SCHEDULE 14A
SCHEDULE 14 INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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Name of Registrant as Specified in Its Charter:
US West, Inc.
Name of Person(s) Filing Proxy Statement:
United Food & Commercial Workers Union, Local 99R
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<PAGE>
Preliminary Proxy Statement
of the Teamsters General Fund re:
Union Pacific
Annual Meeting
April 19, 1996
Little America Hotel
Salt Lake City, Utah
8:30 a.m.
Date sent to shareholders:
March 18, 1996
To the Shareholders:
Company Chairman Drew Lewis has stated:
"Your management and Board of Directors ... addressed the
increasingly significant subject of corporate governance to
ensure that your Company is responsive to shareholder
interests and maintains its position as one of the best
managed companies in the business. The discussion of our
corporate governance practices in the Corporate Governance
Standards sections of the Proxy Statement will be of special
interest to all shareholders. We would also like to focus
your attention on our proposals to eliminate cumulative
voting in the election of directors and to declassify the
Board, which will result in annual election of all
directors."
At the annual meeting, shareholders are asked to:
1. Elect six directors, each to serve for a term of three years;
2. To amend the Revised Articles of Incorporation to eliminate
cumulative voting;
3. To amend the Revised Articles of Incorporation to declassify
the Board of Directors;
4. To ratify the appointment of Deloitte & Touche LLP as the
independent certified public accountants of the company;
5. To recommend the Board of Directors provide that an
independent director serve as the chair of the board; and
6. To transact such other business as may properly come before
the Annual meeting or any adjournment or postponement thereof.
Items 1-4 were proposed by and supported by management, and
Item 5 by shareholder Teamsters General Fund. Management has
stated that Proposals 2 and 3 are each conditioned upon
shareholder approval of the other: if one fails, management does
not plan to implement the other even if it receives majority
support.
MANAGEMENT COMPENSATION
In a February, 1996 report, compensation expert Graef
Crystal identified Chairman and CEO Lewis as one of 11 "black
hats," a designation that identifies executives with high pay and
low performance. Crystal compared corporate returns to
executive compensation for 896 companies with CEO's who had been
at the company for all three years form 1992-1994. While the
average CEO of a similar sized company earned $3,387,000 in
salary and bonuses. Lewis earned $7,661,000. Lewis's total cash
compensation exceeded the competitive rate by 126%.
Meanwhile, Crystal found that Union Pacific's performance
trailed that of its peers. In 1994, Business Week noted that
$100 invested in Union Pacific in 1992 would be worth only $97
two years later. Investments in any of the other five major
railroads would have fared better. During this same time period,
Crystal notes that UPC ranked in the 31st percentile. This means
that 69% of companies performed better than UPC.
Chairman Lewis is slated to retire. His comments on
departing senior executives:
"You have a certain lifestyle as a CEO ... You belong to
clubs, you entertain, you have the big house, the lawn
service, the pool service; you do things differently. The
least a chief executive who gets fired should expect is two
or three years to get his feet on the ground. You take a
guy who is making $250,000 to $400,000 a year, and he's been
living on that for ten years; he's got one heck of a problem
when he tries to live on $100,000. You've got to give him
some kind of transition out of it."<F1>
<F1>
Stolley, Richard B.; Baig, Edward C. "How to fire the CEO."
Fortune, August 31, 1987, v116,p38.
<PAGE>
We incorporate herein the discussion of the subject of management
compensation in the Company's proxy statement.
HAVING A BOARD CHAIR FROM OUTSIDE MANAGEMENT
The ability of a board of directors to scrutinize
management's conduct is enhanced by its chairperson not being the
company CEO, according to many familiar with corporate
governance. The chair typically sets the agenda and can encourage
discussion (or cut it off). A chair from outside management will,
in our view, be better able to ensure that management decisions
and compensation are thoroughly reviewed.
BOX: On the issue of board room debate, a 1993 Forbes article
reports: "Lewis recently agonized over whether to ask a director
who he describes as 'disruptive and overly negative' to leave his
board. When Lewis finally made his move, the director balked,
insisting his removal be voted on by the entire board -- which
backed Lewis up."
The prospect of a Chairman/CEO having medical problems or
other personal problems further sharpens the need in our view to
avoid unnecessary concentration of authority in a single person.
