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Filed pursuant to Rule 424(b)(3)
Registration No. 33-61661
PROSPECTUS
GTE CORPORATION (LOGO)
SHAREHOLDER SYSTEMATIC INVESTMENT PLAN
This Offering Statement is effective October 1, 1995 and replaces the
summary of the provisions of the GTE Shareholder Systematic Investment Plan (as
such plan was in effect immediately prior thereto, the "Prior Plan") contained
in the Prospectus dated December 29, 1993 and any supplements thereto. Effective
October 1, 1995, the provisions of the Prior Plan will conform substantially to
the descriptions set forth in this Prospectus.
The GTE Corporation Shareholder Systematic Investment Plan (the "Plan")
provides record owners of shares of GTE Corporation ("GTE") Common, Preferred
and No Par Preferred Stock with a convenient and systematic method of purchasing
additional GTE Common Stock. Any owner of record of GTE Common, Preferred or No
Par Preferred Stock is eligible to join the Plan.
Participants in the Plan may elect one of the following investment options:
-- automatically reinvest cash dividends on all or part of their Common,
Preferred or No Par Preferred Stock in shares of GTE Common Stock, or
-- reinvest their dividends and also make optional payments of not less
than $25 per payment or more than $100,000 per year by check, money
order, or electronic funds transfer, at any time, or
-- make optional payments only.
Participants may also select from a number of features, including:
-- selling any number of Plan shares at any time, or
-- sending their shares of GTE Common Stock to The First National Bank
of Boston (the "Administrator") for safekeeping, which will hold
their shares in book entry form, or
-- making optional payments by electronic transfer of funds.
The purchase price per share will be determined based on the market price
per share of GTE Common Stock in the manner described herein, including
brokerage commissions (if any). Participants will be charged a quarterly fee
equal to the lesser of $1 or 5% of the quarterly dividend and cash investment
amount.
This Prospectus relates to shares of GTE Common Stock registered for
issuance under the Plan. These shares, at the option of GTE, may be newly issued
shares, treasury shares, shares purchased on the open market by the
Administrator, or any combination of the foregoing.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is August 15, 1995.
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STATEMENT OF AVAILABLE INFORMATION
GTE is subject to the informational requirements of the Securities Exchange
Act of 1934 and, in accordance therewith, files reports, proxy statements and
other information with the Securities and Exchange Commission ("SEC"). These
reports and other information can be inspected and copied at the public
reference facilities of the SEC at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, as well as the following Regional Offices: Seven World
Trade Center, New York, New York, 10048 and 500 West Madison Street, Chicago,
Illinois 60661. Copies of such materials can be obtained from the SEC at its
prescribed rates and can also be inspected at the New York, Chicago and Pacific
Stock Exchanges on which securities of GTE are listed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
GTE's Annual Report on Form 10-K for the year ended December 31, 1994, its
notice of 1995 Annual Meeting and Proxy Statement dated March 3, 1995 issued in
connection with the Annual Meeting of Shareholders held on April 19, 1995, its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995 and June
30, 1995, and its Current Report on Form 8-K dated February 17, 1995, all as
filed with the SEC, are incorporated herein by reference. All documents filed by
GTE pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended, after the date of this Prospectus and prior to the
termination of the offering hereunder shall be deemed to be incorporated by
reference in this Prospectus and to be part hereof from the date of filing such
documents.
GTE hereby undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, on the written or oral request of
any such person, including any beneficial owner, a copy of any or all of the
documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into the information that
the Prospectus incorporates. Requests for such copies should be directed to R.
J. Tuccillo, the Assistant Secretary of GTE, at One Stamford Forum, Stamford,
Connecticut 06904, telephone number (203) 965-2000.
THE CORPORATION
GTE, the issuer of the shares covered by this Prospectus, was incorporated
under the laws of New York on February 25, 1935 and has its principal executive
offices at One Stamford Forum, Stamford, Connecticut 06904, telephone number
(203) 965-2000.
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THE PLAN IS ADMINISTERED FOR GTE BY
THE FIRST NATIONAL BANK OF BOSTON.
REQUESTS FOR FORMS, SUBMISSION OF NOTICES
AND REQUESTS FOR INFORMATION WITH
RESPECT TO THE PLAN SHOULD BE DIRECTED TO:
THE FIRST NATIONAL BANK OF BOSTON
P.O. BOX 9092
BOSTON, MASSACHUSETTS 02205-9092
OR YOU MAY CALL TOLL FREE (800) 225-5160
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DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of GTE consists of (i) 2,000,000,000 shares of
Common Stock, par value $.05 per share, including the associated Rights, (ii)
9,313,871 shares of Preferred Stock, par value $50 per share, issuable in series
and (iii) 11,858,069 shares of No Par Preferred Stock, issuable in series.
The following summaries of the terms of the Common Stock, Rights, Preferred
Stock and No Par Preferred Stock do not purport to be complete and are qualified
in their entirety by reference to the terms set forth in the Certificate of
Incorporation of GTE incorporated herein by reference. GTE's outstanding capital
stock is fully paid and nonassessable and none of the authorized capital stock
is entitled to preemptive rights or subscription rights, other than pursuant to
the Rights.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share and are not
entitled to cumulative voting rights in the election of directors. No dividends
on the Common Stock may be declared or paid unless dividends on all other
capital stock ranking senior to the Common Stock have been paid or declared and
set apart for payment. Except for payments out of earned surplus and except for
dividends payable in Common Stock, dividends or other distributions on Common
Stock are limited to an aggregate of $2 million. Such distributions (whether or
not out of earned surplus) are also prohibited if the amount of surplus (of
every character) available for dividends would thereby be reduced to less than
three years' dividend requirements on the Preferred Stock and the No Par
Preferred Stock. Subject to the foregoing limitations, the GTE Board of
Directors (the "GTE Board") may determine the dividends to be paid on Common
Stock out of funds available therefor. Upon liquidation of GTE, after creditors
and the superior rights of the preferred stock have been satisfied, the holders
of the Common Stock are entitled to receive pro rata the balance of GTE's
assets, if any.
The transfer agent and registrar for the Common Stock is The First National
Bank of Boston, Boston, Massachusetts.
RIGHTS
On December 7, 1989, the GTE Board authorized and declared a dividend of
one Right for each share of Common Stock outstanding on December 28, 1989 or
issued thereafter. The terms of the Rights are governed by, and more fully
described in, the Rights Agreement, dated December 7, 1989(the "Rights
Agreement"). The First National Bank of Boston currently serves as Rights Agent
under the Rights Agreement. Each Right entitles the holder, upon the occurrence
of certain events, to purchase from GTE one one-thousandth of a share of Series
A Participating No Par Preferred Stock (the "Participating Preferred Stock"), at
$200, subject to adjustment in accordance with the Rights Agreement. As a result
of the two-for-one stock split effected on May 23, 1990, each share of Common
Stock is entitled to one-half of a Right.
The Rights are exercisable to purchase Participating Preferred Stock, and
separate rights certificates will be issued therefor, only upon the earliest to
occur of:
(i) the acquisition by a person or group of 10% or more of the voting
power of GTE without the consent of GTE (an "Interested Person") and the
execution by such Interested Person of an agreement relating to certain
business combinations specified in the Rights Agreement,
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(ii) the acquisition by a person or group of 20% (or a lesser
percentage, not less than 10%, as may be legally permitted) or more of the
voting power of GTE (for purposes of this discussion an "Acquiring
Person"), or
(iii) 10 days following the commencement of a tender offer or exchange
offer that would result in a person or group becoming an Acquiring Person
(the earliest of such dates being, for the purposes of this discussion, the
"Distribution Date").
In the event that any person becomes an Acquiring Person (unless pursuant
to a tender offer or exchange offer by any person other than an Interested
Person for all outstanding shares of Common Stock at a price and on terms
determined by at least a majority of the members of the GTE Board to be both
adequate and otherwise in the best long-term and short-term interests of GTE,
its shareholders and its other constituencies (a "Permitted Offer")), each
holder of a Right (other than an Acquiring Person) will for a 60-day period
thereafter have the right to receive upon exercise thereof that number of one
one-thousandths of a share of Participating Preferred Stock that is equal to the
number of shares of Common Stock having a market value of two times the exercise
price of the Right (such being the "Flip-In Right"). In the event that,
following a person or group becoming an Interested Person, GTE is involved in
certain business combinations specified in the Rights Agreement, each holder of
a Right shall thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of Common
Stock of the acquiring company which at the time of such transaction would have
a market value of two times the exercise price of the Right (such right being
the "Flip-Over Right"). If an event that would otherwise give rise to the
Flip-In Right also gives rise to the Flip-Over Right, only the Flip-Over Right
shall be triggered. The holder of a Right will continue to have the Flip-Over
Right whether or not such holder exercises the Flip-In Right. Upon the
occurrence of any of the events giving rise to the exercisability of the Flip-In
Right, any Rights that are or were at any time owned by an Acquiring Person
engaged in any of such transactions or receiving the benefits thereof on or
after the time the Acquiring Person became such shall become void insofar as
they relate to the Flip-In Right.
At any time prior to the earlier to occur of (i) a person becoming an
Interested Person, or (ii) the expiration of the Rights, the GTE Board may act
to redeem the Rights in whole, but not in part, at a price of $.01 per Right
(the "Redemption Price"). Additionally, GTE may redeem the Rights in whole, but
not in part, at the Redemption Price if such redemption is incidental to certain
business combination transactions specified in the Rights Agreement or following
an event giving rise to, and the expiration of the exercise period for, the
Flip-In Right if no person then beneficially owns securities representing 10% or
more of the voting power of GTE.
The Rights will expire on the earliest of (i) December 7, 1999, (ii) the
date of consummation of a merger transaction with a person or group (other than
an Interested Person) who acquired GTE Common Stock pursuant to a Permitted
Offer, or (iii) the date of redemption by GTE as described above. Rights will be
non-redeemable and junior to any other series of preferred stock that GTE may
have issued (unless otherwise provided in the terms of such stock). Each share
of Participating Preferred Stock will have preferential quarterly dividends,
liquidation payments and rights to consideration in the event of a merger,
consolidation or other transaction involving the exchange of Common Stock and
will vote in the same class as holders of Common Stock, with each share of
Participating Preferred Stock having two votes. The Participating Preferred
Stock is protected against dilution in the event that additional shares of
Common Stock are issued pursuant to a stock split or a stock dividend.
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The Rights have certain anti-takeover effects. The Rights are designed to
cause substantial dilution to a person or group that attempts to acquire GTE on
terms not approved by the GTE Board.
PREFERRED STOCK AND NO PAR PREFERRED STOCK
Holders of the Preferred Stock and No Par Preferred Stock (which does not
include the Participating Preferred Stock described above) are entitled to one
vote per share, vote together as a class with holders of Common Stock and have
noncumulative voting rights. Whenever dividends on either the Preferred Stock or
the No Par Preferred Stock are in arrears in an amount equal to four
quarter-yearly dividends on all shares of all series then outstanding, and until
all such dividends in arrears have been paid, the holders of such preferred
stock may elect two additional members of the GTE Board, and the holders of the
Common Stock will elect the remaining Directors. The holders of the Preferred
Stock and the No Par Preferred Stock are entitled to cumulative cash dividends
at the rate fixed by each series, payable on January 1, April 1, July 1 and
October 1 of each year, before any distribution on the Common Stock. Upon
liquidation, holders of the Preferred Stock and No Par Preferred Stock have
priority over holders of the Common Stock.
USE OF PROCEEDS
The management of GTE cannot determine the number of shares which will be
purchased under the Plan or the prices at which such shares will be sold. The
proceeds from the sale of such shares will be added to the corporate funds of
GTE to be used for general purposes, including the reduction of short-term
indebtedness and for further investment in, or advances to, subsidiaries in
connection with the financing of their construction programs.
THE PLAN
The following is a summary of principal provisions of the Plan in question
and answer form. This summary does not purport to be complete or to modify the
Plan, and in case of any conflict the provisions of the Plan will govern.
PURPOSE AND ADVANTAGES OF THE PLAN
1. What is the purpose of the Plan?
The Plan provides shareholders of record of GTE Common, Preferred or No Par
Preferred Stock with a convenient and systematic method of investing their
quarterly cash dividends and/or optional payments towards the purchase of
additional shares of GTE Common Stock. Reinvested cash dividends and optional
payments will be used to purchase GTE Common Stock. At the discretion of GTE,
the shares purchased for the Plan will either be newly issued shares, treasury
shares, shares acquired in the open market by the Administrator or any
combination of the foregoing. To the extent that shares of GTE Common Stock are
purchased directly from GTE, GTE will use the funds received for general
corporate purposes.
2. What are the advantages of the Plan?
The Plan provides participants with a convenient and systematic method of
purchasing shares of GTE Common Stock. If shares are purchased directly from
GTE, participants do not pay a brokerage commission.
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If the Administrator purchases shares for the Plan in the open market
during an investment period, the Administrator will allocate brokerage
commissions among all participants who purchase shares during that investment
period. The Administrator aggregates the funds of all participants to purchase
shares in large volume. The brokerage savings resulting from such large
purchases are passed on to participants.
The Administrator computes the number of shares purchased and credited to a
participant's account to three decimal places. Dividends are paid on both full
and fractional shares in a participant's account. Those dividends will be used
to purchase additional shares of GTE Common Stock.
A participant may, at any time, direct the Administrator to sell any number
of shares held in his or her Plan account.
BECOMING A PARTICIPANT IN THE PLAN
3. Who is eligible to participate?
Anyone who is a record holder of at least one share of GTE Common,
Preferred or No Par Preferred Stock (an "Eligible Shareholder") may participate
in the Plan. Record holders of shares of preferred stock issued by GTE's
subsidiaries may not enroll those shares in the Plan.
4. How does an Eligible Shareholder become a participant?
An Eligible Shareholder may join the Plan by completing and signing the
accompanying Authorization Form and sending it to the Administrator in the
envelope provided for that purpose.
An Eligible Shareholder may elect to enroll some or all shares in the Plan,
or continue to receive cash dividends and only purchase additional shares by
making optional payments ("Optional Payments"). To select the Optional Payments
option, the Eligible Shareholder should check "Optional Payments Only" on the
Authorization Form and sign and return the Form. No cash payment need be made at
the time of enrollment. Dividends on shares purchased through Optional Payments
will be reinvested.
5. When may an Eligible Shareholder join the Plan?
Eligible Shareholders may join the Plan at any time. In order for a
dividend payment to be reinvested, the Administrator must receive an
Authorization Form on or before the 10th day of the month preceding the date on
which a dividend is paid. For example, if a dividend has been declared and is
payable on January 1 and an Eligible Shareholder held shares outside of the Plan
on the dividend record date, he or she must return the Authorization Form to the
Administrator by December 10 to have the January 1 dividend reinvested.
6. What investment options can an Eligible Shareholder select under the Plan?
Full Dividend Reinvestment. The Authorization Form authorizes the
Administrator to apply all the cash dividends on an Eligible Shareholder's
shares towards the purchase of additional shares of GTE Common Stock. The
dividends on shares held in the Eligible Shareholder's Plan account are also
applied towards the purchase of additional shares of GTE Common Stock. If an
Eligible Shareholder enrolls in the Full Dividend Reinvestment feature of the
Plan, he or she may make Optional Payments without sending in a new
Authorization Form.
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Partial Dividend Reinvestment. An Eligible Shareholder may elect to
reinvest dividends on fewer than all shares held either in certificate form or
in the Plan. The Eligible Shareholder should complete the Authorization Form and
indicate the exact number of shares on which cash dividends are to be received.
If an Eligible Shareholder selects this option, he or she may make Optional
Payments without sending in a new Authorization Form.
Optional Payments Only. If the Eligible Shareholder checks the "Optional
Payments Only" box on the Authorization Form, GTE will continue to pay cash
dividends on the shares registered in the Eligible Shareholder's name and held
in certificate form. The Eligible Shareholder may send Optional Payments (from a
minimum of $25 per payment up to a maximum of $100,000 in any calendar year) to
the Administrator to purchase additional shares. The dividends on all shares
purchased with Optional Payments and credited to the Eligible Shareholder's Plan
account will be applied towards the purchase of additional shares of GTE Common
Stock under the Plan. If an Eligible Shareholder selects the Optional Payments
Only option and later decides to select either the Full Dividend Reinvestment
option or the Partial Dividend Reinvestment option of the Plan, he or she must
complete an additional Authorization Form.
7. If a participant does not enroll all of the shares he or she owns in the
Plan, may the dividends on shares that are not reinvested under the Plan be
deposited directly into the participant's bank account?
Yes. Through GTE's Dividend Direct Deposit Service, participants may elect
to have any cash dividends that are not being reinvested under the Plan paid by
electronic funds transfer to the participant's bank account. To receive
dividends by direct deposit, a participant must first complete and sign the
Dividend Direct Deposit Authorization Form and return the form to the
Administrator. Participants may request Dividend Direct Deposit Authorization
Forms from the Administrator. In order to be effective with respect to a
particular dividend, the Dividend Direct Deposit Authorization Form must be
received by the Administrator at least 60 days prior to the dividend payment
date.
EXPENSES
8. Do participants pay any expenses in connection with purchases under the
Plan?
Yes. Participants will be charged a quarterly fee equal to the lesser of
$1 or 5% of the quarterly dividend and cash investment amount.
If shares are purchased on the open market, brokerage commissions are paid
and allocated among participants. Participants do not pay a brokerage commission
if purchases are made directly from GTE under the Plan. If a participant elects
to sell shares while remaining enrolled in the Plan or in connection with
terminating participation, the participant will pay the applicable brokerage
commissions and transfer tax (if any).
HOW THE PLAN WORKS
9. How many shares of GTE Common Stock will be purchased?
The number of shares a participant purchases on each dividend date will be
determined by the amount of dividends on the participant's enrolled shares plus
any Optional Payments the participant makes. This amount will be divided by the
market price of a share of GTE Common Stock (calculated as described in Question
10) plus any applicable brokerage commissions. Each participant's Plan account
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will be credited with the number of shares, including fractional shares
(computed to three decimal places), determined by this calculation.
10. How will the purchase price of shares of Common Stock be determined?
Purchases from GTE. The price of shares purchased directly from GTE with
reinvested cash dividends or with Optional Payments will be the average of the
high and low prices of GTE Common Stock on the New York Stock Exchange, Inc.
("NYSE") Composite Transactions Listing on the day of purchase (or the trading
day immediately preceding the day of purchase, if the NYSE is closed on the day
of purchase). The day of purchase for such shares will be the first business day
of each month for which any Optional Payment has been received from the
participant in the prior month and, for reinvested cash dividends, the dividend
payment date.
Purchases in the Open Market. The price of shares purchased in the open
market under the Plan will be the average cost of the shares plus brokerage
commissions incurred in connection with the purchase of the shares during the
investment period. The price will be determined by dividing the cost of all
shares purchased with Optional Payments and reinvested cash dividends during the
investment period (including all brokerage commissions) by the total number of
shares purchased during such period. The Administrator will determine the
investment period in compliance with applicable Federal securities laws. In
months in which a dividend is payable, the Administrator will aggregate Optional
Payments with reinvested cash dividends to determine the total amount of funds
to be invested.
Combined Purchases. If within a single investment period, the
Administrator purchases shares both directly from GTE and in the open market,
the price of shares will be the weighted average of the price of all shares
purchased directly from GTE and the price of all shares purchased in the open
market during that investment period.
GTE has sole discretion to determine whether shares for the Plan will be
newly issued shares, treasury shares, shares purchased in the open market by the
Administrator or any combination of the foregoing.
11. How does a participant make an Optional Payment?
A participant may initially make an Optional Payment by enclosing a check
or money order payable to "GTE Corporation" with the Authorization Form. No cash
payments will be accepted. Thereafter, the participant may make Optional
Payments by sending a check or money order payable to GTE Corporation along with
the tear-off section of the Plan account statement. A participant does not have
to send the same amount of money each month, nor is there an obligation to make
an Optional Payment at any time. However, each Optional Payment must total at
least $25 and all Optional Payments in any calendar year cannot total more than
$100,000.
Participants may make Optional Payments by monthly electronic funds
transfer. A participant may instruct the Administrator to arrange for automatic
deductions once a month from the participant's designated account at a qualified
financial institution by requesting an Automatic Debit Authorization Form from
the Administrator. Automatic debits must be at least $25 per payment and cannot
exceed $100,000 in a calendar year. A participant's financial account will be
debited on the 25th day of each month (or if such date is not a business day,
the preceding business day).
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12. When will the Optional Payments be invested?
Although Optional Payments may be made at any time, the Administrator
purchases shares for participants only once a month. The Administrator will
deposit all eligible Optional Payments upon receipt. Any payment which is below
the minimum payment amount, above the annual limit, or postdated will be
returned to the participant. No interest is paid on funds in the Administrator's
custody.
Optional Payments will be invested on the first business day of each month.
If the first day of the month falls on a Saturday, Sunday or holiday, then the
investment date will be the immediately preceding business day. In order for an
Optional Payment to be invested on a given investment date, the Optional Payment
must be received no later than the second business day preceding such investment
date. If the Optional Payment is received after the second business day
preceding an investment date, the Optional Payment will be held until the
following month's investment. A participant may obtain the return of any
uninvested payment by notifying the Administrator in writing or by calling
(800)225-5160.
If a check is returned unpaid for any reason, the Administrator will treat
the request for investment of those funds as void and shall immediately remove
from the participant's account any whole or fractional shares credited to that
account based on those funds. The Administrator will sell those shares to
satisfy any uncollected amounts. If the net proceeds of the sale of such shares
are insufficient to satisfy any uncollected amounts, the Administrator will sell
additional shares from the participant's account to satisfy the uncollected
balance.
13. How will participants be advised of the status of their Plan account?
A participant will receive a statement of account after each purchase of
shares. If a participant does not make Optional Payments, statements will be
received quarterly.
14. May a participant transfer the ownership of shares held in a Plan account?
Yes. A participant may transfer the ownership of shares held in a Plan
account if he or she supplies the Administrator with all necessary documentation
and the participant has his or her signature medallion guaranteed. A participant
may obtain a medallion guarantee from a financial institution, such as a
commercial bank, a trust company, a national bank, a credit union or a brokerage
firm, that is participating in a medallion program (such as STAMP, SEMP or MSP).
15. Will certificates be issued to participants for shares credited to their
Plan account?
No. Shares credited to a participant's account either through reinvested
dividends or Optional Payments will be held in book entry form. Certificates
will not be issued unless a participant instructs the Administrator to issue a
certificate for a particular number of shares. If a participant withdraws all
shares and terminates participation in the Plan, a certificate will be issued
for the number of whole shares held in the participant's account. The
participant will receive a check representing the value of any fractional share.
16. May participants deposit certificates for shares of GTE Common Stock they
currently hold into their Plan account for safekeeping?
Yes. Shares purchased with either reinvested dividends or Optional
Payments will automatically be held in the participant's Plan account, unless
otherwise directed. In addition, a Plan participant may deposit any or all
shares of GTE Common Stock represented by share certificates held by the
participant into his or her Plan account for safekeeping. GTE recommends that
certificates be sent to the
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Administrator by registered or certified mail, since the participant bears the
risk of loss in transit. A participant does not have to sign certificates
delivered for safekeeping.
17. Will shares deposited for safekeeping be automatically enrolled in the Plan?
Yes. Dividends on certificates deposited to the participant's Plan account
will be reinvested unless the participant has otherwise made an election to
receive dividends on a specified number of shares in cash through the Partial
Dividend Reinvestment option.
18. May a participant pledge shares held in his or her Plan account?
No. A participant cannot pledge shares held in the Plan account. A
participant who wishes to pledge such shares must request that a certificate be
issued in the participant's name.
19. If a participant requests shares, in whose name will the certificates be
issued?
The Plan accounts are maintained in the exact name in which the
participant's certificates were registered at the time he or she joined the
Plan. Accordingly, certificates for shares will be issued in the same name.
20. How will a participant's shares be voted at shareholder meetings?
Each participant will receive a proxy card that represents both the number
of shares registered in the participant's name and the number of full shares
credited to the participant's Plan account. All such shares will be voted in
accordance with the shareholder's instructions on the proxy card. If a
participant does not return the proxy card, or if it is returned unsigned, none
of the shares will be voted unless the participant votes in person.
21. What happens to a participant's Plan account when all of the shares
registered in the participant's name and held in certificate form are sold
or transferred?
Plan shares will continue to be held in the participant's account.
Dividends on shares credited to the participant's account will continue to be
reinvested until the participant requests that the shares be issued, sold or
transferred.
22. May the Plan be changed or discontinued?
Yes. GTE may suspend, modify or terminate the Plan, or any participant's
account, at any time at its sole discretion. GTE and the Administrator will not
be liable for any act done in good faith or for any good faith failure to act in
connection with any change or termination of the Plan. GTE will advise the
participants of any such action as soon as practicable.
WITHDRAWAL FROM THE PLAN
23. How does a participant withdraw from the Plan?
To withdraw from the Plan, a participant must submit a notice of withdrawal
to the Administrator. A participant may withdraw fewer than all of his or her
shares enrolled in the Plan. The participant may continue to participate in the
Plan with respect to any shares remaining in the Plan. Participants may request
a certificate by telephoning the Administrator at (800)225-5160.
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24. When may a participant withdraw from the Plan?
A participant may withdraw either all or a portion of his or her shares
from the Plan at any time. For the withdrawal to be effective as of a specific
dividend payment date, the Administrator must receive the request to withdraw on
or before the 15th day of the month preceding that dividend payment date. If the
withdrawal is received by the deadline, all dividends payable on the withdrawn
shares will be paid in cash. If a participant withdraws all shares in his or her
Plan account, the account will be terminated and the participant will be sent a
certificate for any whole shares withdrawn and a check representing any
fractional share credited to the Plan account.
25. May a participant elect to receive cash instead of certificates when
withdrawing shares from his or her account?
Yes. The participant may request that the Administrator sell any number of
shares held in his or her Plan account. The participant must specify the number
of shares to be sold. The Administrator will send the participant the cash
proceeds (sales price less applicable brokerage commissions and transfer tax (if
any)) of the sale. This option is available to Plan participants only for those
shares held in their Plan accounts and may be exercised at any time.
26. Does a participant pay any expenses in connection with a requested sale?
Yes. Normally an independent broker designated by the Administrator will
make the sale. The proceeds of the sale, less applicable brokerage commissions
and transfer tax (if any), will be forwarded to the participant within five
business days of receipt of the request.
TAX CONSEQUENCES
27. What are the Federal income tax consequences to participants?
For Federal income tax purposes, reinvested dividends are treated as though
they had been received in cash on the dividend payment date. This applies even
though the reinvested dividends are used to purchase additional shares and pay
the participant's service fees.
The tax cost basis per share for the whole or fractional shares purchased
with reinvested dividends is the amount treated as a dividend divided by the
number of shares purchased. Brokerage commissions are includable in the basis of
the shares purchased by GTE in the open market. In the case of shares purchased
with Optional Payments, the tax cost basis is the purchase price per share,
including brokerage commissions for shares purchased by GTE in the open market.
The holding period for the shares purchased under the Plan will begin on
the day after the shares are credited to the participant's account. Subject to
certain limitations contained in the Internal Revenue Code, the quarterly
service fee may be deductible by participants who itemize deductions.
Participants will not realize taxable income when they receive a
certificate for any of the full shares credited to their Plan accounts, either
upon a request for such certificates or upon complete withdrawal from or
termination of the Plan. Participants will realize gain or loss when their
shares are sold, either by the Administrator at the participant's request or by
the participant after withdrawing such shares from the Plan. Participant will
realize gain or loss on a fractional share when they receive a cash payment for
a fractional share, usually as a result of either a complete withdrawal from the
Plan or the termination of the Plan. The amount of such gain or loss will be the
difference between the amount a participant receives for the sold shares (or
fractional shares) and the tax cost basis of the shares, including applicable
11
<PAGE> 12
brokerage commissions and any transfer taxes. Under income tax regulations, if
the tax cost basis of the shares sold cannot be adequately identified, a
participant may use the tax cost basis of the identical number of shares in his
or her account that have been owned for the longest period of time (the
first-in, first-out rule).
The Administrator will send information statements to each participant and
to the Internal Revenue Service reporting: (1) the amount of dividends
considered to have been paid to each participant each year; and (2) each
transaction during the year that results in the participant receiving the cash
proceeds from the sale of all or some of the shares in his or her account.
PARTICIPANTS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS TO DETERMINE THE
FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF PARTICIPATING IN THE PLAN AND THE
SUBSEQUENT SALE OF SHARES PURCHASED UNDER THE PLAN.
28. Is United States income tax withheld for foreign shareholders whose
dividends are subject to United States income tax?
The income tax consequences for participants who do not reside in the
United States will vary from jurisdiction to jurisdiction. The Administrator
will deduct the amount of the tax to be withheld for foreign shareholders whose
dividends are subject to United States income tax withholding. The Administrator
will apply the remaining amount of the dividend to the purchase of shares of
Common Stock under the Plan. Foreign participants may make optional payments,
but such payments must be in United States currency.
INDIVIDUAL RETIREMENT ACCOUNTS
29. May a participant open an Individual Retirement Account with the
Administrator?
Yes. As a convenience to GTE's shareholders, the Administrator offers an
Individual Retirement Account ("IRA") that invests in GTE Common Stock through
the Plan (the "IRA Program"). After receiving a copy of this Prospectus, the
Administrator's IRA Program Plan and Trust Agreement and Disclosure Statement, a
participant may open an IRA by completing and signing an IRA Enrollment Form and
returning it to the Administrator with an initial contribution. The minimum
initial investment for the IRA Program is $250. IRA Enrollment Forms are
available upon request from the Administrator.
Some of the options and services generally available to Plan participants
may not be applicable to the IRA Program. Please refer to the IRA Program Plan
and Trust Agreement and Disclosure Statement for IRA Program details. The
Administrator has the right to charge reasonable fees for its IRA services. Such
fees are described in the IRA Disclosure Statement as in effect from time to
time. GTE assumes no responsibility for the operation or administration of the
IRA Program.
EXPERTS AND LEGAL OPINION
The consolidated financial statements and schedules included in GTE's
Annual Report on Form 10-K for the year ended December 31, 1994, which are
incorporated by reference in this Prospectus, have been audited by Arthur
Anderson LLP, independent public accountants, as indicated in their report with
respect thereto, and are incorporated herein in reliance upon the authority of
said firm as experts in giving said report. Reference is made to said report,
which includes an explanatory paragraph with respect to changes in methods of
accounting for post-retirement benefits other than pensions, and for income
taxes, effective January 1, 1992, as disclosed in Note 5 to the consolidated
financial statements.
12
<PAGE> 13
Certain legal matters in connection with the GTE Common Stock offered
hereunder have been passed upon for GTE by William P. Barr, Esq., its Senior
Vice President and General Counsel. As of July 25, 1995, Mr. Barr was a
beneficial owner of approximately 75 shares of GTE Common Stock and had options
to purchase an aggregate of 107,600 shares of GTE Common Stock.
INDEMNIFICATION
As permitted by law, directors and officers of GTE are entitled to
indemnification under certain circumstances against liabilities and expenses
incurred in connection with legal proceedings in which they become involved as a
result of serving as such director or officer. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers or persons controlling GTE pursuant to the foregoing
provisions, GTE has been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
13
<PAGE> 14
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GTE HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933 WITH RESPECT TO THE SHARES OF ITS
COMMON STOCK BEING OFFERED PURSUANT TO ITS SHAREHOLDER SYSTEMATIC INVESTMENT
PLAN.
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CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Statement of Available
Information........................ 2
Incorporation of Certain
Documents by Reference............. 2
The Corporation...................... 2
Description of Capital Stock......... 3
Common Stock....................... 3
Rights............................. 3
Preferred Stock and No Par
Preferred Stock................. 5
Use of Proceeds...................... 5
The Plan............................. 5
Purpose and Advantages of
the Plan........................ 5
Becoming a Participant
in the Plan..................... 6
Expenses........................... 7
How the Plan Works................. 7
Withdrawal from the Plan........... 10
Tax Consequences................... 11
Individual Retirement Accounts....... 12
Experts and Legal Opinion............ 12
Indemnification...................... 13
</TABLE>
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NO PERSON IS AUTHORIZED BY GTE OR BY ANY OF ITS SUBSIDIARIES TO GIVE ANY
INFORMATION OR ANY REPRESENTATIONS OTHER THAN AS CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THIS OFFERING AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY GTE OR BY
ANY OF ITS SUBSIDIARIES. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME SHALL NOT
UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY, BY GTE OR BY
ANY OF ITS SUBSIDIARIES IN ANY STATE OR JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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GTE CORPORATION (LOGO)
SHAREHOLDER SYSTEMATIC
INVESTMENT PLAN
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PROSPECTUS
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DATED AUGUST 15, 1995
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