As filed with the Securities and Exchange Commission on August 8,
1995
Registration No. 33-
_________________________________________________________________
____________
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
__________
GTE CORPORATION
(Exact name of registrant as specified in charter)
NEW YORK 13-1678633
(State of Incorporation) (I.R.S. Employer
Identification
No.)
ONE STAMFORD FORUM
STAMFORD, CONNECTICUT 06904
(203-965-2000)
(Address and telephone number of principal executive offices)
J. MICHAEL KELLY
GTE CORPORATION
ONE STAMFORD FORUM
STAMFORD, CONNECTICUT 06904
(203-965-2000)
(Name, address and telephone number of agent for service)
__________
Approximate date of commencement of proposed sale to public:
As soon as practicable on or after the effective date of the
Registration Statement.
If the only securities registered on this form are to be
offered pursuant to dividend or interest reinvestment plans,
please check the following box. /X/
If any of the securities being registered on this form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. / /
__________
CALCULATION OF REGISTRATION FEE
_________________________________________________________________
____________
<TABLE>
<CAPTION>
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of Being Offering Price
Aggregate Registration
Securities Being Registered Registered Per Share Offering
Price Fee
_________________________________________________________________
____________
<S> <C> <C> <C> <C>
Common Stock, par value
$.05 per share 25,000,000 shares $35.69*
$892,250,000.00 307,672.41*
_________________________________________________________________
____________
</TABLE>
* The shares are to be offered at prices not presently
determinable. Pursuant to Rule 457(c) under the Securities Act
of 1933, the registration fee is calculated based upon the
average of the high and low prices of the Common Stock of GTE
Corporation on the consolidated reporting system on August 3,
1995.
__________
Prospectus herein also relates to Registration Statement No. 33-
50263 pursuant to Rule 429 under the Securities Act of 1933.
PROSPECTUS
GTE CORPORATION (LOGO)
GTE CORPORATION
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 its Common and
Preferred Stock with a convenient and systematic method of
purchasing additional Common Stock. Any owner of record of
Common or Preferred Stock of GTE Corporation ("GTE") 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 or 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 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.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
____________________
The date of this Prospectus is August 8, 1995.
STATEMENT OF AVAILABLE INFORMATION
GTE Corporation ("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 Report on
Form 10-Q for the quarter ended March 31, 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 (the "Exchange Act")
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 State on February 25,
1935 and has its principal executive offices at One Stamford
Forum, Stamford, Connecticut 06904, telephone (203) 965-2000.
THE PLAN IS ADMINISTERED FOR THE CORPORATION 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
-2-
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,
-3-
(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.
-4-
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 or
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 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 (see Question 10).
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.
-5-
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 shares of GTE Common or
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 the
participant's shares towards the purchase of additional shares of
GTE Common Stock. The dividends on shares held in the
participant'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.
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.
-6-
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 participant'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 participant's Plan account will be applied
towards the purchase of additional shares of GTE Common Stock
under the Plan. If a shareholder elects to participate in the
Optional Payments only feature and later decides to enroll in the
dividend reinvestment feature 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 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?
-7-
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 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.
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).
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.
-8-
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 a 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 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.
-9-
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.
-10-
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) 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
any brokerage commissions and transfer tax, 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
-11-
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 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
-12-
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.
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.
SSIP:E:16
-13-
________________________________________
____________________________
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.
____________________
CONTENTS
Page
____
Statement of Available
Information ................ 2 GTE
Corporation
Incorporation of Certain
Documents by Reference ..... 2
The Corporation ................. 2
Description of Capital Stock..... 3
Use of Proceeds ................. 5 (LOGO)
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
_____________________
PROSPECTUS
No person is authorized by GTE or by Dated August 8, 1995
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 con-
stitute an offer to sell or a solici-
tation 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.
________________________________________
____________________________
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a statement of estimated expenses in
connection with the issuance and distribution of the securities
being registered.
1.Registration Fee ...................................
$307,672.41
2.Fees and expenses of Transfer Agent and Registrar ..48
5,000.00
3.Cost of printing and engraving .....................75
,000.00
4.Stock exchanges' listing fees ......................25
,650.00
5.Accounting fees ....................................5,
000.00
6.Miscellaneous ...................................... 1
,677.59
___________
$900,000.00
___________
Item 15. Indemnification of Directors and Officers.
GTE Corporation ("GTE") is a New York corporation. As
permitted by New York law, and as set forth in GTE's By-Laws, a
director or officer of GTE is entitled to indemnification by GTE
against reasonable expenses, including attorneys' fees, incurred
in connection with a civil or criminal proceeding in which such
director or officer has been involved, or to which he has been,
or is threatened to be, made a party, by reason of being a
director or officer. In addition, indemnification may be
provided against judgments, fines and amounts paid in settlement
in such proceedings. In general, however, indemnification is not
available where the director or officer acted in bad faith or
personally gained a financial profit or other advantage to which
he was not legally entitled. The directors and officers of GTE
also are covered by insurance policies against certain
liabilities which might be incurred by them in such capacities.
Item 16. Exhibits.
See Exhibit Index on Page E-1.
Item 17. Undertakings.
GTE hereby undertakes that, for the purposes of determining
any liability under the Securities Act of 1933, each filing of
GTE's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
GTE hereby undertakes to file, during any period in which
offers or sales are being made, a post-effective amendment to
this registration statement to include any material information
with respect to the plan of distribution not previously disclosed
in this registration statement or any material change to such
information in this registration statement, and that for the
purpose of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof. GTE also hereby
undertakes to remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
II-1
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to officers, directors
and controlling persons of GTE pursuant to any charter provision,
by-law, contract, arrangement, statute or otherwise, GTE has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than payment by GTE of expenses incurred or paid by an
officer, director or controlling person of GTE in the successful
defense of any action, suit or proceeding) is asserted by such
officer, director or controlling person in connection with the
securities being registered, GTE will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
SSIP:E:19
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Stamford, and State of Connecticut on the 3rd day of
August, 1995.
GTE Corporation
(Registrant)
By: J. MICHAEL KELLY
_____________________________
(J. Michael Kelly)
Senior Vice President-Finance
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
(1) Principal executive officer:
CHARLES R. LEE )
__________________________________ Chairman of
the Board and )
(Charles R. Lee) Chief Executive Officer )
)
)
(2) Principal financial officer: )
)
)
)
J. MICHAEL KELLY )
__________________________________ Senior Vice
President- )
(J. Michael Kelly) Finance )
)
)
(3) Principal accounting officer: )August 3,
1995
)
)
)
LAWRENCE R. WHITMAN )
__________________________________ Vice President
and )
(Lawrence R. Whitman) Controller )
)
)
(4) Directors: )
)
)
)
EDWIN L. ARTZT )
__________________________________ Director )
(Edwin L. Artzt) )
)
)
II-3
JAMES R. BARKER )
__________________________________ Director )
(James R. Barker) )
)
)
)
EDWARD H. BUDD )
__________________________________ Director )
(Edward H. Budd) )
)
)
)
KENT B. FOSTER )
__________________________________ Director )
(Kent B. Foster) )
)
)
)
JAMES L. JOHNSON )
__________________________________ Director )
(James L. Johnson) )
)
)
)
RICHARD W. JONES )
__________________________________ Director )August 3,
1995
(Richard W. Jones) )
)
)
)
JAMES L. KETELSEN )
__________________________________ Director )
(James L. Ketelsen) )
)
)
)
CHARLES R. LEE )
__________________________________ Director )
(Charles R. Lee) )
)
)
)
MICHAEL T. MASIN )
__________________________________ Director )
(Michael T. Masin) )
)
)
)
SANDRA O. MOOSE )
__________________________________ Director )
(Sandra O. Moose)
II-4
RUSSELL E. PALMER )
__________________________________ Director )
(Russell E. Palmer) )
)
)
)
HOWARD SLOAN )
__________________________________ Director ) August
3, 1995
(Howard Sloan) )
)
)
)
ROBERT D. STOREY )
__________________________________ Director )
(Robert D. Storey) )
SSIP:E:22
II-5
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form
S-3 of our report dated January 26, 1995, included in GTE
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994, and to the reference to our Firm under the
caption "Experts and Legal Opinion" in this Registration
Statement.
ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Stamford, Connecticut
August 4, 1995
II-6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBERS
_______
<C> <S>
3.1 Restated Certificate of Incorporation (incorporated
by reference from GTE Corporation's Registration
Statement on Form S-3, File No. 33-50263, and GTE
Corporation's Annual Report on Form 10-K for the years
ended December 31, 1994 and 1993).
3.2 By-Laws, as amended (incorporated by reference from
GTE Corporation's Registration Statement on Form S-3,
File No. 33-50263, and GTE Corporation's Annual Report
on Form 10-K for the year ended December 31, 1993).
Amendment to By-Laws dated August 3, 1995 filed
herewith.
4.1 Description of Rights (incorporated by reference
from GTE Corporation's Registration Statement on Form 8-
A dated December 13, 1989).
5.1 Opinion of William P. Barr, Esq.
23.1 The consent of Arthur Andersen LLP is included
elsewhere in this Registration Statement.
23.2 The consent of William P. Barr, Esq. is contained
in his opinion filed as Exhibit 5.1 to this Registration
Statement.
99.1 GTE Shareholder Systematic Investment Plan, as
amended.
</TABLE>
SSIP:E:24
E-1
Exhibit
3.2
Amendments
to the
By-Laws of GTE Corporation
(Effective August 3, 1995)
Section 11 of the By-Laws of the Corporation is amended by
deleting the fourth paragraph thereof in its entirety and by
replacing it with the following paragraph:
No person shall serve as a director after the annual
meeting
of stockholders of the Corporation following the date on
which he
or she reaches age 72 and no person who has reached age 72
shall be eligible for election as a director of the
Corporation.
Section 28A of the By-Laws of the Corporation is amended by
deleting the second paragraph thereof in its entirety and
replacing it with the following paragraph:
In the absence of the Chairman of the Board and the
President, he shall preside at all Board meetings.
Section 29 of the By-Laws of the Corporation is amended by
deleting the second paragraph thereof in its entirety and
replacing it with the following paragraph:
In the absence of the Chairman of the Board, he shall
preside at all meetings of the Board of Directors and
stockholders; notwithstanding the foregoing, in the event of the
disability of the Chairman of the Board or if his office shall
at any time become
vacant, the President shall have and possess all of the
powers and discharge all of the duties of the Chairman of the
Board during such disability or until the vacancy in that
office shall be filled.
SSIP:E:26
William P. Barr, Esq.
Senior Vice President and General Counsel
GTE Corporation
One Stamford Forum
Stamford, CT 06904
August 4, 1995
GTE Corporation
One Stamford Forum
Stamford, Connecticut 06904
Dear Sirs:
I refer to the proposed issuance and sale by GTE Corporation (the
"Corporation") of up to an additional 25,000,000 shares of Common
Stock, par value $.05 per share, through the GTE Corporation
Shareholder Systematic Investment Plan (hereinafter called the
"Stock").
I have examined a copy of the Registration Statement on Form S-3
for the registration of the Stock under the Securities Act of
1933, as amended (the "Registration Statement"). I have also
examined copies of the Corporation's Restated Certificate of
Incorporation, as filed by the Corporation in the office of the
Secretary of State of the State of New York, and such corporate
records and other documents as I have deemed necessary in order
to enable me to express the opinions set forth below.
In my opinion, when:
1. the Registration Statement shall have become effective,
as the same may have been amended;
2. the Stock shall have been duly issued and sold as
heretofore authorized by the Corporation's Board of
Directors and as contemplated in the Prospectus forming
a part of the Registration Statement (the "Prospectus");
and
3. the Corporation shall have received consideration of not
less than $.05 for each share of the Stock so issued and
sold;
the Stock issued and sold pursuant to the Registration Statement
will be, upon the execution and delivery of proper certificates
therefor, legally issued and outstanding, fully paid and
nonassessable shares of Common Stock of the Corporation, and no
personal liability will attach to the holders, as such, of the
Stock.
I hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to this opinion
under the caption "Experts and Legal Opinion" in the Prospectus.
Very truly yours,
William P. Barr
SSIP:E:28
EXHIBIT 99.1
GTE CORPORATION
Shareholder Systematic Investment Plan
(effective October 1, 1995)
The GTE Corporation Shareholder Systematic Investment Plan (the
"Plan"),
provides owners of record of shares of its Common or Preferred
Stock with a convenient and systematic method of purchasing
additional shares of GTE Common Stock ("Common Stock") through
reinvesting cash dividends and/or optional payments. The Plan
will be administered for GTE Corporation ("GTE") by The First
National Bank of Boston, (the "Administrator").
I. Enrollment in the Plan
A.Authorization Forms
All holders of record of shares of GTE Common or Preferred
Stock are eligible to participate in the Plan and may join
the Plan at any time by returning a properly executed
Authorization Form to the Administrator. A shareholder
will be enrolled in the Plan as soon as the Authorization
Form is received by the Administrator.
B.Participation Dates
In order to participate in the Plan on any dividend
payment date, the Authorization Form must be received by
the Administrator on or before the 10th day of the month
preceding that dividend payment date. A participant whose
Authorization Form is received after the 10th day of the
month preceding a dividend payment date will receive that
dividend payment in cash, and will begin participating in
the Plan with respect to reinvestment of dividends on the
next following dividend payment date.
II.Reinvestment of Dividends and Optional Payments
A.Full Dividend Reinvestment
If a participant authorizes the reinvestment of all
dividends, the dividends received on all shares registered
in the name of the participant and dividends paid on full
and fractional shares credited by the Administrator to the
participant's account will be reinvested in additional
shares of Common Stock.
B.Optional Payments
1. Although optional payments may be made at any time,
shares for participants are purchased on a monthly
basis.
2. Participants in the Plan electing to make optional
payments may make such payments in an amount ranging
from no less than $25 to no more than $100,000 per
calendar year.
3. 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 on the next preceding business
day.
4. In order for a participant's optional payment to be
invested on a given investment date, the participant's
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.
5. A participant may obtain the return of any
uninvested cash payment by notifying the Administrator.
6. Dividends paid on shares purchased with such
optional payments and credited to the participant's
account will be automatically reinvested in additional
shares of Common Stock.
7. Optional payments must be in the form of a check,
money order or electronic funds transfer in United
States currency made payable to "GTE Corporation".
8. No interest will be paid in connection with
optional payments.
C. Partial Dividend Reinvestment (Split Participation)
1. A participant may elect to reinvest dividends on
fewer than all shares held either in certificate form or
in the Plan. Dividends paid on full and fractional
shares held in the Plan will be reinvested in additional
shares of GTE Common Stock. The participant will
continue to receive cash dividends on the other shares
which have not been enrolled in the Plan.
2. A participant who authorizes the partial
reinvestment of dividends must specify the number of
shares upon which the dividends are to be paid in cash.
3. A participant may change the number of shares
designated for participation in the Plan by submitting a
written request to the Administrator on or before the
10th day of the month preceding that dividend payment
date upon which the change is to be effected.
III. General Provisions Relating to the Operation of the Plan
A. Fees and Expenses to Be Paid by Participants
1. The purchase price per share will include brokerage
commissions if the Administrator acquires shares of GTE
Common Stock in the open market.
2. Participants will be charged a quarterly fee equal
to the lesser of $1 or 5% of the quarterly dividend and
cash investment amount.
3. If a participant elects to sell shares while
remaining enrolled in the Plan or terminating
participation, the applicable brokerage commissions and
transfer tax (if any) will be paid by the participant.
-2-
B. Purchases Directly from GTE
1. 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 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).
2. 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.
C.Purchases in the Open Market
1. The price of shares purchased in the open market
with reinvested cash dividends or with optional payments
will be the average cost of such shares, including
brokerage commissions, incurred in connection with the
purchase of such 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.
2. The investment period will be determined by the
Administrator in compliance with any applicable Federal
securities laws.
3. With respect to a month in which a dividend is
payable, optional payments will be aggregated with
reinvested cash dividends for the purpose of determining
the total amount of funds to be invested.
D. Combined Purchases
In the event that purchases of shares are made both
directly from GTE and in the open market within a single
investment period, 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.
E. Choice of Method of Purchase
GTE shall have sole discretion to determine whether shares
will be newly issued shares, treasury shares, shares
purchased in the open market by the Administrator or any
combination of the foregoing.
F. Account Statements
1. A participant will receive a statement of account
after each share purchase or quarterly dividend if no
optional payment is made.
2. Shares credited to a participant's account either
through reinvested dividends or optional cash
investments will be held in book entry form.
G. Issuance of Certificates
1. Shares purchased with either reinvested dividends
or optional payments will automatically be held in the
participant's Plan account, unless otherwise directed.
Certificates will not be
-3-
issued unless a participant instructs the Administrator
to issue a certificate for any number of shares at any
time.
2. If a participant withdraws all shares and
terminates participation in the Plan, a certificate will
be issued for the number of all whole shares held in the
participant's account along with a check representing
the value of any fractional share.
H. Sale of Shares
Subject to Reinvestment
1. If all of the
participant's shares are sold or transferred, the
participant must advise the Administrator in writing as
to the disposition of shares credited to the Plan
account.
2. If a participant
does not advise the Administrator, the dividends on the
shares credited to the participant's account will
continue to be reinvested until a request for issuance
of the shares is received from the participant.
I. Stock Dividends, Stock Splits and Rights Offerings
1. Any dividends paid in stock or split shares
distributed by GTE on shares held by the Administrator
that are credited to the account of a participant will
be added to the participant's account. Dividends paid
on shares acquired in this manner will be automatically
reinvested in additional shares of Common Stock.
2. Any dividend paid in stock or split shares
distributed on shares registered in the name of a
participant will be mailed directly to the participant
in the same manner as to shareholders who are not
participating in the Plan. Dividends paid on shares
acquired in this manner will not participate in the Plan
unless the participant has previously elected full
dividend reinvestment participation or so advises the
Administrator in writing.
3. In the event of a reverse stock split, the
participant's account will be adjusted to reflect that
fact.
4. In the case of a rights offering, the amount of
rights granted to a participant will be based upon
holdings of whole shares. Rights will be issued and
mailed to a participant for the number of whole shares
only.
J. Foreign Participants
1. In the case of foreign participants whose dividends
are subject to United States income tax withholding, the
amount of the tax to be withheld will be deducted and
the remaining amount of the dividend applied to the
purchase of shares of Common Stock under the Plan.
2. Foreign participants may make optional payments but
such payments must be in United States currency.
K. Limitation of Liability
In connection with the Plan, neither GTE, its agents nor
the Administrator will be liable for any act done in good
faith or for any good faith omission to act, including,
without limitation, any liability arising out of the
failure to terminate the participant's account upon such
participant's death prior to receipt of notice in writing
of such death, or with respect to the price at which
shares are purchased for the participant's account.
-4-
L. Dividend Direct Deposit Service
1. 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.
2. To receive such dividends by direct deposit,
participants must first complete and sign the Dividend
Direct Deposit Authorization Form designating their bank
and return the form to the Administrator.
3. Participants may request Dividend Direct Deposit
Authorization Forms from the Administrator. Forms will
be processed and will become effective as promptly as
practicable.
4. Participants may change the designated account for
direct deposit or discontinue this service by written
instruction to the Administrator.
5. In order to be effective with respect to a
particular dividend, the Dividend Direct Deposit
Authorization Form and any subsequent instructions must
be received by the Administrator at least 60 days prior
to the dividend payment date.
M. Certificate Deposit
1. A Plan participant may deposit any or all shares
represented by Common Stock share certificates held by
the participant into his or her Plan account for
safekeeping.
2. Certificate deposits can be made by mailing the
certificate, via registered or certified mail, to the
Administrator. Participants bear the risk of loss in
transit.
3. Certificates need not be endorsed to be deposited
into the Plan.
4. Dividends on all shares deposited into the Plan
will be reinvested unless the partial dividend
reinvestment option has been selected by the
participant.
N. Pledges of Shares Not Permitted
1. Shares held in the Plan account may not be pledged
(secured for a loan).
2. A participant who wishes to pledge shares held in a
Plan account must request that a certificate be issued
in the participant's name.
IV. Withdrawal of Shares From the Plan and Termination of
Participation
A. Partial Withdrawal
1. A participant may withdraw a portion of the shares
held under the Plan at any time and continue to
participate in the Plan.
2. Certificates for any number of whole shares held in
the participant's account under the Plan will be issued
upon request by the participant. There shall be no
charge to the participant for this issuance.
-5-
3. Any remaining full shares and fraction of a share
in the participant's Plan account will continue to be
reinvested.
4. Certificates for a fractional share will not be
issued under any circumstances.
5. Participants requesting fractional share
reimbursement may receive a cash payment.
B. Cash Settlement
1. A participant may request a cash settlement for any
number of shares and any fractional share held in his or
her Plan account.
2. Upon receipt of the request, the sale normally will
be made for the account of the participant by an
independent broker designated by the Administrator and
the proceeds of the sale, less any brokerage commission
and any applicable transfer tax, will be forwarded to
the participant within five business days.
3. A participant may request a cash settlement on
those shares held in his or her Plan account at any
time.
4. The amount of the cash settlement for any amount of
whole shares and any fractional share held in the Plan
account will be based upon the price at which the sale
is made by an independent broker designated by the
Administrator less brokerage commissions and any
transfer tax.
5. A sale will not require termination of
participation in the Plan unless after such sale the
participant no longer owns any shares of Common or
Preferred Stock.
C. Withdrawal Deadline
1. In order for the withdrawal to be effective as of a
dividend payment date, the Administrator must receive
the request to withdraw on or before the 15th day of the
month preceding a dividend payment date.
2. If the withdrawal is received by the deadline, all
dividends payable on that date with respect to shares
withdrawn will be paid in cash.
3. If all shares have been withdrawn, the
participant's Plan account will be terminated and the
participant will be sent a certificate for any whole
shares withdrawn and a cash payment for any fractional
share credited to the Plan account.
4. The withdrawal deadline applies to sales as well as
certificate withdrawals.
D. Termination of Participation
1. When a shareholder terminates from the Plan, or
upon termination of the Plan, a certificate for whole
shares in a participant's account will be issued along
with a cash payment for any fractional share balance in
the account.
-6-
2. Upon termination the participant may request a cash
settlement for any amount of whole shares and any
fractional share in his or her Plan account. The amount
of the cash payment for a fraction of a share of the
cash settlement will be based upon the price at which
the sale is made less any brokerage commission and any
applicable transfer tax incurred due to the sale made
for the amount of the participant by an independent
broker designated by the Administrator should the
participant exercise the cash settlement option upon
termination.
3. In the event the Plan or any participant's account
is terminated, certificates for full shares in a
participant's account will be issued and a cash payment
will be made for any fraction of a share.
V. Reservation of Rights by GTE
A. Amendment or Termination of the Plan
GTE expressly reserves the right to suspend, modify, amend
or terminate the Plan, and to terminate any participant's
account at any time.
B. Interpretation of the Plan
Determinations by GTE as to any questions which may arise
with respect to the interpretation of provisions of the
Plan shall be conclusive.
C. Notification to Participants
Any suspension, termination, amendment, or modification of
the Plan will be reported to participants as soon as
practicable.
D. Death or Incompetence of a Participant
GTE expressly reserves the right under the Plan to defer
issuance of whole shares with respect to a participant's
account which is terminated because of death or
incompetence, until such time as satisfactory proof is
received of the due appointment of a legal representative
for such deceased or incompetent participant or the proper
distribution of such shares and amounts.
E. Suspension of Purchases
Applicable law, the closing of securities markets or other
events may require the temporary curtailment or suspension
of trading in shares of GTE Common Stock, and GTE, its
agents and the Administrator are not accountable for the
inability to perform at such times including, without
limitation, inability to compute purchase prices or
amounts to be paid on termination of or withdrawal from
the Plan.
VI. Miscellaneous Provisions
A. Notices
1. Any notices or requests to be sent by participants
pursuant to this Plan shall be sent to:
The First National Bank of Boston
P. O. Box 9092
Boston, MA 02205-9092
-7-
or to any substitute address established by the
Administrator.
2. Any notice to be given by a participant shall be
deemed given when received by the Administrator.
3. Any notices or other material to be sent pursuant
to this Plan to shareholders or participants by GTE or
the Administrator shall be mailed postage prepaid to the
last known address of such shareholder or participant.
4. Any notice to be given to shareholders or
participants shall be deemed given when mailed postage
prepaid by the Administrator.
B. Governing Law
This Plan shall be governed by and construed in accordance
with the laws of the State of New York.
SSIP:E:37
-8-