ELECTION OF DIRECTORS AND APPOINTMENT OF AUDITORS
At the 1996 annual stockholders meeting, shareholders will
be asked to vote in the election for board of directors:
* Of the six directors to be elected this fall, three are from
Union Pacific management.
* Two of the six directors who face election and who are not
company employees have other ties to Union Pacific:
(1) Richard B. Cheney is CEO of Halliburton Co, which
provided $23.6 million worth of drilling and production services
to Union Pacific Resources.
(2) E. Virgil Conway is the brother of William B. Conway,
who is president and owner of a substantial interest in Modjeski
& Masters, Inc., which entered into a consulting agreement with
railroad subsidiaries of Union Pacific.
* Of directors continuing in unexpired terms, Richard K. Davidson
serves as the Union Pacific president and chief operating
officer.
* Of directors continuing in unexpired terms who are not
employees, three have other relations to the company.
(1) Judith Richards Hope is a senior partner at a law firm
that provided legal services to the company in 1995.
(2) Richard Mahoney was an officer of Monsanto until April
1995 and is a director of Monsanto, which purchased approximately
$31 million in transportation services from Union Pacific in
1995.
(3) Elbridge T. Gerry is a partner of Brown Brothers
Harriman & Co., which managed certain pension funds of the
company in 1995 and was paid approximately $110,000 for these
services.
We incorporate herein the discussion in management's proxy
statement concerning election of directors and appointment of
auditors.
ELIMINATING CUMULATIVE VOTING
We urge a vote AGAINST the resolution to eliminate
cumulative voting. For many years, shareholders have enjoyed the
option of targetting their votes for individual board candidates.
Union Pacific says it will not declassify its board if
cumulative voting is retained. We do not believe shareholders
should be asked to sacrifice existing protections in order to
obtain another improvement. This is especially true in a state
such as Utah where once a shareholder's right to cumulative
voting is given up, shareholders cannot initiate its re-adoption.
Corporate governance reform should not be matter of having to
take a step back in order to take a step forward. Management
should heed the wishes of the majority of shareholders on each
corporate governance issue independently.
Management contends cumulative voting allows for "special
interest" directors but anyone elected as director has serious
legal duties to serve all shareholders. That a director has more
active support from one sector of shareholders does not mean this
director is less qualified to serve shareholders as a whole.
We believe cumulative voting is one of the few realistic
options for shareholders who wish to be able, if necessary, to
elect a director not backed by management. The cost of an
independent proxy solicitation seeking a majority of shares would
run in the hundreds of thousands of dollars, too expensive for
most shareholders. The costs of electing a director via
cumulative voting are significantly lower. In our view, a
director elected without the help of management is a director
better suited to preventing a management compensation excesses or
management business mistakes.
DECLASSIFYING THE BOARD OF DIRECTORS:
We join management in supporting this proposal. We
incorporate by reference management's discussion of the merits of
this proposal.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
We incorporate by reference the discussion of security
ownership contained in the Company's 1996 proxy statement.
PROPOSALS FOR FUTURE MEETINGS
Stockholders have certain rights under SEC Rule 14a-8 to
have proposals included in the Company's proxy statement.
Stockholders who wish to have their proposals included in the
Company's proxy statement must deliver their proposals in writing
to the Company at Martin Tower, Eighth & Eaton Ave, Bethlehem,
PA, 18018, by November 1, 1996. Please contact us if you wish
further information about shareholder proposals.
VOTING RIGHTS AND USE OF THE PROXY CARD
You can vote on all proposals by using the proxy card that
is enclosed. We will keep all cards received confidential from
the Company until the deadline for their submission, absent a
court order requiring disclosure.
If you sign and return the enclosed card but do not
instruct us to vote, the card will be voted FOR the proposals to
declassify the board, separate the offices of chair and CEO, and
reappoint auditors; AGAINST election of the Board's nominees; and
AGAINST the proposal to eliminate cumulative voting.
THE ENCLOSED PROXY DOES NOT GRANT THE PROXYHOLDERS ANY
DISCRETIONARY AUTHORITY. Should any business other than the above
come before the meeting (which we do not anticipate), the
proxyholders will not vote your shares on such matters.
