance for the Company. The Lead Director acts as the presiding director at meetings of the independent directors; advises on Board meeting agendas, materials and schedules; acts as liaison between the independent directors and the Chairman and CEO; is available to speak on behalf of the Company; assists the Chairman and CEO as requested; and performs other duties as the Board determines.

Will the Directors Attend the Annual Meeting?

Board members are expected to attend the Annual Meeting as provided in the Motorola Mobility Board Governance Guidelines. This is the nominees’ first election to the Motorola Mobility Board as a publicly-held company.

What is the Board’s Role in the Oversight of Risks?

The Board of Directors oversees the business of the Company, including CEO and senior management performance and risk management, to assure that the long-term interests of the stockholders are being served. Each committee of the Board of Directors is also responsible for reviewing the risk exposure of the Company related to the committee’s areas of responsibility and providing input to management on such risks.

Management has a robust process embedded throughout the Company to identify, analyze, manage and report all significant risks facing the Company. Each Board committee reviews with management significant risks related to the committee’s area of responsibility and reports to the Board on such risks, which includes the Compensation and Leadership Committee’s review of Company-wide compensation-related risks. The independent Board members also discuss the Company’s significant risks when they meet in executive session without management.

Our Company’s Audit department has a very important role in the risk management program. The role of the department is to provide management and the Audit Committee with an overarching and objective view of the risk management activity of the enterprise. The department’s engagements span financial, operational, strategic and compliance risks and the engagement results assist management in

maintaining tolerable risk levels. The director of the department works directly with the Audit Committee and meets regularly with the Committee, including in executive session.

What Are the Committees of the Board?

To assist it in carrying out its duties, the Board has delegated certain authority to several committees. The Board currently has the following committees: (1) Audit, (2) Compensation and Leadership, and (3) Governance and Nominating. Committee membership as of January 8, 2011 is indicated below. In preparation for the Separation of Motorola Mobility from our Former Parent on January 4, 2011, the number of meetings held during 2010 are also indicated below:

Where Can I Locate the Current Committee Charters?

Current versions of the Audit Committee charter, Compensation and Leadership Committee charter and Governance and Nominating Committee charter are available on our website at http://investors.motorola.com.

What Are the Functions of the Audit Committee?

Assisting the Board of Directors in fulfilling its oversight responsibilities as they relate to:

The Audit Committee is comprised of four members each of whom meet the independence requirements set forth in the applicable listing standards of the SEC and the NYSE and in accordance with the Audit Committee charter. Each member of the Audit Committee is financially literate and has accounting or related financial management expertise as such terms are interpreted by the Board of Directors in its business judgment.

A more detailed discussion of the Committee’s mission, composition and responsibilities is contained in the Audit Committee charter, which is available on the Company’s website: http://investors.motorola.com.

What Are the Functions of the Compensation and Leadership Committee?

Assisting the Board of Directors in overseeing the management of our Company’s human resources as they relate to:

The Compensation and Leadership Committee is comprised entirely of independent directors, each of whom meets the NYSE listing independence standards and our Company’s independence standards.

In carrying out its duties, the Compensation and Leadership Committee has direct access to outside advisors, independent compensation consultants and others to assist them.

A more detailed discussion of the Committee’s mission, composition and responsibilities is contained in the Compensation and Leadership Committee charter, which is available on the Company’s website: http://investors.motorola.com.

What Are the Functions of the Governance and Nominating Committee?

The Governance and Nominating Committee is comprised entirely of independent directors, each of whom meets the NYSE listing independence standards and our Company’s independence standards.

A more detailed discussion of the Committee’s mission, composition and responsibilities is contained in the Governance and Nominating Committee charter, which is available on the Company’s website: http://investors.motorola.com.

What is the Decision-Making Process to Determine Director Compensation?

Our Board approved the compensation for non-employee directors at its meeting on December 13,

2010 in preparation for the Separation from our Former Parent. The non-employee director compensation package was recommended by Compensia, Inc. (“Compensia”), our Board’s independent compensation consultant. The non-employee director compensation was determined to be consistent with market practices of other similarly situated companies and took into consideration the impact on non-employee directors’ independence and objectivity. The Governance and Nominating Committee will recommend any future changes to such non-employee director compensation to the Board. In carrying out its duties, the Governance and Nominating Committee has direct access to outside advisors, including independent compensation advisors. The charter of the Governance and Nominating Committee does not permit the Committee to delegate director compensation matters to management and management has no role in recommending the amount or form of director compensation.

What is the Decision-Making Process to Determine Executive Compensation?

Our Board delegated to its Compensation and Leadership Committee the responsibility to oversee the programs under which compensation is paid or awarded to our executives and to evaluate the performance of our senior management. The Compensation and Leadership Committee is responsible for bringing recommended compensation actions involving the Chairman and CEO to the Board for its concurrence. The Global Compensation department in the Human Resources organization supports the Compensation and Leadership Committee in its work and, in some cases, may act pursuant to delegated authority from the Compensation and Leadership Committee to fulfill various functions in administering its compensation programs.

In carrying out its duties, our Compensation and Leadership Committee has direct access to outside advisors, independent compensation consultants and others to assist them. Our Compensation and Leadership Committee employs its own independent compensation consultant to assist in its compensation decisions for the Company’s executive officers, as discussed below. Further, for a discussion of the role of our Former Parent’s Compensation and Leadership Committee’s independent compensation consultant in determining 2010 compensation for our Named Executive Officers, see the section entitled “Former Parent’s Independent Consultant Engagement” in the “Compensation Discussion and Analysis”.

What is the Role of Independent Compensation Consultants in Executive and Director Compensation Determinations?

In accordance with our Former Parent’s Compensation and Leadership Committee’s charter, the Committee has the sole authority, to the extent deemed necessary and appropriate, to retain and terminate any compensation consultants, outside counsel or other advisors, including the sole authority to approve the firm’s or advisor’s fees and other retention terms.

In accordance with this authority, in mid-2010, our Former Parent’s Compensation and Leadership Committee retained Compensia to provide independent compensation services to Motorola Mobility. In December 2010, our Compensation and Leadership Committee retained Compensia in this capacity. Compensia provided insight and advice on matters regarding trends in executive compensation, relative executive pay and benefits practices, relative assessment of pay to performance of our executives, and may cover other topics as the Compensation and Leadership Committee deems appropriate. See the section entitled “Former Parent’s Independent Consultant Engagement” in the “Compensation Discussion and Analysis” for further details on the consultant engagement.

Compensia maintains no other direct or indirect business relationship with the Company. In addition to the independent, outside compensation consultant, members of our human resources, legal and finance departments support our Compensation and Leadership Committee in its work.

What Role, if any, do Executive Officers Play in Determining or Recommending Executive and Director Compensation?

Our senior corporate staff, comprised of the Chairman and CEO and certain executives designated by the Chairman and CEO, provides recommendations regarding the design of the Company’s compensation program to the Compensation and Leadership Committee. Additionally, the Committee’s compensation consultant provides input on these recommendations from time to time. Upon Compensation and Leadership Committee approval, the senior corporate staff is responsible for executing the objectives of the approved compensation program.

Each member of our senior corporate staff is ultimately responsible for approving all compensation actions for their respective organizations. When these

compensation actions involve other Motorola Mobility executives, the involved senior corporate staff member is accountable for ensuring adherence to all established governance procedures.

The Chairman and CEO is responsible for recommending all compensation actions involving any officer subject to Section 16 of the Securities Exchange Act of 1934, as amended (a “Section 16 Officer”) and other key senior officers, to the Compensation and Leadership Committee for its approval. The Chairman and CEO takes an active role in Compensation and Leadership Committee meetings at which compensation actions involving the above officers are discussed.

As discussed above, our Compensation and Leadership Committee directly engages an independent outside consulting firm to assist it in its review of the compensation for Motorola Mobility’s senior corporate staff. This consultant also participates in certain Committee meetings.

The Global Compensation department in Motorola Mobility’s Human Resources organization, the Senior Vice President, Chief People Officer and the Committee’s independent compensation consultant together prepare recommendations regarding Chairman and CEO compensation and brings those recommendations to our Compensation and Leadership Committee. The Chairman and CEO is not involved in the preparation of recommendations related to his compensation and does not participate in the discussions regarding his compensation at Committee meetings. The consultant is also available at such meetings.

Our Compensation and Leadership Committee is responsible for bringing recommended compensation actions involving the Chairman and CEO to the independent members of the Board for their concurrence. The Compensation and Leadership Committee cannot unilaterally approve compensation changes for the Chairman and CEO.

As stated above, management does not recommend or determine director compensation.

What Are the Director Stock Ownership Guidelines?

Our Board Governance Guidelines provide that, within five years of joining the Board, directors are expected to own Motorola Mobility Common Stock with a value equivalent to at least five times the annual retainer fee for directors for a total value of $375,000. For the purposes of these guidelines, Motorola Mobility Common Stock includes stock units.

How Are the Directors Compensated?

Our non-employee director compensation is designed to provide competitive compensation and benefits that will attract and retain high quality directors, target director compensation at a level that is consistent with our compensation objectives and encourage ownership of our stock to further align directors’ interests with those of our stockholders.

Our Board of Directors approved the following non-employee director compensation, effective in connection with the Separation, which was developed with the assistance of Compensia, our Board’s independent compensation consultant.

Non-employee directors do not receive any additional fees for attendance at meetings of the Board or its committees or for additional work done on behalf of the Board or a committee. Dr. Jha, who is an employee of Motorola Mobility, receives no additional compensation for serving on the Board or its committees.

Deferral of Fees. Director retainers and other fees are paid quarterly. A non-employee director may elect to receive all or a portion of his or her retainer and other fees in the form of restricted stock units (“RSUs”). The RSUs received in lieu of a retainer and other fees will be fully vested and paid in the form of shares of Common Stock upon the deferral date specified by the director.

Annual Equity Award. Annually, each non-employee director will receive an equity award with an aggregate fair market value on the date of grant of $150,000, 50% of which will be in stock options and 50% of which will be in RSUs. These equity awards will fully vest on the first anniversary of the date of grant. The number of RSUs are determined by dividing the value by the closing price of our Common Stock on the date of grant. The

number of shares of our Common Stock to be acquired pursuant to a stock option will be determined based upon the Company’s standard method for valuing stock options for financial accounting purposes. The stock options are granted with an exercise price equal to the closing price of our Company’s stock on the date of grant and are exercisable for ten years from the date of grant. The settlement of vested RSUs received from such equity award may be deferred. The annual grant for directors is expected following the annual meetings of stockholders.

Pro Rated Annual Equity Award. A non-employee director who joins our Board after the annual grant will receive an equity award upon joining our Board which

will be pro rated based on the number of months to be served until the next annual equity award ($12,500 per month) divided by the closing price of our stock on the day of the award. These pro rata equity awards will fully vest on the first anniversary of the date of grant, unless otherwise determined by the Board. A pro rated annual equity award for the non-employee directors was made on January 28, 2011 to all non-employee directors, other than Ms. Jackson whose award was granted on February 1, 2011, for months of service until the 2011 annual meeting of stockholders. These pro rated awards vest on the last business day before the 2011 annual meeting of stockholders.

Director Insurance Coverage

Non-employee directors are covered by insurance that provides accidental death and dismemberment coverage of $500,000 per person. The spouse of each such director is also covered by such insurance when traveling with the director on business trips for the Company. The Company pays the premiums for such insurance. As a subsidiary of our Former Parent throughout 2010, no premiums were separately paid by Motorola Mobility for coverage of non-employee directors and their spouses during the year ended December 31, 2010.

What is the Process for Identifying and Evaluating Director Candidates?

As stated in the Motorola Mobility Board Governance Guidelines, when selecting directors, the Board and the Governance and Nominating Committee will review and consider many factors, including experience in the context of the Board’s needs, leadership qualities, diversity, ability to exercise sound judgment, existing time commitments and independence. It will also consider ethical standards and integrity.

The Governance and Nominating Committee will consider nominees recommended by Motorola Mobility stockholders provided that the recommendation contains sufficient information for the Governance and Nominating Committee to assess the suitability of the candidate, including the candidate’s qualifications. Candidates recommended by stockholders that comply with these procedures will receive the same consideration that candidates recommended by the Committee and management receive.

The Governance and Nominating Committee will consider recommendations from many sources, including members of the Board and search firms. During 2010, in connection with the Separation, our Former Parent’s board of directors recommended Mr. Hambrecht, Dr. Jha, Mr. Meister, Mr. Meredith, Mr. Stengel and Mr. Vinciquerra. Mr. Barfield and Ms. Jackson were identified by a search firm and our chief executive officer identified Mr. Viterbi as potential director candidates. Carl C. Icahn and his related entities, our largest stockholder, recommended Mr. Ninivaggi as a director candidate and the Company agreed to nominate him for 2010 through 2013 pursuant to a Letter Agreement with the Company dated November 30, 2010 attached to our amended Registration Statement on Form 10. From

time to time, we expect that Motorola Mobility will hire global search firms to help identify and facilitate the screening and interview process of director nominees. We expect that the search firm will screen candidates based on the Board’s criteria, perform reference checks, prepare a biography for each candidate for the Committee’s review and help arrange interviews. The Committee will conduct interviews with candidates who meet the Board’s criteria and will do a robust assessment of the candidate. In 2010, a global executive search firm was retained to help identify director prospects, perform candidate outreach and provide other related services.

PROPOSAL NO. 2

ADVISORY APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION

As a newly independent public company on January 4, 2011, the Motorola Mobility Board and management have thoughtfully redesigned our executive compensation objectives, policies and programs for the businesses we are in and the strategic mission of the Company.

Principles for Motorola Mobility’s New Compensation Program

Our compensation programs are designed to be strongly linked to performance by:

Our “at-risk” compensation programs (both short- and long-term) provide for significant upside for superior performance and downside for underperformance and align executives’ interests to those of our stockholders.

New Program and Practices

For 2011, Motorola Mobility, together with our Chairman and CEO, have made several program decisions intended to enhance the effectiveness of rewards and align them to current best practices. For

example, both our Chairman and CEO and our NEOs hired in 2010 voluntarily agreed to forego a tax gross up on a change in control. We have also eliminated tax gross ups under the change in control severance plan for newly hired or promoted executives and notified other participants that we are eliminating tax gross ups once the three year notice period under the Former Parent’s plan is concluded.

Several other program improvements are outlined in more detail in “Our New Rewards Programs and Practices After Separation and Specific Improvements” section in the “Compensation Discussion and Analysis”.

Pursuant to Section 14A of the Securities Exchange Act, we are seeking stockholder advisory approval, commonly known as a “Say-on-Pay”, of the compensation of our Named Executive Officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the policies and practices described in this Proxy Statement, through consideration of the following non-binding advisory resolution:

“Resolved, that the stockholders advise that they approve the compensation of the Company’s Named Executive Officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables and any related material in this Proxy Statement.”

Although your vote is advisory and not binding upon the Board, the Board and its Compensation and Leadership Committee take the outcome of the vote expressed by its stockholders into consideration for future executive compensation arrangements.

RECOMMENDATION OF THE BOARD

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADVISORY APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION. UNLESS OTHERWISE INDICATED ON YOUR PROXY, YOUR SHARES WILL BE VOTED FOR THE APPROVAL OF THE EXECUTIVE COMPENSATION.

PROPOSAL NO. 3

ADVISORY APPROVAL OF THE FREQUENCY OF FUTURE STOCKHOLDER VOTES ON EXECUTIVE COMPENSATION

The Company’s stockholders are being provided the opportunity to cast a non-binding, advisory vote on the frequency of how often the Company should include an advisory vote on executive compensation or a “Say-on-Pay” in its proxy materials for future annual stockholder meetings and certain special meetings, when applicable, pursuant to Section 14A of the Securities Exchange Act.

Stockholders may vote under this proposal to hold a “Say-on-Pay” advisory vote on executive compensation every year, every two years or every three years.

Our Board is recommending an annual advisory vote on executive compensation.

RECOMMENDATION OF THE BOARD

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR AN ANNUAL ADVISORY VOTE ON EXECUTIVE COMPENSATION EVERY ONE YEAR. UNLESS OTHERWISE INDICATED ON YOUR PROXY, YOUR SHARES WILL BE VOTED FOR AN ANNUAL ADVISORY VOTE ON EXECUTIVE COMPENSATION EVERY ONE YEAR.

PROPOSAL NO. 4

RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2011

The Audit Committee of the Board has appointed KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2011. Services provided to the Company and its subsidiaries by KPMG LLP in fiscal year 2010 are described under “Audit Committee Matters—Independent Registered Public Accounting Firm Fees”.

We are asking our stockholders to ratify the appointment of KPMG LLP as our independent registered public accounting firm. Although ratification is not required by our Bylaws or otherwise, the Board is submitting the appointment of KPMG LLP to our stockholders for ratification as a matter of good corporate practice.

Representatives of KPMG LLP will be present at the Annual Meeting to respond to appropriate questions and to make such statements as they may desire.

The affirmative vote of the holders of a majority of the shares present in person or by proxy and entitled to vote at the Annual Meeting will be required to ratify the appointment of KPMG LLP. Abstentions will have the same effect as a vote “Against” the proposal.

In the event stockholders do not ratify the appointment, the appointment will be reconsidered by the Audit Committee and the Board. Even if the appointment is ratified, the Audit Committee in its discretion may appoint a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders.

RECOMMENDATION OF THE BOARD

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2011. UNLESS OTHERWISE INDICATED ON YOUR PROXY, YOUR SHARES WILL BE VOTED FOR THE RATIFICATION OF KPMG LLP.

EQUITY COMPENSATION PLAN INFORMATION

The Company’s did not have any outstanding shares issued under a Company equity compensation plan as of December 31, 2010.

COMPENSATION DISCUSSION AND ANALYSIS

Prior to the Separation from Motorola, Inc. (the “Former Parent”) on January 4, 2011, Motorola Mobility Holdings, Inc. (“Motorola Mobility” or the “Company”) was a subsidiary of the Former Parent and each Named Executive Officer (“Named Executive Officer” or “NEO”) was employed by the Former Parent or its subsidiaries. In connection with the Separation, in December 2010, the board of directors of Motorola Mobility (our “Board”) formed its own Compensation and Leadership Committee. In this Compensation Discussion and Analysis, we refer to the Compensation and Leadership Committee of the Former Parent as the “Former Parent Compensation Committee” and the Compensation and Leadership Committee of Motorola Mobility as “our Compensation Committee”. As a newly independent public company, our Compensation Committee determines the Company’s executive compensation for 2011 and beyond.

MOTOROLA MOBILITY

Our New Rewards Objectives and Guidelines After Separation

As a newly independent public company on January 4, 2011, we have the opportunity to redesign our executive compensation objectives, policies, practices and programs for the businesses we are in and to align with the strategic mission of our Company. We are designing our compensation programs and practices to drive financial performance, incentivize execution on our business strategy and change our culture. Our new programs and practices reward superior performance on an individual, business segment and overall Company level and provide long-term incentives to employees in roles critical to our future.

Our objective is to provide a total compensation package that is competitive and that allows for significant upside when superior performance is achieved and less than target when performance is below expectations. While more remains to be done, significant efforts have been made in the short time since Separation to align our programs to our principles.

Each pay component plays a different and important purpose in an employee’s overall compensation and each component is influenced by different elements of our talent assessment.

Our rewards programs and levels generally target median market practices of our comparator group for the industries and locations in which we operate through designs that link Company, business segment, and individual performance. Our Compensation Committee and Dr. Jha have discretion to set individuals’ total compensation above or below the median market levels for strategic positions when the value of the role and the individual’s experience, performance and specific skill set justifies variation.

We have set the following guiding principles for the development and implementation of our new rewards programs and have taken specific actions in 2011 to align to these principles:

1. Be Market Competitive

Our compensation programs (base salary, annual and long-term incentives) and benefits target the median of our comparator group discussed later, but may provide long-term incentive opportunities that are above the median for a select group of key strategic talent. The mix of compensation and benefits seeks to be competitive within the high technology market, and achieve market competitiveness for individual programs as appropriate given their cost and complexity.

2. Pay for Performance

Our compensation programs are strongly linked to performance by:

Additionally, the “at-risk” compensation programs (both short and long-term) provide for significant upside for superior performance and downside for underperformance without encouraging unnecessary and excessive risk taking that could jeopardize the Company. When performance goals are not met, we are committed to reducing or eliminating short-term incentive bonuses and we are implementing a new annual incentive plan that will permit us the flexibility to do so on an individual, business segment or overall Company level.

3. Align Equity Awards to Business Strategy

We seek to effectively use equity awards as a tool to differentiate, reward and retain strategic talent who are expected to have the greatest impact on the Company’s future results. This concentrates our equity awards on strategic talent with the largest grant being awarded to critical talent. With such efforts, we seek to maintain market competitiveness by high technology industry standards.

4. Limit Perquisites and Gross Ups

As a new public company we strive to limit executives’ perquisites to those which are market competitive or considered necessary to help ensure our executives perform better and with fewer distractions. Further, as discussed below, we have already taken several measures to eliminate tax gross ups in a change in control.

Our New Rewards Programs and Practices After Separation and Specific Improvements

Our Chairman and CEO’s Compensation

Unique circumstances demanded the Former Parent attract a top quality leader for our Mobile Devices business, particularly to accomplish the Separation into two independent, publicly traded companies. The Former Parent Compensation Committee determined it was necessary to have Dr. Jha’s employment agreement reflect a competitive and compelling compensation package involving a significant amount of “at-risk” equity. Attracting Dr. Jha to Motorola required both guaranteeing certain elements of compensation and also providing inducements to accept the additional risk of leading a turnaround and Dr. Jha was one of very few industry leaders qualified to meet this challenge. Nevertheless, as we are now a new public company, the Chairman and CEO and our Compensation Committee made

significant changes to these arrangements and certain provisions are no longer applicable, as described below:

Our Program Re-Design

Motorola Mobility has established its own compensation programs and practices for 2011. In addition to efforts related to our Chairman and CEO above, we have made several changes to align our programs to current best practices and in ways intended to enhance the effectiveness of our rewards programs.

2010 Business Highlights

2010 was a transformational year for our Company. In February 2010, the Former Parent announced a revised strategy and timeline for the

Separation, which included splitting the formerly combined Home and Networks business segment between Motorola Mobility (comprised of the Mobile Devices and Home businesses) and Motorola Solutions (comprised of the remaining businesses) and completing the Separation by the first quarter of 2011, which was successfully accomplished on January 4, 2011.

The Company’s financial performance significantly improved in 2010 as did the Former Parent’s, which is especially noteworthy considering the challenging economic environment we faced while at the same time managing the complexities associated with executing the Separation. The significantly improved financial performance of both the Company and the Former Parent correlated to increased payouts under the annual incentive plan, the Motorola Incentive Plan (“MIP”), and the continued recovery of the Former Parent’s stock price correlated to payouts under two of the three LRIP cycles. In the case of the Mobile Devices business which did not receive bonuses for 2008 and received very small bonuses for 2009, the improved performance resulted in correspondingly larger bonuses under MIP. The sections “Short-Term Incentives” and “Long-Term Incentives” provide details regarding how the improved business and stock performance correlated to payouts under both the MIP and LRIP programs.

FORMER PARENT

Remainder of this Compensation Discussion and Analysis

The historical compensation strategy, including for compensation shown in the Summary Compensation Table for 2008, 2009 and 2010, was implemented by the Former Parent’s senior management and the Former Parent Compensation Committee. The remainder of this Compensation Discussion and Analysis covers the 2010 executive compensation provided in the tables that follow, with additional 2011 disclosure as noted, for the most highly compensated Motorola Mobility NEOs.

2010 Former Parent Compensation

Executive compensation arrangements with and compensation decisions regarding NEOs prior to our Separation were decided by the Former Parent Compensation Committee with the exception of the individual performance factors for 2010 under the Motorola Incentive Plan which were determined by our Compensation Committee with the concurrence of our Board of Directors in the case of Dr. Jha.

Our Chairman and CEO, CFO and NEOs held the following positions at the Former Parent during 2010 and currently at Motorola Mobility, as indicated:

Following the Separation, all listed executives are employed by the Company and are no longer employees of the Former Parent.

Former Parent 2010 Compensation Actions

The revised timing of the Separation, which was initially anticipated to be completed in 2009, had a significant influence on pay decisions for Dr. Jha. Dr. Jha’s employment agreement permitted him to terminate employment for Good Reason and collect severance, in addition to receiving a significant contingent cash payment, if the Separation was not completed by October 31, 2010. To address the revised timing of the Separation (and mitigate risks in the event of further Separation delays) and to incent Dr. Jha to execute the Separation based on the new timeline of the first quarter of 2011, Dr. Jha’s agreement was amended to extend the date on which he had the right to terminate for Good Reason to June 30, 2011. The Separation related equity award formulas in Dr. Jha’s employment agreement were also modified as discussed in the “Employment Contracts” section.

Roles in Determining 2010 Compensation

The following provides an overview of the roles and responsibilities of the various parties involved in determining 2010 compensation:

Former Parent Compensation Committee

Former Parent Board of Directors

Our Compensation Committee

Co-CEOs

Senior Leadership Team

Human Resources

Independent Consultant to the Former Parent Compensation Committee

Dr. Jha was not involved in the preparation of or recommendations related to his compensation and did not participate in the discussions regarding his compensation at the Former Parent Compensation Committee or Board meetings. The Former Parent Compensation Committee could not unilaterally approve compensation or compensation changes for Dr. Jha without concurrence of the Former Parent’s Board.

Former Parent Compensation Mix

When making 2010 compensation decisions, the Former Parent Compensation Committee considered the total direct compensation levels for each executive position against the median of similar positions in the Former Parent’s comparator group of large-cap, high-tech companies. The Former Parent intended to provide competitive total compensation, as well as competitive compensation for each element comprising

total compensation. As a result, the Former Parent did not specifically limit one element of compensation in response to the amounts potentially realizable under other compensation elements. However, certain limits were placed on benefits available under life and disability plans and investment plans, including the Former Parent’s pension plans, while ensuring competitiveness in the marketplace. The Former Parent’s “qualified” plans are also subject to IRS limits. Although the Former Parent structured the executive compensation program to be targeted at the median of the comparator group, the exact percentile may differ by individual and is based on their specific performance, experience, skill set, position and ability to impact business results.

In keeping with the guiding principles of being “business driven” and “performance differentiated”, the Former Parent also structured the executive compensation program so that generally greater than 80% of Former Parent’s NEO’s targeted total compensation was delivered in the form of performance-based incentives; however, not all Motorola Mobility NEOs were the Former Parent’s NEOs and therefore may vary from this structure.

The following table highlights the specific 2010 target pay mix of each Motorola Mobility NEO:

Former Parent 2010 Comparator Group

The Former Parent Compensation Committee reviewed the composition of the comparator group at

least annually to determine the appropriateness and applicability of the group for establishing its compensation programs and making individual pay decisions for NEOs. As a result of the Company’s transformation preceding the Separation, our comparator group changed.

In early 2010, the Former Parent used a comparator group relevant for a company of the Former Parent’s size and multi-industry focus. This peer comparator group consisted of the following large-cap, high-tech companies that, in the aggregate, the Former Parent Compensation Committee believed best represented the Former Parent’s portfolio of businesses and competition for executive talent at the time.

2010 Transitional Comparator Group

Due to the unique circumstances of the Separation, the Former Parent’s Compensation Committee deemed it appropriate to establish separate comparator groups for Motorola Mobility in the latter part of 2010 in order to benchmark companies of similar size and industry focus in planning for post-Separation compensation decisions.

The comparator group for Motorola Mobility was developed with input from the independent compensation consultant, Compensia, and includes:

Our Compensation Committee will regularly review the appropriateness of the comparator group.

To supplement comparator group data and obtain a more complete picture of the overall compensation environment for the broader executive group and, from time to time, the NEOs, the Former Parent looked to multiple survey sources. During 2010, the Former Parent utilized supplemental data for some of the NEOs from the following survey sources:

Because these surveys contain competitive compensation market data on a number of companies spanning different industries, market analysis involves narrowing the available information to “data cuts” that most accurately reflect size, industry and competitive labor market.

The “data cuts” for the supplemental data used by the Former Parent for some of the Named Executive Officers during 2010 were:

Former Parent’s Independent Consultant Engagement

The Former Parent Compensation Committee engaged an independent consultant to advise them on the Former Parent’s compensation strategy and program design. The consultant conducted an in depth evaluation of the compensation program on a periodic basis (typically every one or two years), and annually reviewed the specific compensation of Co-CEOs and the senior leadership team, including certain of our NEOs.

During 2010, the Former Parent Compensation Committee chose to continue the engagement of Compensation Advisory Partners, LLC as its independent compensation consultant. Compensation Advisory Partners did not have any other business or consulting relationships with the Former Parent. The Former Parent Compensation Committee had occasional discussions with Compensation Advisory Partners without management present to ensure impartiality on certain decisions.

In 2010, the Former Parent Compensation Committee also engaged Deloitte to consult on the amendments to Dr. Jha’s employment agreement. Deloitte provided other services to the Former Parent, but did not provide any other compensation consulting services to the Former Parent Compensation Committee. Motorola Mobility management engaged Deloitte separately on compensation matters during 2010 to support the Company in preparation for the Separation and management (not our Compensation Committee) continues to engage Deloitte.

Prior to the Separation, the Former Parent Compensation Committee decided to engage another compensation consultant, Compensia as the compensation consultant to our Compensation Committee for Motorola Mobility compensation matters. Compensia does not have any other direct or indirect business relationships with either the Former Parent or Motorola Mobility. Our Compensation Committee has only engaged Compensia as its independent consultant and does not use Deloitte.

The fees during 2010 for the Former Parent Compensation Committees’ consultants are shown in the table below:

2010 Named Executive Officer Compensation

Base Salary

Base salary is a component of the compensation program designed to provide market competitive fixed compensation to attract and retain qualified talent. Base salary levels for each NEO were generally

targeted at the median of the comparator group, but the exact percentile may differ by individual. The Former Parent Compensation Committee had the discretion to deviate from the targeted median when an NEO’s performance, experience and specific skill set warranted such a variation. In response to the economic downturn’s impact on the business, annual salary increases were not provided to most employees, including NEOs, in 2010. In addition, Dr. Jha took a 25% voluntary reduction in his base salary during 2009 and 2010.

Short-Term Incentives

Short-term incentives are a component of the compensation program designed to reward executives based on achievement against the established short-term performance goals and individual performance goals that support the broader business strategy. The MIP is an annual cash incentive plan that applied in 2010 to all employees (excluding those employees participating in a sales or other incentive plan), including NEOs.

The objectives of MIP were to:

MIP Incentive Formula

MIP awards were a function of an individual’s target incentive opportunity, annual business performance and individual performance. The payout value of a MIP award to each individual is based on the following formula:

Individual Eligible Earnings

Individual Eligible Earnings equals the NEO’s base salary earnings during the incentive plan year.

MIP Individual Incentive Target

Individual Incentive Targets are based on market- competitive data and are established as a percentage of

eligible earnings. At the beginning of each year, the Former Parent Compensation Committee designated individual target levels for each NEO. For 2010, Individual Incentive Targets for NEOs were generally targeted at the median of the Former Parent’s comparator group.

The 2010 MIP Individual Incentive Targets for our NEOs were as follows:

In 2010, business segment and corporate goals were established based on Operating Earnings (“OE”) and Controllable Free Cash Flow (“CFCF”), which were key determinants in driving the short-term success in the businesses and what the Former Parent believed impacted stockholder value creation in the longer term.

OE carried a 65% weight in determining the Business Performance Factors. OE for incentive plan purposes was defined according to GAAP, excluding the effect of the following items: (1) reorganization, asset impairment, extraordinary, unusual and/or non-recurring items of gain or loss, separately identified in the Former Parent’s quarterly earnings press releases; (2) changes in tax or accounting regulations or laws; (3) the effect of discontinued operations; (4) the effect of a significant merger or acquisition and (5) expenses related to share-based compensation, intangible amortization, and unallocated incentive and function costs.

CFCF carried a 35% weight in determining the Business Performance Factors. CFCF for incentive plan purposes was defined as operating cash flow according to GAAP, excluding cash flow related to: (1) income taxes; (2) non-operating income or expense; and (3) unallocated incentive and function costs, less capital expenditures. (A capital expenditure is defined as the original cost of acquiring property, plant and equipment, as reported in the investing section of the cash flow statement per GAAP).

At the end of each plan year, the Former Parent Compensation Committee reviewed full year performance and the corresponding management recommendations regarding each Business Performance Factor (“BPF”). The Former Parent Compensation Committee exercised its discretion and approved certain adjustments to the final BPFs for the 2010 MIP. The results from the discontinued operations of the Networks business and the MIRS Communications

business, including the impact of divesting the MIRS business, were included for determination of our 2010 MIP BPFs. The Former Parent Compensation Committee believed this was an appropriate

adjustment since the Networks business was part of the Former Parent for all of 2010, and the 2010 BPF performance targets factored in the performance of both of these businesses.