Only shareholders as of February 9, 1996 are entitled to
vote. We incorporate by reference the additional information
about voting requirements and outstanding shares contained in the
Company's proxy statement.
REVOCATION RIGHTS
If you have already voted the proxy card you received from
the company, you can change your vote. The Company's proxy card
and our card are both revocable at any time prior to being voted
by (1) executing a new proxy card; or (2) attending and voting at
the meeting; or (3) delivering written notice of revocation to
the Company or to the authorized agents of the employee benefit
plan through which your stock is held. Only your latest-dated
proxy card will be counted.
SOLICITATION OF PROXIES and CERTAIN OWNERSHIP INFORMATION
The Teamsters General Fund is part of the International
Brotherhood of Teamsters ("IBT") and owns 25 shares of Union
Pacific stock. IBT-affiliated pension funds own more Union
Pacific stock, though a precise number is not known at this time,
nor should investors consider these affiliated funds to be
supporters of this solicitation. We expect to bear all the costs
of this solicitation, which we estimate will be $2000. We expect
to solicit proxies by mail, telephone, telecopier and personal
interviews. We will ask trustees, brokers, custodians and other
nominees to forward solicitation materials to the beneficial
owners of common stock, and they will be reimbursed for their
reasonable out-of-pocket expenses. We expect proxies will be
solicited solely by IBT employees, who do not receive any
additional compensation for such solicitations. The persons
designated as proxies on the enclosed cards are on IBT staff.
IBT represents certain employees of two divisions of Union
Pacific, U.P. Motorfreight and Overnite. IBT has assisted its
members in pursuing litigation against Union Pacific over labor
issues.
* * *
SIGN, DATE AND RETURN THE ENCLOSED BLUE CARD TO:
Teamsters General Fund
25 Louisiana Avenue
Washington, DC 20001
Fax 202-624-6833
Telephone: 202-624-8100
<PAGE>
PROXY
SOLICITED BY TEAMSTERS GENERAL FUND
ANNUAL MEETING of UNION PACIFIC CORPORATION
April 19, 1996
SALT LAKE CITY, UTAH
The undersigned hereby appoints BARTLETT NAYLOR and, WILLIAM
PATTERSON as Proxies, each with the power to appoint a
substitute, and hereby authorizes them to represent and to vote
as set forth below all shares of stock of UNION PACIFIC
CORPORATION which the undersigned is entitled to vote at the
April 19, 1996 Annual Meeting of Shareholders or any adjournment
or postponement thereof. The undersigned acknowledges receipt of
a proxy statement from the proxyholders. The proxyholders will
not vote this proxy upon any matters other than those set forth
below which may come before the meeting. If no direction is made,
this Proxy will be voted against the election of Directors, for
proposals 3, 4 and 5, and against proposal 2.
Proxy voting instructions: X Please mark your votes as in this
example.
Approval of each of proposals 2 and 3 has been conditioned upon
approval of the other proposal.
1. Election of Directors -- For Withheld For all except
____ ____ ____
___________________________________
(Except nominee(s) written above.)
Nominees: R.B. Cheney, E.V. Conway, Drew Lewis, L.W.
Matthews, III, J.L. Messman, T.A. Reynolds, Jr.
To distribute your votes on a cumulative basis, write below
the name(s) of the nominee(s) you wish to vote for and the
number of votes you wish to cast for each.
_________________________________________________
WE RECOMMEND A VOTE "AGAINST" THE FOLLOWING ITEM:
2. Approval of amending the Revised For Against Abstain
Articles of Incorporation to eliminate ___ _____ _____
cumulative voting.
WE RECOMMEND A VOTE "FOR" THE FOLLOWING ITEMS
3. Approval of amending the Revised For Against Abstain
Articles of Incorporation to ___ _____ _____
declassify the Board.
4. Ratify appointment of Deloitte For Against Abstain
& Touche as independent auditors. ___ _____ _____
5. Approval of resolution urging For Against Abstain
board to provide for an independent ___ _____ _____
chairman
Dated:__________________, 1996
Signature(s)_______________________
___________________________________
Please sign exactly as your name appears on Union Pacific's
records. Joint owners should each sign personally. Where
applicable, indicate your official title or representation
capacity.
Address ___________________________________________
Tel. ________________
If you own through a broker or other nominee, please list record
owner's name and address:
