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As filed with the Securities and Exchange Commission on November 5, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GTE Corporation
(Exact name of registrant as specified in charter)
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<S> <C>
New York 13-1678633
(State of Incorporation) (I.R.S. Employer Identification No.)
</TABLE>
1255 Corporate Drive, SVC04C08, Irving, Texas 75038
(972-507-5000)
(Address and telephone number of principal executive offices)
DANIEL P. O'BRIEN
GTE Corporation
1255 Corporate Drive
Irving, Texas 75038
(972-507-5000)
(Name, address and telephone number of agent for service)
---------------
Copies to:
ROBERT W. MULLEN, JR., ESQ.
Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaza
New York, New York 10005
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed
maximum
offering Proposed
Title of each class of price maximum Amount of
securities Amount to per aggregate registration
to be registered be registered unit offering price fee(1)
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<S> <C> <C> <C> <C>
Debt Securities......... $1,375,000,000(2)(3) 100% $1,375,000,000(2)(3) $382,250
</TABLE>
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(1) Registration fee is calculated pursuant to Rule 457(a) under the
Securities Act of 1933.
(2) This may include an additional principal amount of Debt Securities which
may be issued with an original issue discount such that the aggregate
initial public offering price of the Debt Securities registered hereby
will not exceed $1,375,000,000. The initial public offering price of any
Debt Security denominated in any foreign currency or currency unit shall
be the U.S. dollar equivalent thereof at the time of sale.
(3) In U.S. dollars or the equivalent thereof in the case of foreign
currencies or currency equivalents.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
SUBJECT TO COMPLETION, DATED NOVEMBER 5, 1999
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS
$1,375,000,000
GTE Corporation [LOGO]
DEBT SECURITIES
-----------------------------------
GTE Corporation intends to offer at one or more times debt securities with a
total offering price not to exceed $1,375,000,000. We will provide the specific
terms of these securities in supplements to this prospectus. You should read
this prospectus and the supplements carefully before you invest.
-----------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
, 1999
<PAGE>
TABLE OF CONTENTS
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<S> <C>
About this Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
The Company................................................................ 3
Proposed Merger with Bell Atlantic Corporation............................. 3
Recent Developments........................................................ 4
Use of Proceeds............................................................ 4
Consolidated Ratios of Earnings to Fixed Charges........................... 5
Description of the Debt Securities......................................... 5
Experts.................................................................... 9
Legal Matters.............................................................. 9
Plan of Distribution....................................................... 10
</TABLE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf process, we may, from time to time, sell the debt securities
described in this prospectus in one or more offerings with a total offering
price not to exceed $1,375,000,000. This prospectus provides you with a general
description of the debt securities. Each time we sell debt securities, we will
provide a prospectus supplement (and a pricing supplement, if any) that will
contain specific information about the terms of that offering. The prospectus
supplement or pricing supplement may also add, update or change information in
this prospectus. The information in this prospectus is accurate as of ,
1999. Please carefully read both this prospectus, any prospectus supplement and
any pricing supplement together with additional information described under the
heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the public reference rooms. Our SEC filings are also available to the public
over the Internet at the SEC's web site at http://www.sec.gov. We also maintain
a web site at http://www.gte.com. Our common stock is listed on the New York
Stock Exchange, The Chicago Stock Exchange and the Pacific Exchange. We have
also issued other securities which are listed on the New York Stock Exchange.
Our SEC filings are also available at those exchanges.
Once our merger with Bell Atlantic Corporation described under "Proposed Merger
with Bell Atlantic Corporation" is completed, our common stock will no longer
be listed on any of these exchanges. Under the rules of the SEC, we may
discontinue filing reports or other information with the SEC if each class of
our debt securities is owned of record by less than three hundred persons and
no class of our securities is listed on a stock exchange. Provided that these
two circumstances occur, we could discontinue filing information with the SEC
after we file an Annual Report on Form 10-K for the year in which our most
recent series of debt securities is issued. We are currently evaluating actions
which could permit us to discontinue our reporting requirements.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information.
Information on our web site is not incorporated by reference into this
prospectus. We incorporate by reference the following documents and any future
filings we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until we or any underwriters sell all of the
debt securities:
. Annual Report on Form 10-K for the year ended December 31, 1998;
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. Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30,
1999;
. Current Reports on Form 8-K filed on January 20, January 26, April 5, April
28, May 10, August 26 and September 23, 1999; and
. Joint Proxy Statement and Prospectus of GTE Corporation and Bell Atlantic
Corporation filed on April 14, 1999.
You may request a copy of these filings at no cost, by writing or calling us at
the following address:
Assistant Secretary
GTE Corporation
1255 Corporate Drive
Mail Code: SVC04A34
Irving, Texas 75038
(972) 507-5243
You should rely only on the information incorporated by reference or provided
in this prospectus or any supplement. We have not authorized anyone else to
provide you with different information.
THE COMPANY
We are one of the largest publicly-held telecommunications companies in the
world. Our domestic and international operations serve approximately 35 million
access lines through subsidiaries in the United States, Canada and the
Dominican Republic and through affiliates in Canada, Puerto Rico and Venezuela.
We are a leading mobile-cellular operator in the United States, where we serve
approximately 5.2 million wireless customers, and have the opportunity to serve
approximately 61.9 million potential wireless customers. Outside the fifty
states, we operate mobile-cellular networks serving approximately 5.6 million
customers with the opportunity to serve approximately 34.7 million potential
wireless customers through subsidiaries in Argentina, Canada and the Dominican
Republic and affiliates in Canada, Puerto Rico, Taiwan and Venezuela. When we
refer to "potential wireless customers," we mean the number of people living in
the relevant area served by our wireless operations, adjusted to reflect our
ownership interests in these wireless operations.
Beginning in 1996, we became the first among our peers to offer "one-stop
shopping" for local, long-distance and Internet access services. We are also a
leader in directories and telecommunication-based information services and
systems.
Our principal executive offices are located at 1255 Corporate Drive, SVC04C08,
Irving, Texas 75038, telephone (972) 507-5000.
PROPOSED MERGER WITH BELL ATLANTIC CORPORATION
On July 28, 1998, we announced our intentions to combine in a merger of equals
with Bell Atlantic Corporation. Both companies are working diligently to
complete the merger and are targeting completion of the merger around the end
of the first quarter of 2000. However, we must obtain the approval of a variety
of state and federal regulatory agencies and, given the inherent uncertainties
of the regulatory process, the closing of the merger may be delayed.
Immediately after the merger, we will be a wholly-owned subsidiary of the
combined company.
Immediately after the merger, we will continue to be the sole obligor of our
debt securities. Our merger agreement with Bell Atlantic does not provide for,
or otherwise require, Bell Atlantic to assume or become a guarantor of any of
our debt securities, including the debt securities offered by this prospectus.
The Bell Atlantic financial information and the pro forma combined condensed
financial information included or incorporated by reference in our Joint Proxy
Statement and Prospectus with Bell Atlantic filed on April 14, 1999 and in our
subsequently filed reports, all of which are incorporated by reference in this
prospectus, are for informational purposes only.
The indenture for our debt securities contains no covenants or other
protections which would prevent us from transferring any of our assets,
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unless we were to transfer all or substantially all of our assets. While it is
possible that transfers of assets between GTE and Bell Atlantic or other
affiliated entities may take place after the merger, whether those transfers
will occur and the nature, timing and extent of those transfers cannot be
determined at this time.
RECENT DEVELOPMENTS
On September 1, 1999, we completed our previously announced sale of
substantially all of the GTE Government Systems business to General Dynamics
for $1.03 billion in cash.
On September 21, 1999, Bell Atlantic and Vodafone AirTouch Plc announced that
they had entered into a definitive agreement for the creation of a new wireless
business composed of the parties' United States wireless assets. The new
wireless business combines assets from Bell Atlantic Mobile, AirTouch Cellular,
PrimeCo Personal Communications and AirTouch Paging. Our United States wireless
assets will be contributed to the new wireless business after the merger
between us and Bell Atlantic is complete. After the merger, Bell Atlantic and
GTE combined will own 55% and Vodafone AirTouch will own 45% of the new
wireless business. We anticipate that after we complete our merger with Bell
Atlantic, we will own, directly or through our subsidiaries, an interest in the
new wireless business in consideration of the contribution of our wireless
assets to that business.
Including our United States wireless assets, the new business will serve
approximately 20 million wireless customers and 3.5 million paging customers
throughout the United States, making it by far the largest wireless business in
the country. After the addition of our properties, the new business will have a
footprint covering more than 90% of the United States population and will serve
49 of the top 50 United States wireless markets. The companies will explore
various options to address overlapping properties, which currently serve
approximately 3 million wireless customers. The transaction requires the
approval of the shareholders of Vodafone AirTouch, is subject to certain
regulatory approvals and includes our participation only upon the completion of
our merger with Bell Atlantic. The agreement between Bell Atlantic and Vodafone
AirTouch to create a new wireless business and the agreement between Bell
Atlantic and GTE to merge are independent transactions. The completion of one
is not contingent upon completion of the other.
On October 8, 1999, we completed our previously announced acquisition of
approximately half of the wireless properties operated by Ameritech Corporation
for approximately $3.25 billion in cash. These properties were included as a
part of our United States wireless assets in the September 21, 1999
announcement described above.
On October 19, 1999, we announced that we ended discussions with a previously
announced potential buyer of GTE Airfone, and that the Airfone in-flight
communications business would continue to operate as a unit of GTE. We also
stated that while there were no talks currently under way with other potential
buyers, we would continue to consider our future strategic options for the in-
flight communications business, including its sale.
USE OF PROCEEDS
We will use the net proceeds from the sale of the debt securities:
. to repay short-term borrowings, including short-term borrowings incurred to
acquire wireless properties operated by Ameritech;
. to invest in and advance to our subsidiaries to finance their operations; and
. for general corporate purposes.
At September 30, 1999, our short-term borrowings (not including current
maturities) were approximately $2,216,000,000 with an average annual interest
rate of 5.508%.
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CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges for the periods indicated
are as follows:
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Years Ended December 31,
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Nine Months Ended
September 30, 1999 1998 1997 1996 1995 1994
------------------ ---- ---- ---- ---- ----
5.22 3.49 3.98 4.27 4.00 4.18
</TABLE>
For these ratios, "earnings" have been calculated by adding income taxes and
fixed charges to income before extraordinary charges, and "fixed charges"
include interest expense, preferred stock dividends of subsidiaries, the
additional income requirement to cover preferred dividends of subsidiaries, and
the portion of rent expense representing interest. We added amounts applicable
to entities that are at least 50%-owned to both earnings and fixed charges, and
we deducted amounts applicable to minority interests from both earnings and
fixed charges.
Our ratio for the nine months ended September 30, 1999 includes special items
that resulted in a net pre-tax gain of $1,026,000,000 and our ratio for the
year ended December 31, 1998 includes a pre-tax special charge of $755,000,000.
Excluding those items and charge, these ratios would have been 4.32 and 3.96,
respectively. The 1999 special items related to gains associated with the sale
of substantially all of the GTE Government Systems business and the merger of
BC TELECOM Inc. and TELUS Corporation, partially offset by charges associated
with employee separation programs completed in early April 1999 and the
impairment of assets associated with new product development. The 1998 special
charge related to actions taken in 1998 to sell or exit various business
activities and reduce costs through employee reductions and related actions.
DESCRIPTION OF THE DEBT SECURITIES
General
We will issue the debt securities under an indenture between us and the
trustee, The Bank of New York, dated as of December 1, 1996, as supplemented
and amended. We have summarized selected provisions of the indenture below.
This is a summary and is not complete. It does not describe all exceptions and
qualifications contained in the indenture or the debt securities. You should
read the indenture and the form of the debt securities we filed as exhibits to
the registration statement for the debt securities for provisions that may be
important to you. In the summary below, we have included references to article
and section numbers of the indenture so that you can easily locate these
provisions.
The debt securities will be unsecured and will rank equally with all our senior
unsecured debt. The debt securities may be issued up to the principal amount
that may be authorized by us. The indenture does not limit the amount of debt
securities that may be issued and each series of debt securities may differ as
to its terms. (SECTION 2.01)
A board resolution or officers' certificate may designate the specific terms
relating to any new series of debt securities. (ARTICLE TWO) These terms will
be described in a prospectus supplement (and a pricing supplement, if any) and
will include the following:
. title of the series;
. total principal amount of the series;
. maturity date or dates;
. interest rate and interest payment dates;
. any redemption dates, prices, obligations and restrictions; and
. any other terms of the series.
Form and Exchange
The debt securities will normally be denominated in United States dollars in
which case we will pay principal, interest and any premium in United States
dollars. We may, however, denominate any series of debt securities in another
currency or composite currency. Payments of principal, interest and any premium
would then be in that currency or
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composite currency and not United States dollars. We will also normally issue
the debt securities in book-entry only form, which means that they will be
represented by one or more permanent global certificates registered in the name
of The Depository Trust Company, New York, New York, which we refer to as
"DTC," or its nominee. We will refer to this form here and in the prospectus
supplement as "book-entry only."
Alternatively, we may issue the debt securities in certificated form registered
in the name of the debt security holder. Under these circumstances, holders may
receive certificates representing the debt securities. Debt securities in
certificated form will be issued only in increments of $1,000 and will be
exchangeable without charge except for reimbursement of taxes, if any. We will
refer to this form in the prospectus supplement as "certificated." (ARTICLE
TWO)
Original Issue Discount
We may issue any series of debt securities as "original issue discount
securities." They will state on their face that they are original issue
discount securities. Generally, if this type of debt security is required to be
paid before its stated maturity date, less than the face amount will be paid to
you. The prospectus supplement or any pricing supplement will describe United
States Federal income tax considerations and other special considerations that
may apply to any original issue discount securities we issue.
Redemption Provisions, Sinking Fund and Defeasance
We may redeem some or all of the debt securities at our option subject to the
conditions stated in the prospectus supplement or any pricing supplement
relating to that series of debt securities. (ARTICLE THREE) If a series of debt
securities is subject to a sinking fund, the prospectus supplement or pricing
supplement will describe those terms.
The indenture permits us to discharge or "defease" certain of our obligations
on any series of debt securities at any time. We may defease by depositing with
the trustee sufficient cash or government securities to pay all sums due on the
debt securities of the series. (ARTICLE ELEVEN)
Book-Entry Procedures
The following discussion pertains to debt securities that are issued in book-
entry only form.
One or more global securities would be issued to DTC or its nominee. DTC would
keep a computerized record of its participants (for example, your broker) whose
clients have purchased the securities. The participant would then keep a record
of its clients who purchased the securities. A global security may not be
transferred, except that DTC, its nominees, and their successors may transfer a
global security as a whole to one another.
Under book-entry only, we will not issue certificates to individual holders of
the debt securities. Beneficial interests in global securities will be shown
on, and transfers of global securities will be made only through, records
maintained by DTC and its participants.
DTC has provided us with the following information: DTC is a limited-purpose
trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
United States Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under Section 17A of the Securities Exchange Act of 1934. DTC holds
securities that its participants deposit with DTC. DTC also facilitates the
settlement among direct participants of securities transactions, such as
transfers and pledges, in deposited securities through computerized records for
direct participant's accounts. This eliminates the need to exchange
certificates. Direct participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
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DTC's book-entry system is also used by other organizations such as securities
brokers and dealers, banks and trust companies that work through a direct
participant. The rules that apply to DTC and its participants are on file with
the SEC.
DTC is owned by a number of its direct participants and by the New York Stock
Exchange, Inc., The American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc.
We will wire principal and interest payments to DTC's nominee. We and the
trustee will treat DTC's nominee as the owner of the global securities for all
purposes. Accordingly, we and the trustee will have no direct responsibility or
liability to pay amounts due on the securities to owners of beneficial
interests in the global securities.
It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit direct participants' accounts on the payment date according
to their respective holdings of beneficial interests in the global securities
as shown on DTC's records. In addition, it is DTC's current practice to assign
any consenting or voting rights to direct participants whose accounts are
credited with securities on a record date, by using an omnibus proxy. Payments
by participants to owners of beneficial interests in the global securities, and
voting by participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with securities
held for the account of customers registered in "street name." However,
payments will be the responsibility of the participants and not of DTC, the
trustee, or us.
Debt securities represented by a global security would be exchangeable for debt
security certificates with the same terms in authorized denominations only if:
. DTC notifies us that it is unwilling or unable to continue as depository or
if DTC ceases to be a clearing agency registered under applicable law and a
successor depository is not appointed by us within 90 days; or
. we deliver to the trustee an order that the global security shall be
exchangeable.
The following Year 2000 disclosure has also been provided to us by DTC: DTC
management is aware that some computer applications, systems, and the like for
processing data that are dependent upon calendar dates, including dates before,
on, and after January 1, 2000, may encounter "Year 2000 problems." DTC has
informed its participants and other members of the financial community that it
has developed and is implementing a program so that its systems, as the same
relate to the timely payment of distributions (including principal and income
payments) to securityholders, book-entry deliveries, and settlement of trades
within DTC, continue to function appropriately. This program includes a
technical assessment and a remediation plan, each of which is complete.
Additionally, DTC's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent upon
other parties, including but not limited to issuers and their agents, as well
as third party vendors from whom DTC licenses software and hardware, and third
party vendors on whom DTC relies for information or the provision of services,
including telecommunication and electrical utility service providers, among
others. DTC has informed its participants and other members of the financial
community that it is contacting (and will continue to contact) third party
vendors from whom DTC acquires services to: (i) impress upon them the
importance of such services being Year 2000 compliant; and (ii) determine the
extent of their efforts for Year 2000 remediation (and, as appropriate,
testing) of their services. In addition, DTC is in the process of developing
such contingency plans as it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to its participants and other members of the financial community for
informational purposes only and is not intended to serve as a representation,
warranty, or contract modification of any kind.
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Restrictions
The debt securities will not be secured. However, if we at any time incur other
debt or obligations secured by a mortgage or pledge on any of our property, the
indenture requires us to secure the debt securities equally with the other debt
or obligations for as long as they remain secured. Exceptions to this
requirement include the following:
. purchase money mortgages or conditional sales agreements on property acquired
after December 1, 1996, or pre-existing mortgages;
. certain deposits or pledges to secure the performance of bids, tenders,
contracts or leases or in connection with worker's compensation and similar
matters;
. mechanics' and similar liens in the ordinary course of business; and
. when we own debt of our subsidiaries, we can permit other creditors of these
subsidiaries to be repaid before we are repaid. (SECTION 4.05)
We may issue or assume an unlimited amount of debt under the indenture. As a
result, the indenture does not prevent us from significantly increasing our
unsecured debt levels, which may negatively affect the resale value of the debt
securities. (SECTION 2.01)
Changes to the Indenture
The indenture may be changed with the consent of holders owning more than 50%
in principal amount of the outstanding debt securities of each series affected
by the change. However, we may not change your principal or interest payment
terms, or the percentage required to change other terms of the indenture,
without your consent, as well as the consent of others similarly affected.
(SECTION 9.02)
We may enter into supplemental indentures for other specified purposes
including the creation of any new series of debt securities, without the
consent of any holder of debt securities. (SECTIONS 2.01, 9.01 and 10.01)
Consolidation, Merger or Sale
We cannot merge with another company or sell or transfer all or substantially
all of our property to another company unless:
. we are the continuing corporation; or
. the successor corporation expressly assumes:
--payment of principal, interest and any premium on the debt securities; and
--performance and observance of all covenants and conditions in the
Indenture.
(SECTIONS 10.01 and 10.02)
Events of Default
"Event of default" means with respect to any series of debt securities any of
the following:
. failure to pay interest on that series of debt securities for 30 business
days after payment is due;
. failure to pay principal or any premium on that series of debt securities
when due;
. failure to perform any other covenant relating to that series of debt
securities for 90 days after we are given written notice; or
. certain events in bankruptcy, insolvency or reorganization.
An event of default for a particular series of debt securities does not
necessarily impact any other series of debt securities issued under the
Indenture. (SECTION 6.01)
If an event of default for any series of debt securities occurs and continues,
the trustee or the holders of at least 25% of the principal amount of the debt
securities of the series may declare the entire principal of all the debt
securities of that series (or for any original issue discount series, the
required amount which may be less than the principal) to be due and payable
immediately. If this happens, subject to certain conditions, the holders of a
majority of the principal amount of the debt securities of that series can
rescind the
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declaration if we have deposited with the trustee a sum sufficient to pay all
matured installments of interest, principal and any premium. (SECTION 6.01)
The holders of more than 50% of the principal amount of any series of the debt
securities may, on behalf of the holders of all the debt securities of that
series, control any proceedings resulting from an event of default or waive any
past default except a default in the payment of principal, interest or any
premium. (SECTION 6.06) We are required to file an annual certificate with the
trustee stating whether we are in compliance with all the conditions and
covenants under the indenture. (SECTION 5.03)
Concerning the Trustee
Within 90 days after a default occurs, the trustee must notify the holders of
the debt securities of the series of all defaults known to the trustee if we
have not remedied them (default is defined for this purpose to include the
events of default specified above absent any grace periods or notice). The
trustee may withhold notice to the holders of such debt securities of any
default (except in the payment of principal, interest or any premium) if it in
good faith considers such withholding in the interest of the holders. (SECTION
6.07)
Prior to an event of default, the trustee is required to perform only the
specific duties stated in the indenture and, after an event of default, must
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. (SECTION 7.01) The trustee is not required
to take any action permitted by the indenture at the request of any holders of
debt securities, unless such holders protect the trustee against costs,
expenses and liabilities. (SECTION 7.02) The trustee is not required to spend
its own funds or become financially liable when performing its duties if it
reasonably believes that it will not be adequately protected financially.
(SECTION 7.01)
We have a deposit account and a normal commercial banking relationship with the
trustee. The trustee also serves as trustee on other indentures under which we
have unsecured debt securities outstanding. If a default occurred on any debt
securities and/or any of those other outstanding unsecured debt securities, The
Bank of New York may be required to resign as trustee for the debt securities
within 90 days of default unless the default were cured, duly waived or
otherwise eliminated.
EXPERTS
The consolidated financial statements included in GTE Corporation's Annual
Report on Form 10-K for the year ended December 31, 1998, incorporated by
reference in this prospectus and elsewhere in the registration statement, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto dated January 28, 1999, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving said reports.
The consolidated financial statements and consolidated financial statement
schedule included in Bell Atlantic Corporation's Annual Report on Form 10-K for
the year ended December 31, 1998, incorporated in this prospectus and in the
registration statement by reference to the Joint Proxy Statement and Prospectus
of GTE and Bell Atlantic, have been so incorporated in reliance on the report
(which contains an explanatory paragraph stating that, in 1996, Bell Atlantic
changed its method of accounting for directory publishing revenues and
expenses) of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of such firm as experts in auditing and accounting.
LEGAL MATTERS
William P. Barr, Esq., our Executive Vice President-Government & Regulatory
Advocacy, General Counsel, or his successor, will issue an opinion about the
validity of the debt securities
9
<PAGE>
for us. Milbank, Tweed, Hadley & McCloy LLP of New York, New York will issue an
opinion for the agents or underwriters. As of October 5, 1999, Mr. Barr was the
beneficial owner of 278,664 shares of our common stock, including 269,200
shares which may be acquired within 60 days pursuant to the exercise of stock
options.
PLAN OF DISTRIBUTION
We may sell any series of debt securities:
. through underwriters or dealers;
. through agents; or
. directly to one or more purchasers.
A prospectus supplement or pricing supplement will include:
. the names of any underwriters, dealers or agents;
. the purchase price of the debt securities;
. our proceeds from such sale;
. any underwriting discounts or agency fees and other underwriters' or agents'
compensation; and
. any initial public offering price, any discounts or concessions allowed or
reallowed or paid to dealers.
If underwriters are used in the sale, they will buy the debt securities for
their own account. The underwriters may then resell the debt securities in one
or more transactions, at any time or times, at a fixed public offering price or
at varying prices.
We will only offer the debt securities in states where the offer is permitted
by law.
If there is a default by one or more of the underwriters affecting 10% or less
of the total principal amount of debt securities offered, the non-defaulting
underwriters must purchase the debt securities agreed to be purchased by the
defaulting underwriters. If the default affects more than 10% of the total
principal amount of the debt securities, we may, at our option, sell less than
all the debt securities offered.
Underwriters and agents that participate in the distribution of the debt
securities may be underwriters as defined in the Securities Act of 1933. Any
discounts or commissions that we pay them and any profit they receive from the
resale of the debt securities by them may be treated as underwriting discounts
and commissions under the Securities Act of 1933. We may have agreements with
underwriters, dealers and agents to indemnify them against certain civil
liabilities, including liabilities under the Securities Act of 1933, or to
contribute with respect to payments which they may be required to make.
Underwriters and agents may be our customers or may engage in transactions with
us or perform services for us in the ordinary course of business.
10
<PAGE>
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, other than
underwriting discounts and commissions.
<TABLE>
<S> <C>
1. Registration fee.......................................... $382,250.00
2. Trustee's fees and expenses............................... 5,000.00
3. Cost of printing.......................................... 35,000.00
4. Accounting fees........................................... 16,000.00
5. Legal Fees................................................ 10,000.00
6. Miscellaneous............................................. 4,250.00
-----------
Total...................................................... $452,500.00
===========
</TABLE>
Item. 15. Indemnification of Directors and Officers.
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. In addition, GTE's Certificate of Incorporation provides
that a director of GTE shall not be liable to GTE or its shareholders for
damages, except to the extent such exemption from liability is not permitted
under the New York Business Corporation Law as the same exists or may
hereafter be amended. 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 purpose 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 (the
"Exchange Act") 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") 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 (the "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 the 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.
II-1
<PAGE>
GTE hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (i) and (ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by GTE pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE>
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 Irving, and State of Texas, on the 4th day of
November, 1999.
GTE CORPORATION
(Registrant)
DANIEL P. O'BRIEN
-------------------------------------
Daniel P. O'Brien
Executive Vice President--
Finance and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
(1) Principal executive officer:
<TABLE>
<S> <C> <C>
CHARLES R. LEE Chairman of the November 4, 1999
- ------------------------------------- Board and Chief
(Charles R. Lee) Executive Officer
(2) Principal financial officer:
DANIEL P. O'BRIEN Executive Vice November 4, 1999
- ------------------------------------- President-- Finance
(Daniel P. O'Brien) and Chief Financial
Officer
(3) Principal accounting officer:
PAUL R. SHUELL Vice President and November 4, 1999
- ------------------------------------- Controller
(Paul R. Shuell)
(4) Directors:
EDWIN L. ARTZT Director November 4, 1999
- -------------------------------------
(Edwin L. Artzt)
JAMES R. BARKER Director November 4, 1999
- -------------------------------------
(James R. Barker)
EDWARD H. BUDD Director November 4, 1999
- -------------------------------------
(Edward H. Budd)
ROBERT F. DANIELL Director November 4, 1999
- -------------------------------------
(Robert F. Daniell)
KENT B. FOSTER Director November 4, 1999
- -------------------------------------
(Kent B. Foster)
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C> <C>
JAMES L. KETELSEN Director November 4, 1999
- ------------------------------------
(James L. Ketelsen)
CHARLES R. LEE Director November 4, 1999
- ------------------------------------
(Charles R. Lee)
MICHAEL T. MASIN Director November 4, 1999
- ------------------------------------
(Michael T. Masin)
SANDRA O. MOOSE Director November 4, 1999
- ------------------------------------
(Sandra O. Moose)
RUSSELL E. PALMER Director November 4, 1999
- ------------------------------------
(Russell E. Palmer)
JOHN W. SNOW Director November 4, 1999
- ------------------------------------
(John W. Snow)
ROBERT D. STOREY Director November 4, 1999
- ------------------------------------
(Robert D. Storey)
</TABLE>
II-4
<PAGE>
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 28, 1999, included in GTE Corporation's Annual Report on Form 10-K for
the year ended December 31, 1998, and to all references to our Firm included in
this registration statement.
ARTHUR ANDERSEN LLP
Dallas, Texas
November 4, 1999
II-5
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 9, 1999 relating to the
consolidated financial statements and consolidated financial statement
schedule of Bell Atlantic Corporation, which appears in Bell Atlantic
Corporation's Annual Report on Form 10-K for the year ended December 31, 1998.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
PRICEWATERHOUSECOOPERS LLP
November 4, 1999
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
1.1 Form of Purchase Agreement, including Standard Purchase Agreement
Provisions (November 1999 Edition).
4.1 Indenture dated as of December 1, 1996 between GTE Corporation and The
Bank of New York as Trustee (incorporated by reference from GTE
Corporation's Current Report on Form 8-K dated January 21, 1997).
4.2 Third Supplemental Indenture dated as of July 1, 1997 between GTE
Corporation and The Bank of New York as Trustee (incorporated by
reference from Exhibit 4.2 to GTE Corporation's Registration Statement
(File No. 333-31333) on Form S-3 dated July 15, 1997).
4.3 Form of Fixed Rate Debt Security (incorporated by reference from
Exhibit 4.3 to GTE Corporation's Registration Statement (File No. 333-
78563) on Form S-3 dated May 14, 1999).
4.4 Form of Floating Rate Debt Security (LIBOR) (incorporated by reference
from Exhibit 4.4 to GTE Corporation's Registration Statement (File No.
333-78563) on Form S-3 dated May 14, 1999).
4.5 Form of Floating Rate Debt Security (Prime Rate) (incorporated by
reference from Exhibit 4.5 to GTE Corporation's Registration Statement
(File No. 333-78563) on Form S-3 dated May 14, 1999).
5 Opinion of William P. Barr, Esq.
12 Consolidated Statement of Ratio of Earnings to Fixed Charges.
23.1 The consent of Arthur Andersen LLP is included on page II-5 of this
Registration Statement.
23.2 The consent of PricewaterhouseCoopers LLP is included in page II-6 of
this Registration Statement.
23.3 The consent of William P. Barr, Esq. (contained in opinion filed as
Exhibit 5).
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Bank of New York.
26 Form of Invitation For Bids.
</TABLE>
E-1
<PAGE>
EXHIBIT 1.1
GTE CORPORATION
PURCHASE AGREEMENT
GTE Corporation, a New York corporation ("GTE"), proposes to issue and sell
$ ,000,000 aggregate principal amount of its _________________ (the "New
Securities"). Subject to the terms and conditions set forth or incorporated by
reference herein, GTE agrees to sell, and the purchaser or purchasers named in
Schedule A attached hereto (the "Purchasers") severally agree to purchase, the
New Securities at ________% of their principal amount, plus accrued interest, if
any, from __________, ____ to the date of payment for the New Securities and
delivery thereof. Interest on the New Securities will be payable on ____________
and ____________, commencing ____________, ____. The New Securities will be
reoffered to the public at ______% of their principal amount.
All the provisions contained in GTE's Standard Purchase Agreement
Provisions (November 1999 Edition) (the "Standard Purchase Agreement
Provisions") annexed hereto shall be deemed to be a part of this Purchase
Agreement to the same extent as if such provisions had been set forth in full
herein.
REDEMPTION PROVISIONS:
[The New Securities will not be redeemable prior to maturity.]
OR
[The New Securities will not be redeemable prior to __________, ____.
Thereafter, the New Securities will be redeemable on not less than 30 nor more
than 60 days notice given as provided in the Indenture, as a whole or in part,
at the option of GTE, at the redemption price set forth below. The "initial
regular redemption price" will be the initial public offering price as defined
below plus the rate of interest on the New Securities. The redemption price
during the twelve month period beginning ______________ and during the twelve
month periods beginning on each ____________ thereafter through the twelve month
period ended ____________ will be determined by reducing the initial regular
redemption price by an amount determined by multiplying (a) 1/____ of the amount
by which such initial regular redemption price exceeds 100% by (b) the number of
such full twelve month periods which shall have elapsed between __________ and
the date fixed for redemption; and thereafter the redemption prices during the
twelve month periods beginning __________, shall be 100%; provided, however,
that all such prices will be specified to the nearest 0.01% or if there is no
nearest 0.01%, then to the next higher 0.01%.
For the purpose of determining the redemption prices of the New
Securities, the initial public offering price of the New Securities shall be the
price, expressed in percentage of principal amount (exclusive of accrued
interest), at which the New Securities are to be initially offered for sale to
the public; if there is not a public offering of the New Securities, the initial
public offering price of the New Securities shall be deemed to be the price,
expressed in percentage of principal amount (exclusive of accrued interest), to
be paid to GTE by the Purchasers.]
<PAGE>
OR
[The New Securities may be redeemed on not less than 30 nor more than 60
days notice given as provided in the Indenture, as a whole or from time to time
in part, at the option of GTE, at a redemption price equal to the greater of (i)
100% of the principal amount thereof and (ii) the sum of the present values of
the remaining scheduled payments of principal and interest thereon discounted to
the date of redemption on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus ___ basis points,
plus, in either case, accrued and unpaid interest on the principal amount being
redeemed to such redemption date.
"Treasury Rate" means, with respect to any redemption date, (i) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15(519)" or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Treasury Rate shall be interpolated or extrapolated from such
yields on a straight line basis, rounding to the nearest month) or (ii) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue, calculated using a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date. The Treasury Rate shall be calculated on the third
Business Day preceding the redemption date.
"Business Day" means any calendar day that is not a Saturday, Sunday or
legal holiday in New York, New York and on which commercial banks are open for
business in New York, New York.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term ("Remaining Life") of the New Securities to be redeemed that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such New Securities.
"Independent Investment Banker" means ___________________________ or, if
such firm is unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by the
Indenture Trustee.
"Comparable Treasury Price" means (i) the average of three Reference
Treasury Dealer Quotations for such redemption date, or (ii) if the Independent
Investment Banker is unable to obtain three such Reference Treasury Dealer
Quotations, the average of all such quotations obtained.
2
<PAGE>
"Reference Treasury Dealer" means (i) ___________________________,
_________________________ and ___________________________, and their respective
successors, provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in The City of New York (a "Primary
Treasury Dealer"), GTE shall substitute therefor another Primary Treasury Dealer
and (ii) any other Primary Treasury Dealer selected by the Independent
Investment Banker and approved in writing by GTE.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker at 3:30
p.m., New York City time, on the third Business Day preceding such redemption
date.]
SINKING FUND PROVISIONS:
(If Applicable)
CLOSING:
The Purchasers agree to pay for the New Securities, at the option of GTE,
by certified or official bank check or checks or by wire transfer, in each case
in same day funds upon delivery of such New Securities at 10:00 A.M. (New York
City time) on (the "Closing Date") or at such other time, not later than the
seventh full business day thereafter as shall be agreed upon by GTE and the
Purchasers or the firm or firms designated as the representative of the
Purchasers (the "Representative"). GTE shall advise the Representative not
later than the business day immediately preceding the Closing Date of its
decision whether to accept payment for the new Securities by certified bank
check or by wire transfer and, if GTE chooses to accept payment by wire
transfer, GTE shall provide the Representative on such date immediately
preceding the Closing Date with the appropriate wire transfer instruction. The
closing will be held at the offices of _______________ on the Closing Date.
DENOMINATION OF NEW SECURITIES:
[The New Securities shall be in the form of temporary or definitive fully-
registered New Securities in denominations of One Thousand Dollars ($1,000) or
any integral multiple thereof, registered in such names as the Purchasers or the
Representative shall request not less than two business days before the Closing
Date. GTE agrees to make the New Securities available to the Purchasers or the
Representative for inspection at the office of The Bank of New York, New York,
New York, at least twenty-four hours prior to the time fixed for the delivery of
the New Securities on the Closing Date.]
OR
[The New Securities shall be in the form of temporary or definitive fully-
registered New Securities denominated in such foreign currency or composite
3
<PAGE>
currency as shall be specified in the title thereof, and registered in such
names as the Purchasers or the Representative shall request not less than two
business days before the Closing Date. GTE agrees to make the New Securities
available to the Purchasers or the Representative for inspection at the office
of The Bank of New York, New York, New York, at least twenty-four hours prior to
the time fixed for the delivery of the New Securities on the Closing Date.]
OR
[The New Securities shall be in the form of one or more Global Securities
which shall represent, and shall be denominated in an amount equal to the
aggregate principal amount of, the New Securities and shall be registered in the
name of (name of depository) or its nominee. GTE agrees to make the New
Securities available to the Purchasers or the Representative for inspection at
the office of (name and address of depository), at least twenty-four hours prior
to the time fixed for the delivery of the New Securities on the Closing Date.]
RESALE:
[The Purchasers represent that they intend to resell the New Securities,
and therefore the provisions applicable to Reselling Purchasers in the Standard
Purchase Agreement Provisions will be applicable.]
OR
[The Purchasers represent that they do not intend to resell the New
Securities, and therefore the provisions applicable to Reselling Purchasers in
the Standard Purchase Agreement Provisions will not be applicable.]
In witness whereof, the parties have executed this Purchase Agreement this
____ day of __________, ____.
(Name of Purchasers or
Representative)
By:
----------------------------------------
Title:
GTE CORPORATION
By:
----------------------------------------
Title:
4
<PAGE>
SCHEDULE A
The names of the Purchasers and the principal amount of New Securities
which each respectively offers to purchase are as follows:
Principal Amount
Name of New Securities
- ---- -----------------------
-----------------------
Total $ ,000,000
=======================
5
<PAGE>
GTE CORPORATION
STANDARD PURCHASE AGREEMENT PROVISIONS
(November 1999 Edition)
<PAGE>
GTE Corporation, a New York corporation ("GTE"), may enter into one or more
purchase agreements providing for the sale of designated securities to the
purchaser or purchasers named therein (the "Purchasers"). The standard
provisions set forth herein will be incorporated by reference in any such
purchase agreement ("Purchase Agreement"). The Purchase Agreement, including
these Standard Purchase Agreement Provisions incorporated therein by reference,
is hereinafter referred to as "this Agreement." Unless otherwise defined
herein, terms used in this Agreement that are defined in the Purchase Agreement
have the meanings set forth therein.
I. SALE OF THE SECURITIES
GTE proposes to issue one or more series of securities (the "Securities")
pursuant to the provisions of an Indenture dated as of December 1, 1996 between
GTE and The Bank of New York, as Trustee, as amended and supplemented (the
"Indenture"). In a supplemental indenture to the Indenture, a resolution of the
Board of Directors of GTE or an officers' certificate pursuant to a supplemental
indenture or board resolution specifically authorizing each new series of
Securities, GTE will designate the title of each series, aggregate principal
amount, date or dates of maturity, dates for payment and rate of interest,
redemption dates, prices, obligations and restrictions, if any, and any other
terms with respect to each such series.
GTE has filed with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act of 1933, as amended (the "Act"),
registration statement No. 333-______ relating to $1,375,000,000 aggregate
initial offering price of GTE's securities registered thereunder (the amount
remaining unsold thereunder from time to time, the "Securities"), including a
prospectus which relates to the Securities, and has filed with, or transmitted
for filing to, the Commission (or will promptly after the sale so file or
transmit for filing) a prospectus supplement specifically relating to a
particular series of Securities (such particular series being hereinafter
referred to as the "New Securities") pursuant to Rule 424(b) under the Act
("Rule 424(b)"). The term "Registration Statement" means the registration
statement referred to herein as amended to the date of the Purchase Agreement.
The term "Basic Prospectus" means the prospectus relating to the Securities
included in the Registration Statement. The term "Prospectus" means the Basic
Prospectus together with the prospectus supplement specifically relating to the
New Securities, as filed with, or transmitted for filing to, the Commission
pursuant to Rule 424(b). As used herein, the terms "Registration Statement",
"Basic Prospectus", and "Prospectus" shall include in each case the material, if
any, incorporated by reference therein.
II. PURCHASER'S REPRESENTATIONS AND RESALE
Each Purchaser represents and warrants that information furnished in
writing to GTE expressly for use with respect to the New Securities will not
contain any untrue statement of a material fact and will not omit any material
fact in connection with such information necessary to make such information not
misleading.
<PAGE>
If the Purchasers advise GTE in the Purchase Agreement that they intend to
resell the New Securities, GTE will assist the Purchasers as hereinafter
provided. The terms of any such resale will be furnished to GTE in writing and
will be set forth in the Prospectus. The provisions of Paragraphs D and E of
Article VI and Articles VIII, IX and X of this Agreement apply only to
Purchasers that have advised GTE of their intention to resell the New Securities
("Reselling Purchasers"). All other provisions apply to any Purchaser including
a Reselling Purchaser.
III. CLOSING
Concurrent with the delivery of the New Securities to the Purchasers or to
the Representative for the account of each Purchaser, payment of the full
purchase price of the New Securities shall be made by the Purchasers or the
Representative, at the option of GTE, by certified or official bank check or
checks in same day funds, payable to GTE or its order, at The Bank of New York,
Attention: Corporate Trust Department, or by wire transfer in same day funds to
The Bank of New York for the account of GTE. Upon receipt of such check or wire
transfer by The Bank of New York, such check or wire transfer shall be deemed to
be delivered at the closing.
IV. CONDITIONS TO PURCHASERS' OBLIGATIONS
The respective obligations of the Purchasers hereunder are subject to the
following conditions:
(A) The Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; since the latest date as of which information is
given in the Registration Statement, there shall have been no material adverse
change in the business, business prospects, properties, financial condition or
results of operations of GTE; and the Purchasers or the Representative shall
have received on the Closing Date the customary form of compliance certificate
dated the Closing Date and signed by the Chairman, a Vice Chairman, the
President or a Vice President of GTE, including the foregoing. The officer
making such certificate may rely upon the best of his or her knowledge as to
proceedings pending or threatened.
(B) The Purchasers or the Representative shall have received on the Closing
Date an opinion of William P. Barr, Executive Vice President - Government &
Regulatory Advocacy, General Counsel of GTE, dated the Closing Date,
substantially in the form set forth in Exhibit A hereto.
(C) The Purchasers or the Representative shall have received on the Closing
Date an opinion of Milbank, Tweed, Hadley & McCloy LLP, counsel for the
Purchasers, dated the Closing Date, substantially in the form set forth in
Exhibit B hereto.
(D) The Purchasers or the Representative shall have received on the Closing
Date a letter from Arthur Andersen LLP, independent public accountants for GTE,
dated as of the Closing Date, to the effect set forth in Exhibit C hereto.
(E) The Purchasers or the Representative shall have received on the
Closing Date a letter from PricewaterhouseCoopers LLP, independent public
accountants for Bell Atlantic Corporation, dated as of the Closing Date, to the
effect set forth in Exhibit D hereto.
2
<PAGE>
V. CONDITIONS TO GTE'S OBLIGATIONS
The obligations of GTE hereunder are subject to the following conditions:
(A) The Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission.
(B) GTE shall have received on the Closing Date the full purchase price of
the New Securities purchased hereunder.
VI. COVENANTS OF GTE
In further consideration of the agreements contained herein of the
Purchasers, GTE covenants to the several Purchasers as follows:
(A) To furnish to the Purchasers a copy of the Registration Statement
including materials, if any, incorporated by reference therein and, during the
period mentioned in (C) below, to supply as many copies of the Prospectus, any
documents incorporated by reference therein and any supplements and amendments
thereto as the Purchasers or the Representative may reasonably request. The
terms "supplement" and "amendment" or "amend" as used in this Agreement shall
include all documents filed by GTE with the Commission subsequent to the
effective date of the Registration Statement, or the date of the Basic
Prospectus, as the case may be, pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), which are deemed to be incorporated by
reference therein.
(B) Before amending or supplementing the Registration Statement or the
Prospectus with respect to the New Securities, to furnish to any Purchaser or
the Representative, and to counsel for the Purchasers a copy of each such
proposed amendment or supplement.
The covenants in Paragraphs (C) and (D) apply only to Reselling Purchasers:
(C) If in the period after the first date of resale of the New Securities
during which, in the opinion of counsel for the Reselling Purchasers, the
Prospectus is required by law to be delivered, any event shall occur as a result
of which it is necessary to amend or supplement the Prospectus in order to make
a statement therein, in light of the circumstances when the Prospectus is
delivered to a subsequent purchaser, not materially misleading, or if it is
otherwise necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at its own expense (unless such amendment
shall relate to information furnished by the Purchasers or the Representative by
or on behalf of the Purchasers in writing expressly for use in the Prospectus),
to the Reselling Purchasers, the number of copies requested by the Reselling
Purchasers of either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in light of
the circumstances when the Prospectus is delivered to a subsequent purchaser, be
misleading or so that the Prospectus will comply with law.
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<PAGE>
(D) To use its best efforts to qualify the New Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Purchasers or the Representative shall reasonably request and to pay all
expenses (including fees and disbursements of counsel) in connection therewith;
provided, however, that GTE, in complying with the foregoing provisions of this
paragraph, shall not be required to qualify as a foreign company or to register
or qualify as a broker or dealer in securities in any jurisdiction or to consent
to service of process in any jurisdiction other than with respect to claims
arising out of the offering or sale of the New Securities; and provided,
further, that GTE shall not be required to continue the qualification of the New
Securities beyond one year from the date of the sale of the New Securities.
VII. REPRESENTATIONS AND WARRANTIES OF GTE
GTE represents and warrants to the several Purchasers that (i) each
document, if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Basic Prospectus or the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and the
rules and regulations thereunder, (ii) each part of the Registration Statement
filed with the Commission pursuant to the Act relating to the New Securities,
when such part became effective, did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (iii) on the effective
date of the Registration Statement, the date the Prospectus is filed pursuant to
Rule 424(b) and at all times subsequent to and including the Closing Date, the
Registration Statement and the Prospectus, as amended or supplemented, if
applicable, complied or will comply in all material respects with the Act and
the applicable rules and regulations thereunder, (iv) on the effective date of
the Registration Statement, the Registration Statement did not contain, and as
amended or supplemented, if applicable, will not contain, any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading, and on the date of the Prospectus, or any
amendment or supplement thereto, is filed pursuant to Rule 424(b) and on the
Closing Date, the Prospectus did not or will not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; except that these representations and warranties do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information furnished to GTE by any Purchaser or the Representative by or
on behalf of any Purchaser in writing expressly for use therein or to statements
or omissions in the Statement of Eligibility of the Trustee under the Indenture,
(v) there are no legal or government proceedings required to be described in the
Prospectus which are not described as required, (vi) the consummation of any
transaction herein contemplated will not result in a breach of any of the terms
of any agreement or instrument to which GTE is a party, or any statute or any
order, rule or regulation of any court or governmental agency or body by which
GTE is bound and (vii) the Indenture has been qualified under the Trust
Indenture Act of 1939, as amended.
VIII. INDEMNIFICATION
GTE agrees to indemnify and hold harmless each Reselling Purchaser and each
person, if any, who controls such Reselling Purchaser within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act, from and against
any and all losses, claims, damages and liabilities based upon any untrue
4
<PAGE>
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Basic Prospectus or the Prospectus (if used within
the period set forth in Paragraph (C) of Article VI hereof, and as amended or
supplemented if GTE shall have furnished any amendments or supplements thereto),
or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
based upon any such untrue statement or omission or alleged untrue statement or
omission based upon information furnished to GTE by any Reselling Purchaser or
the Representative on behalf of any Reselling Purchaser in writing expressly for
use therein or by any statement or omission in the Statement of Eligibility of
the Trustee under the Indenture. The foregoing agreement, insofar as it relates
to the Prospectus, shall not inure to the benefit of any Reselling Purchaser (or
to the benefit of any person controlling such Reselling Purchaser) on account of
any losses, claims, damages or liabilities arising from the sale of any New
Securities by said Reselling Purchaser to any person if a copy of the Prospectus
(as supplemented or amended, if prior to distribution of the Prospectus to the
Reselling Purchaser GTE shall have made any supplements or amendments which have
been furnished to said Reselling Purchaser) shall not have been sent or given by
or on behalf of such Purchaser to such person at or prior to the written
confirmation of the sale of the New Securities to such person and such statement
or omission is cured in the Prospectus.
Each Reselling Purchaser agrees to indemnify and hold harmless GTE, its
directors, its officers who sign the Registration Statement and any person
controlling GTE to the same extent as the foregoing indemnity from GTE to each
Reselling Purchaser, but only with reference to information relating to said
Reselling Purchaser furnished in writing by or on behalf of said Reselling
Purchaser expressly for use in the Registration Statement or the Prospectus.
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person or persons against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
(provided, however, that if such indemnified party shall object to the selection
of counsel after having been advised by such counsel that there may be one or
more legal defenses available to the indemnified party which are different from
or additional to those available to the indemnifying party, the indemnifying
party shall designate other counsel reasonably satisfactory to the indemnified
party) and the indemnifying party shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
5
<PAGE>
If the indemnification provided for in this Article VIII is unavailable to
an indemnified party under the first or second paragraph hereof or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by GTE on the one hand
and the Reselling Purchasers on the other from the offering of the New
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of GTE on the one hand and of the Reselling Purchasers on the other in
connection with the statement or omission that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by GTE on the one hand and the Reselling
Purchasers on the other in connection with the offering of the New Securities
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the New Securities received by GTE bear to the total commissions, if
any, received by all of the Reselling Purchasers in respect thereof. If there
are no commissions allowed or paid by GTE to the Reselling Purchasers in respect
of the New Securities, the relative benefits received by the Reselling
Purchasers in the preceding sentence shall be the difference between the price
received by such Reselling Purchasers upon resale of the New Securities and the
price paid for the New Securities pursuant to the Purchase Agreement. The
relative fault of GTE on the one hand and of the Reselling Purchasers on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by GTE or by
the Reselling Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
IX. SURVIVAL
The indemnity and contribution agreements contained in Article VIII and the
representations and warranties of GTE contained in Article VII of this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by any Reselling
Purchaser or on behalf of any Reselling Purchaser or any person controlling any
Reselling Purchaser and (iii) acceptance of and payment for any of the New
Securities.
6
<PAGE>
X. TERMINATION BY RESELLING PURCHASERS
At any time prior to the Closing Date, this Agreement shall be subject to
termination in the absolute discretion of any Reselling Purchaser, by notice
given to GTE, if (i) trading in securities generally on the New York Stock
Exchange shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities, (iii) minimum prices shall have
been established on the New York Stock Exchange by Federal or New York State
authorities or (iv) any outbreak or material escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred, the effect of
which is such as to make it impracticable or inadvisable to proceed with the
delivery of the New Securities on the terms and in the manner contemplated by
the Prospectus.
XI. TERMINATION BY PURCHASERS
If this Agreement shall be terminated by the Purchasers because of any
failure or refusal on the part of GTE to comply with the terms or to fulfill
any of the conditions of this Agreement, or if for any reason (other than
those set forth in Article V) GTE shall be unable to perform its obligations
under this Agreement, GTE will reimburse the Purchasers for all out-of- pocket
expenses (including the fees and disbursements of counsel) reasonably incurred
by such Purchasers in connection with the New Securities. Except as provided
herein, the Purchasers shall bear all of their expenses, including the fees and
disbursements of counsel.
XII. SUBSTITUTION OF PURCHASERS
If for any reason any Purchaser shall not purchase the New Securities it
has agreed to purchase hereunder, the remaining Purchasers shall have the right
within 24 hours to make arrangements satisfactory to GTE for the purchase of
such New Securities hereunder. If they fail to do so, the amounts of New
Securities that the remaining Purchasers are obligated, severally, to purchase
under this Agreement shall be increased in the proportions which the total
amount of New Securities which they have respectively agreed to purchase bears
to the total amount of New Securities which all non-defaulting Purchasers have
so agreed to purchase, or in such other proportions as the Purchasers may
specify to absorb such unpurchased New Securities, provided that such aggregate
increases shall not exceed 10% of the total amount of the New Securities set
forth in Schedule A to the Purchase Agreement. If any unpurchased New
Securities still remain, GTE shall have the right either to elect to consummate
the sale except as to any such unpurchased New Securities so remaining or,
within the next succeeding 24 hours, to make arrangements satisfactory to the
remaining Purchasers for the purchase of such New Securities. In any such
cases, either the Purchasers or the Representative or GTE shall have the right
to postpone the Closing Date for not more than seven business days to a mutually
acceptable date. If GTE shall not elect to so consummate the sale and any
unpurchased New Securities remain for which no satisfactory substitute Purchaser
is obtained in accordance with the above provisions, then this Agreement shall
terminate without liability on the part of any non-defaulting Purchaser or GTE
for the purchase or sale of any New Securities under this Agreement. No
7
<PAGE>
provision in this paragraph shall relieve any defaulting Purchaser of liability
to GTE for damages occasioned by such default.
XIII. MISCELLANEOUS
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
This Agreement shall be governed by and construed in accordance with the
substantive laws of the State of New York.
8
<PAGE>
Exhibit A
William P. Barr
Executive Vice President -
Government & Regulatory Advocacy,
General Counsel
GTE Corporation
1850 M Street, NW
Suite 1200
Washington, D.C. 20036
__________, 199_
and the other several Purchasers
listed in the Purchase Agreement
dated ________, 199_ among such
Purchasers and GTE Corporation
RE: GTE CORPORATION
$_____________
Dear Sirs:
I have been requested by GTE Corporation, a New York corporation (the
"Corporation"), as its Executive Vice President - Government & Regulatory
Advocacy, General Counsel to furnish you with my opinion pursuant to a Purchase
Agreement dated ______, 199_ (the "Agreement") between you and the Corporation,
relating to the purchase and sale of $___,000,000 aggregate principal amount of
its ___________ (the "New Securities").
In this connection I, or attorneys under my direction, have examined among
other things:
(a) The Certificate of Incorporation of the Corporation, as amended, and
the by-laws, each as presently in effect;
(b) A copy of the Indenture dated as of December 1, 1996, as supplemented
and amended (the "Indenture"), between the Corporation and The Bank of New York,
as Trustee (the "Trustee"), and the resolutions of the Board of Directors of the
Corporation under which the New Securities are being issued;
(c) [The Supplemental Indenture, dated as of _______, 199_ (the
"Supplemental Indenture") between the Corporation and the Trustee] [The
resolutions of the Board of Directors adopted ________, 199_ (the "Board
Resolution")] [The certificate, dated ________, 199_, of an authorized officer
of the Corporation pursuant to authorization from the Board of Directors of the
Corporation (the "Officer's Certificate")] specifically authorizing the New
Securities, including the issuance and sale of the New Securities;
(d) The form of the New Securities set forth in the [Supplemental
Indenture] [Board Resolution] [Officer's Certificate];
(e) The records of the corporate proceedings of the Corporation relating to
the authorization, execution and delivery of the Indenture and the [Supplemental
Indenture] [Board Resolution] [Officer's Certificate];
A-1
<PAGE>
(f) The records of the corporate proceedings of the Corporation relating to
the authorization, execution and delivery of the Agreement;
(g) The record of all proceedings taken by the Corporation relating to the
registration of the New Securities under the Securities Act of 1933, as amended
(the "Act"), and qualification of the Indenture under the Trust Indenture Act of
1939, as amended (the "TIA"), particularly Registration Statement No. 333-
__________, including the form of prospectus contained therein (unless the
context shall otherwise require, such Registration Statement, as amended, is
hereinafter called the "Registration Statement" and the prospectus dated
_________, together with the prospectus supplement dated __________ relating to
the New Securities in the form filed under Rule 424(b) of the Act, is
hereinafter called the "Prospectus"); and
(h) The Registration Statement, the Prospectus and all documents filed by
the Corporation under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which are incorporated by reference in the Prospectus (the
"Incorporated Documents").
On the basis of my examination of the foregoing and of such other documents
and matters as I have deemed necessary as the basis for the opinions hereinafter
expressed, I am of the opinion that:
1. The Corporation is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of New York, is a duly licensed
and qualified foreign corporation in good standing under the laws of the State
of Texas, and has adequate corporate power to carry on the business in
which it is now engaged.
2. All legal proceedings necessary to the authorization, issue and sale of
the New Securities to you have been taken by the Corporation.
3. The Agreement has been duly and validly authorized, executed and
delivered by the Corporation.
4. The Indenture has been duly authorized by the Corporation and has
been duly executed and delivered by or on behalf of the Corporation. The
Indenture, as supplemented, constitutes a legal, valid and binding agreement of
the Corporation enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency and other laws affecting the enforcement of creditors'
rights and the availability of equitable remedies. The Indenture has been duly
qualified under the TIA.
5. The New Securities conform as to legal matters with the statements
concerning them in the Registration Statement and Prospectus and have been duly
authorized and executed by the Corporation and (assuming due authentication and
delivery thereof by the Trustee) have been duly issued under the Indenture, as
supplemented, and (subject to the qualifications set forth in paragraph 4 above)
constitute legal, valid and binding obligations of the Corporation enforceable
in accordance with their terms and are entitled to the benefits afforded by the
Indenture, as supplemented.
6. Except as may be required by the securities or Blue Sky laws of certain
jurisdictions, no authorization, approval or consent of any governmental
A-2
<PAGE>
regulatory authority is required for the issuance and sale of the New
Securities.
7. The Registration Statement became effective on _________ , and, to the
best of my knowledge, no proceedings under Section 8 of the Act looking toward
the possible issuance of a stop order with respect thereto are pending or
threatened and the Registration Statement remains in effect on the date hereof.
The Registration Statement and the Prospectus comply as to form in all material
respects with the relevant provisions of the Act and of the Exchange Act as to
documents incorporated by reference into said Registration Statement and the
applicable rules and regulations of the Securities and Exchange Commission
thereunder, except that I express no opinion as to the financial statements or
other financial data contained therein. The Prospectus is lawful for use for the
purposes specified in the Act in connection with the offer for sale and sale of
the New Securities in the manner specified therein. I have no reason to believe
that the Registration Statement or the Incorporated Documents, considered as a
whole on the effective date of the Registration Statement, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus and the Incorporated documents, considered as
a whole on the date hereof, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that in each case I express no opinion as to the financial statements or
other financial data contained therein.
Without my prior written consent, this opinion may not be relied upon by
any person or entity other than the addressee, quoted in whole or in part, or
otherwise referred to in any report or document, or furnished to any other
person or entity, except that Milbank, Tweed, Hadley & McCloy LLP may rely upon
this opinion as if this opinion were separately addressed to them.
Very truly yours,
WILLIAM P. BARR
cc: Milbank, Tweed, Hadley & McCloy LLP
A-3
<PAGE>
Exhibit B
MILBANK, TWEED, HADLEY & McCLOY LLP
1 Chase Manhattan Plaza
New York, New York 10005
__________, 199_
GTE CORPORATION
$__________
and the other several Purchasers
listed in the Purchase Agreement
dated ________, 199_ among such
Purchasers and GTE Corporation
Dear Sirs:
We have been designated by GTE Corporation (the "Corporation") as counsel
for the purchasers of $___,000,000 aggregate principal amount of its _________
(the "New Securities"). Pursuant to such designation and the terms of a
Purchase Agreement dated ________, 199_, relating to the New Securities (the
"Purchase Agreement"), entered into by you with the Corporation, we have acted
as your counsel in connection with your several purchases this day from the
Corporation of the New Securities, which are issued under an Indenture dated as
of December 1, 1996 between the Corporation and The Bank of New York, as trustee
(the "Trustee"), as amended and supplemented (collectively, the "Indenture").
We have reviewed originals, or copies certified to our satisfaction, of
such corporate records of the Corporation, indentures, agreements and other
instruments, certificates of public officials and of officers and
representatives of the Corporation, and other documents, as we have deemed
necessary as a basis for the opinions hereinafter expressed. In such examination
we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity with the original
documents of all documents submitted to us as copies and the authenticity of the
originals of such latter documents. As to various questions of fact material to
such opinions, we have, when relevant facts were not independently established,
relied upon certifications by officers of the Corporation and other appropriate
persons and statements contained in the Registration Statement hereinafter
mentioned.
In addition, we attended the closing held today at the offices of
___________ at which the Corporation caused the New Securities to be delivered
to your representatives at The Depository Trust Company, 55 Water Street, New
York, New York, for your several accounts against payment therefor.
On the basis of the foregoing and having regard to legal considerations
which we deem relevant, we are of the opinion that:
B-1
<PAGE>
1. The Corporation is a validly existing corporation, in good standing,
under the laws of the State of New York.
2. The Purchase Agreement has been duly authorized, executed and delivered
by the Corporation.
3. The Indenture has been duly authorized, executed and delivered by the
Corporation and constitutes a legal, valid and binding agreement of the
Corporation, enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
applicability affecting the enforceability of creditors' rights. The
enforceability of the Indenture is subject to the effect of general principles
of equity (regardless of whether considered in a proceeding in equity or at
law), including without limitation (i) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (ii) concepts
of materiality, reasonableness, good faith and fair dealing. The Indenture has
been duly qualified under the Trust Indenture Act of 1939, as amended.
4. The New Securities have been duly authorized and conform as to legal
matters in all substantial respects to the description thereof contained in the
Registration Statement and Prospectus hereinafter mentioned. The New Securities,
assuming due execution thereof by the Corporation and due authentication and
delivery by the Trustee, have been duly issued for value by the Corporation and
(subject to the qualifications stated in paragraph 3 above) constitute legal,
valid and binding obligations of the Corporation, enforceable in accordance with
their terms and are entitled to the benefits afforded by the Indenture in
accordance with the terms of the Indenture and of the New Securities.
5. Except as may be required by Securities or blue sky laws of certain
jurisdictions, no authorization, approval or consent of any governmental
regulatory authority is required for the issuance and sale of the New
Securities.
6. On the basis of information received by the Corporation from the
Securities and Exchange Commission (the "Commission"), Registration Statement
No. 333-__________ with respect to the Securities (the "Registration
Statement"), filed with the Commission pursuant to the Securities Act of 1933,
as amended (the "Act"), became effective under the Act on __________, 1999, and
the Prospectus dated ________, 199_ as supplemented by the Prospectus Supplement
dated _________, 199_ (collectively, the "Prospectus") became lawful for use for
the purposes specified in the Act, in connection with the offer for sale and
sale of the New Securities in the manner therein specified, subject to
compliance with the provisions of securities or blue sky laws of certain
jurisdictions in connection with the offer for sale or sale of the New
Securities in such jurisdictions. To the best of our knowledge, the Registration
Statement remains in effect at this date.
7. The Registration Statement, as of its effective date, and the
Prospectus, as of the date hereof, together with the documents incorporated by
reference (the "Incorporated Documents") (except any financial statements or
other financial data contained or incorporated by reference in the Registration
Statement, the Prospectus or such Incorporated Documents, as to which no opinion
is expressed) appear on their face to be appropriately responsive, in all
material respects relevant to the offering of the New Securities, to the
requirements of the Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as applicable and the applicable, rules and regulations of the
Commission thereunder.
B-2
<PAGE>
The Registration Statement was filed on Form S-3 under the Act and,
accordingly, the Prospectus does not necessarily contain a current description
of the Corporation's business and affairs since Form S-3 provides for the
incorporation by reference of certain documents filed with the Commission which
contain descriptions as of various dates. We participated in conferences with
counsel for, and representatives of, the Corporation in connection with the
preparation of the Registration Statement and Prospectus and we have reviewed
the Incorporated Documents. In connection with our participation in the
preparation of the Registration Statement and the Prospectus, we have not
independently verified the accuracy, completeness or fairness of the statements
contained therein or in the Incorporated Documents, and the limitations inherent
in the review made by us and the knowledge available to us are such that we are
unable to assume, and we do not assume, any responsibility for the accuracy,
completeness, or fairness of the statements contained in the Registration
Statement, the Prospectus or the Incorporated Documents, except as otherwise
specifically stated herein. None of the foregoing disclosed to us any
information which gave us reason to believe that the Registration Statement, the
Prospectus or the Incorporated Documents, considered as a whole on the effective
date of the Registration Statement contained any untrue statement of a material
fact or omitted or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading or that the
Prospectus and the Incorporated Documents, considered as a whole on the date
hereof, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. We express no
opinion as to any document filed by the Corporation under the Exchange Act,
whether prior or subsequent to such effective date, except to the extent that
such documents are Incorporated Documents read together with the Registration
Statement or the Prospectus and considered as a whole, nor do we express any
opinion as to the financial statements or other financial data included in or
omitted from, or incorporated by reference in, the Registration Statement, the
Prospectus or the Incorporated Documents.
We are members of the New York bar only and, except as set forth in the
next paragraph, express no opinion as to matters governed by any laws other than
the laws of New York and the Federal laws of the United States of America, and
the extent that the foregoing opinions involve the laws of the State of Texas,
in reliance upon the opinion of even date herewith of William P. Barr, Esq.,
Executive Vice President - Government & Regulatory Advocacy, General Counsel of
the Corporation, furnished pursuant to the Purchase Agreement, the laws of the
State of Texas.
B-3
<PAGE>
The opinions contained herein are rendered to you and are solely for your
benefit and the benefit of the Purchasers represented by you in connection with
the transaction contemplated by the Purchase Agreement. These opinions may not
be relied upon by you for any other purpose, or furnished to, quoted or relied
upon by any other person, firm or corporation for any purpose, without our prior
written consent.
Very truly yours,
MILBANK, TWEED, HADLEY & McCLOY LLP
B-4
<PAGE>
Exhibit C
LETTER OF ARTHUR ANDERSEN LLP
The letter of independent public accountants for GTE to be delivered
pursuant to Article IV, paragraph (D) of the document entitled Standard Purchase
Agreement Provisions (November 1999 Edition) shall be to the effect that:
At the closing, the Purchaser(s) shall have received such number of copies
as are necessary to provide one for each Purchaser of a letter addressed to GTE
and the Purchaser(s), dated as of the Closing Date and encompassing the
performance of certain procedures described in the letter as of a date not more
than five business days prior to the Closing Date, (the "Cutoff Date") from
Arthur Andersen LLP confirming that they are independent public accountants with
respect to GTE within the meaning of the Act and the applicable rules and
regulations of the Commission thereunder and stating in effect (1) that in their
opinion, the financial statements and schedules audited by them and incorporated
by reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act, and the
Securities Exchange Act of 1934, and the related rules and regulations adopted
by the SEC, (2) that although they have not audited any financial statements of
GTE as of any date or for any period subsequent to the prior-year audit, and
although they have conducted an audit for that period, the purpose (and
therefore the scope) of the audit was to enable them to express their opinion on
the financial statements as of that date and for the year then ended, but not on
the financial statements for any interim period within that year; therefore,
they are unable to and do not express any opinion on the unaudited condensed
balance sheet as of the latest available interim date, and the unaudited
condensed statements of income and cash flows for the latest available interim
period subsequent to that prior-year audit which are included in GTE's quarterly
report on Form 10-Q for the latest available interim period subsequent to that
prior-year audit, incorporated by reference in the Registration Statement or on
the financial position, results of operations or cash flows of any date or any
period subsequent to that prior-year audit, and (3) they have read the minutes
for the interim period through the Cutoff Date and performed the procedures
specified by the American Institute of Certified Public Accountants for a review
of interim financial information as described in SAS No. 71, Interim Financial
Information, and on the latest available unaudited interim financial statements
prepared by GTE, inquired of certain officials of GTE responsible for financial
and accounting matters, nothing has come to their attention which caused them to
believe that: (a) any unaudited interim condensed consolidated financial
statements incorporated by reference in the Registration Statement (i) do not
comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act as it applies to Form 10-Q and the related
published rules and regulations adopted by the SEC or (ii) have not been
presented in conformity with generally accepted accounting principles applied on
a basis substantially consistent with that of the audited financial statements
incorporated by reference in the Registration Statement; or (b) (i) as of the
date of the latest available unaudited interim financial data of GTE and the
latest available unaudited condensed summary of consolidated results of
operations prepared by GTE, there have been any changes in the capital stock, or
any increases in the short-term indebtedness or long-term debt of GTE or any
decreases in net assets, in each case as compared with amounts shown on the
latest balance sheet included or incorporated by reference in the Registration
Statement, or any decreases, as compared with the corresponding period of the
prior year, in consolidated revenues and sales, net income from continuing
operations, or net income from continuing operations applicable to common stock
C-1
<PAGE>
and per share of common stock, or (ii) for the period from the date of
the latest financial statements included or incorporated by reference in the
Registration Statement to the specified date referred to in the preceding
clause (i), there were any decreases in operating revenues, net operating
income, net income or GTE's ratio of earnings to fixed charges, in each case as
compared with the comparable period of the preceding year, (iii) as of the
Cutoff Date, there have been any changes in the capital stock or any increase
in the debt of GTE, or any decreases in net assets, in each case as compared
with amounts shown in the latest balance sheet included or incorporated by
reference in the Prospectus, and (iv) for the period from the date of the
latest available unaudited interim financial statements referred to in clause
(b)(i) above to the Cutoff Date, there were any decreases in operating
revenues, net operating income or net income, in each case as compared with the
comparable period of the preceding year, except in all instances for changes or
decreases which the Registration Statement discloses have occurred or may occur
or as disclosed in such letter and except for changes occasioned by the
declaration and payment of dividends on the stock of GTE or occasioned by
sinking fund payments made on the debt securities of GTE, or by the issuance of
common stock of GTE in connection with any employee benefit plan or dividend
reinvestment plan of GTE or for the conversion of convertible preferred stock;
and they have compared the amounts in the Historical GTE columns of the
December 31, 1998 pro forma combined condensed balance sheet and the pro forma
combined condensed statements of income for each of the three years in the
period ended December 31, 1998, which are included in the Joint Proxy Statement
and Prospectus of GTE and Bell Atlantic Corporation that is incorporated by
reference in this Registration Statement, to the GTE's December 31, 1998
Consolidated Balance Sheet and the GTE's Consolidated Statements of Income
for each of the three years in the period ended December 31, 1998, included in
the GTE's December 31, 1998 Annual Report on Form 10-K, to the extent such
amounts are included in or can be derived from such statements, and found them
(as adjusted for roundings, where applicable) to be in agreement.
C-2
<PAGE>
Exhibit D
LETTER OF PRICEWATERHOUSECOOPERS LLP
The letter of independent certified public accountants for Bell Atlantic
Corporation and its subsidiaries ("Bell Atlantic") to be delivered pursuant to
Article IV, paragraph (E) of the document entitled Standard Purchase Agreement
Provisions (November 1999 Edition) shall be to the effect that:
At the closing, the Purchaser(s) shall have received such number of copies as
are necessary to provide one for each Purchaser of a letter addressed to
Bell Atlantic and the Purchaser(s), dated as of the Closing Date
and encompassing the performance of certain procedures described in the letter
as of a date not more than five business days prior to the Closing Date (the
"Cutoff Date") from PricewaterhouseCoopers LLP confirming that they are
independent certified public accountants with respect to Bell Atlantic within
the meaning of the Act and the applicable published rules and regulations
thereunder adopted by the Commission and stating in effect: (1) that in their
opinion, the consolidated financial statements and financial statement schedule
of Bell Atlantic audited by them and incorporated by reference in the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related rules and regulations adopted by the SEC, (2) that although they have
not audited any financial statements of Bell Atlantic as of any date or for any
period subsequent to December 31, 1998, they have conducted an audit for the
year ended December 31, 1998, the purpose (and therefore the scope) of such
audit was to enable them to express their opinion on the consolidated financial
statements as of December 31, 1998 and for the year then ended, but not on the
condensed consolidated financial statements for any interim period within such
year; therefore, they are unable to and do not express any opinion on the
unaudited condensed consolidated balance sheet as of the latest available
interim date and the unaudited condensed consolidated statements of income, cash
flows and changes in shareowners' investment for the periods included in Bell
Atlantic's most recent quarterly report on Form 10-Q or on the financial
position, results of operations or cash flows as of any date or for any period
subsequent to December 31, 1998; (3) they have read the minutes of the 1999
meetings of the Board of Directors and Audit Committee of Bell Atlantic as set
forth in the minute books through the Cutoff Date and performed the procedures
described in SAS No. 71, Interim Financial Information on the latest available
D-1
<PAGE>
unaudited interim financial statements incorporated by reference in the
Registration Statement, and inquired of certain officials of Bell Atlantic
responsible for financial and accounting matters, and on the basis of such
procedures nothing has come to their attention which caused them to believe that
(a) any unaudited interim condensed consolidated financial statements
do not comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act as it applies to Form 10-Q and the related
published rules and regulations adopted by the SEC or (b) any material
modifications should be made to such unaudited interim condensed consolidated
financial statements for them to be in conformity with generally accepted
accounting principles; (4) read the items identified by the Purchasers included
or incorporated by reference in the Registration Statement and recomputed or
compared amounts and found them to be in agreement; and (5) read the unaudited
pro forma combined condensed balance sheet and the unaudited pro forma combined
condensed statements of income as of and for the periods incorporated by
reference in the Registration Statement, inquired of certain officials of Bell
Atlantic who have responsibility for financial and accounting matters about (i)
the basis for the determination of the pro forma adjustments, and (ii) whether
the unaudited pro forma combined condensed financial statements referred to in
above comply as to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X, and proved the arithmetic accuracy
of the application of the pro forma adjustments to the historical amounts in the
unaudited pro forma combined condensed financial statements, and on the basis of
such procedures nothing has come to their attention which caused them to believe
that such unaudited pro forma combined condensed financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma adjustments
have not been properly applied to the historical amounts in the compilation of
those statements.
D-2
<PAGE>
EXHIBIT 5
William P. Barr
Executive Vice President -
Government & Regulatory Advocacy,
General Counsel
GTE Corporation
1850 M Street, NW
Suite 1200
Washington, D.C. 20036
November 4, 1999
GTE Corporation
1255 Corporate Drive
Irving, Texas 75038
Gentlemen:
I have examined the Registration Statement of GTE Corporation (the
"Corporation") on Form S-3 under the Securities Act of 1933, as amended, and
accompanying Prospectus (the "Prospectus") pertaining to the issuance and sale
of $1,375,000,000 aggregate offering price of Debt Securities (the
"Securities"). I have also examined the Corporation's Restated Certificate of
Incorporation, as amended, and such corporate records and other documents as I
have deemed necessary to enable me to express the opinion set forth below.
In my opinion, when the Registration Statement shall have become effective,
subject to any applicable regulatory approvals, the Securities, upon their
issuance and sale in the manner contemplated in the Registration Statement and
the Indenture referenced in the Prospectus, will be legally and validly issued,
and will be binding obligations of the Corporation except to the extent that
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws or equitable principles relating to or limiting
creditors' rights generally.
I hereby consent to the reference made to me under the caption "Legal Matters"
in the Prospectus and to the filing of this consent as an exhibit to the
Registration Statement.
Very truly yours,
WILLIAM P. BARR
- ---------------
William P. Barr
<PAGE>
EXHIBIT 12
GTE CORPORATION AND SUBSIDIARIES
Statements of the Consolidated Ratio of Earnings to Fixed Charges
(Unaudited)
<TABLE>
<CAPTION>
Years Ended December 31,
Nine Months Ended ----------------------------------------------
September 30, 1999 1998 1997 1996 1995 1994
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
(Dollars in Millions)
Net Earnings available for fixed charges:
Income before extraordinary charges $3,056 $2,492 $2,794 $2,798 $2,538 $2,441
Add (deduct):
-Income taxes 1,753 1,553 1,624 1,614 1,466 1,532
-Interest expense 992 1,397 1,283 1,146 1,151 1,139
-Capitalized interest (net of amortization) (8) (7) (13) (35) (23) (6)
-Preferred stock dividends of Parent - - - - 6 10
-Dividends on preferred securities of subsidiaries 72 98 101 106 98 18
-Additional income requirement on preferred dividends of 2 5 7 10 10 12
subsidiaries
-Minority interests 26 199 155 149 145 140
-Portion of rent expense representing interest 99 155 133 131 128 140
------ ------ ------ ------ ------ ------
5,992 5,892 6,084 5,919 5,519 5,426
Deduct - Minority interests (37) (329) (280) (263) (246) (243)
------ ------ ------ ------ ------ ------
Adjusted earnings $5,955 $5,563 $5,804 $5,656 $5,273 $5,183
====== ====== ====== ====== ====== ======
Fixed charges:
Interest expense $ 992 $1,397 $1,283 $1,146 $1,151 $1,139
Dividends on preferred securities of subsidiaries 72 98 101 106 98 18
Additional income requirement on preferred dividends of 2 5 7 10 10 12
subsidiaries
Portion of rent expense representing interest 99 155 133 131 128 140
------ ------ ------ ------ ------ ------
1,165 1,655 1,524 1,393 1,387 1,309
Deduct - Minority interests (25) (60) (66) (68) (70) (68)
------ ------ ------ ------ ------ ------
Adjusted fixed charges $1,140 $1,595 $1,458 $1,325 $1,317 $1,241
====== ====== ====== ====== ====== ======
RATIO OF EARNINGS TO FIXED CHARGES 5.22 (a) 3.49 (b) 3.98 4.27 4.00 4.18
</TABLE>
- -----------------------------
(a) Excluding pretax special items of $(1,026) million, or $(605) million
after-tax, the Company's ratio of earnings to fixed charges for the nine
months ended September 30, 1999 would have been 4.32.
(b) Excluding pretax special items of $755 million, or $482 million after-tax,
the Company's ratio of earnings to fixed charges for the year ended
December 31, 1998 would have been 3.96.
<PAGE>
EXHIBIT 25
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
==========================
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
</TABLE>
--------------------------
GTE Corporation
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
New York 13-1678633
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1255 Corporate Drive
SVC04C08 75038
Irving, Texas (Zip code)
(Address of principal executive offices)
</TABLE>
--------------------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York, N.Y. 10006,
New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y.
10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 19th day of October, 1999.
THE BANK OF NEW YORK
By: MICHELE L. RUSSO
----------------------------------------
Name: Michele L. Russo
Title: Assistant Treasurer
-3-
<PAGE>
Exhibit 7
-------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
ASSETS Dollar Amounts
In Thousands
<S> <C>
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency and
coin............................................ $ 5,597,807
Interest-bearing balances........................ 4,075,775
Securities:
Held-to-maturity securities...................... 785,167
Available-for-sale securities.................... 4,159,891
Federal funds sold and Securities purchased
under agreements to resell...................... 2,476,963
Loans and lease financing receivables:
Loans and leases, net of unearned
income...............38,028,772
LESS: Allowance for loan and
lease losses............568,617
LESS: Allocated transfer risk
reserve..................16,352
Loans and leases, net of unearned income,
allowance, and reserve.......................... 37,443,803
Trading Assets................................... 1,563,671
Premises and fixed assets (including capitalized
leases)......................................... 683,587
Other real estate owned.......................... 10,995
Investments in unconsolidated subsidiaries and 184,661
associated companies............................
Customers' liability to this bank on acceptances
outstanding..................................... 812,015
Intangible assets................................ 1,135,572
Other assets..................................... 5,607,019
-----------
Total assets..................................... $64,536,926
===========
LIABILITIES
Deposits:
In domestic offices.............................. $26,488,980
Noninterest-bearing ......10,626,811
Interest-bearing ........15,862,169
In foreign offices, Edge and Agreement
subsidiaries, and IBFs.......................... 20,655,414
Noninterest-bearing .........156,471
Interest-bearing .........20,498,943
Federal funds purchased and Securities sold
under agreements to repurchase.................. 3,729,439
Demand notes issued to the U.S.Treasury.......... 257,860
Trading liabilities.............................. 1,987,450
Other borrowed money:
With remaining maturity of one year or less...... 496,235
With remaining maturity of more than one year
through three years............................. 465
With remaining maturity of more than three years. 31,080
Bank's liability on acceptances executed and
outstanding..................................... 822,455
Subordinated notes and debentures................ 1,308,000
Other liabilities................................ 2,846,649
-----------
Total liabilities................................ 58,624,027
-----------
EQUITY CAPITAL
Common stock..................................... 1,135,284
Surplus.......................................... 815,314
Undivided profits and capital reserves........... 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities................... ( 7,956)
Cumulative foreign currency translation
adjustments..................................... ( 31,510)
-----------
Total equity capital............................. 5,912,899
-----------
Total liabilities and equity capital............. $64,536,926
===========
</TABLE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni }
Alan R. Griffith } Directors
Gerald L. Hassell }
-------------------------
<PAGE>
EXHIBIT 26
GTE CORPORATION
Invitation For Bids For the Purchase of
$________________________
GTE CORPORATION (the "Corporation") is inviting bids, subject to the
terms and conditions stated herein, for the purchase from it of $_____________
aggregate principal amount of its _________________________________________ (the
"Securities").
1. Information Respecting the Company and the Securities.
Invited bidders may examine, at the office of
___________________________ (Telephone (___) ___-____), on any business day
between 10:00 A.M. and 4:00 P.M., the following:
(a) the Registration Statement on Form S-3 (including the Prospectus,
documents incorporated by reference and exhibits), with respect to the
Securities;
(b) the Restated Certificate of Incorporation of the Corporation, as
amended;
(c) a copy of the Indenture dated as of December 1, 1996, as amended
and supplemented (herein called the "Indenture") between the Corporation and The
Bank of New York (the "Trustee") under which the Securities are to be issued,
together with the form of Securities;
(d) the form of Purchase Agreement (including the Standard Purchase
Agreement Provisions (November 1999 Edition)) to be used in submitting bids
for the purchase of the Securities;
(e) the form of questionnaire to be provided by prospective bidders;
and
(f) memorandum prepared by the counsel to the Purchasers with respect
to the status of the Securities under securities or blue sky laws of certain
jurisdictions.
Copies of said documents in reasonable quantities (except the Restated
Certificate of Incorporation of the Corporation, the Indenture, the form of
Securities and other exhibits to the Registration Statement) will be supplied
upon request, so long as available, to invited bidders.
The Corporation reserves the right to amend the Registration Statement
(including exhibits thereto) and Prospectus and to supplement the Prospectus in
such manner as shall not be unsatisfactory to Messrs. Milbank, Tweed, Hadley &
McCloy LLP. The Corporation will make copies of any such amendments or
supplements available for examination at the above offices in Irving, Texas.
2. Information Regarding the Bidders to be Furnished to the Corporation.
<PAGE>
In the case of a bid by a group of bidders, the Representative shall be
designated and authorized as the representative of the several bidders in such
group in the questionnaires filed by members of the group.
In the case of a bid by a group of bidders, the Representative shall
provide to the Corporation in writing a list of the names of any potential
bidder in its group no later than 10:00 A.M. on the business day immediately
preceding the date scheduled for the submission of bids. No bid by a group of
bidders will be accepted by the Corporation if such group contains a member to
which the Corporation has objected prior to 5:00 P.M. on the business day
immediately preceding the date scheduled for the submission of bids. Additional
members may be added to a group of bidders after 10:00 A.M. on the business day
immediately preceding the date scheduled for the submission of bids only with
the consent of the Corporation.
No bid will be considered unless the Sole Bidder, or in the case of a
group of bidders, each member of the group through the Representative, shall
have furnished to the Corporation, and the Corporation shall have received, two
signed copies of the form of questionnaire referred to above, properly filled
out by the Sole Bidder or by each member of the group of bidders (the
Corporation reserving, however, the right to waive the form of the questionnaire
or any irregularity which it deems to be immaterial in any such questionnaire
and to extend either generally or in specific instances the time for furnishing
questionnaires, and specifically reserving the right to obtain all required
bidder information by telegraph or other means of communication). Such copies
shall be furnished to the Corporation by telecopy at (972) 507-5343 or by hand
delivery or by mail to 1255 Corporate Drive, Mail Code: SVC04C08, Irving, Texas
75038, Attention: David S. Kauffman, Esq., to be received no later than 5:00
P.M., Central time on the business day immediately preceding the date scheduled
for the submission of bids (or on such later date as may be determined pursuant
to Section 5 hereof). Notwithstanding the furnishing of such questionnaires to
the Corporation, any Sole Bidder or the Representative on behalf of a group of
bidders thereafter may determine, without liability to the Corporation, not to
bid, or any of the several members of a group (other than the Representative)
may withdraw therefrom at or before the time of submission of the bid of such
group.
3. Obligations of a Representative to a Group of Bidders
In the case of a group of bidders, the Representative shall (i)
distribute to the members of the group any due diligence materials received by
it from the Corporation and (ii) upon the request of any member of such group,
request from the Corporation and deliver to such member of the group copies of
the documents listed in Section 1 hereof.
4. Form and Contents of Bids.
Each bid shall be for the purchase of all of the Securities.
In case the bid of a group of bidders is accepted, the obligations of
the members of the group to purchase the respective principal amounts of
Securities indicated in the bid shall be several and not joint. Such bidders
shall act through the Representative, who shall be empowered to bind the bidders
in the group. No bidder may submit or participate in more than one bid.
5. Submission of Bids and Delivery of Confirmation of Bids.
2
<PAGE>
All bids must be submitted by telephone and confirmed in writing in the
manner set forth in Exhibit A, Confirmation of Bid, attached, signed by the Sole
Bidder or the Representative on behalf of the members of a group of bidders, or
in the case of a single bidder, by such bidders. In the case of fixed rate
Securities, each bid must specify: (a) the interest rate, which shall be a
multiple of 1/8 of 1% or 1/100 of 1%; and (b) the price to be paid to the
Corporation for the Securities, which shall be expressed as a percentage of the
principal amount of the Securities and shall not be less than 98% thereof nor
more than 100% thereof. In the case of floating rate Securities, each bid must
specify such information as the Corporation shall require. The Confirmation of
Bid shall specify the same information specified in the telephonic bid.
The Corporation reserves the right in its discretion from time to time
to postpone the time and the date for submission of bids for an aggregate period
of not exceeding thirty days, and will give notice of any such postponement to
each Invited Bidder, specifying in such notice the changes in the times and
dates set forth in the Purchase Agreement occasioned by such postponement. In
the event that any such postponement should be for a period of more than three
full business days after the date of sending or delivering such notice, the time
for filing of questionnaires by Invited Bidders under Section 2 hereof shall by
such notice be postponed to 5:00 P.M., Central time, at the place of delivery
specified in Section 2 hereof, on the business day immediately preceding the
newly scheduled date for the submission of bids.
6. Acceptance or Rejection of Bids.
The Corporation may reject all bids, but if any bid for the Securities
is accepted the Corporation will accept that bid which shall result in the
lowest "annual cost of money" to the Corporation for the Securities, and any bid
not so accepted by the Corporation shall, unless such bid shall be involved in
rebidding as hereinafter provided, be deemed to have been rejected. The lowest
annual cost of money to the Corporation for the Securities shall be determined
by the Corporation and such determination shall be final. In case the lowest
annual cost of money to the Corporation is provided by two or more such bids,
the Corporation (unless it shall reject all bids) will give the makers of such
identical bids an opportunity (the duration of which the Corporation may in its
sole discretion determine) to improve their bids. The Corporation will accept,
unless it shall reject all bids, the improved bid providing the Corporation with
the lowest annual cost of money for the Securities. If upon such rebidding the
lowest annual cost of money to the Corporation is again provided by two or more
improved bids, the Corporation may without liability to the maker of any other
bid accept any one of such improved bids in its sole discretion, or may reject
all bids. If no improved bid is made within the time fixed by the Corporation,
the Corporation may without liability to the maker of any other bid accept any
one of the initially submitted bids providing the lowest annual cost of money to
the Corporation, or may reject all bids.
The Corporation further reserves the right to reject the bid of any
bidder or group of bidders if the Corporation, in the opinion of its counsel,
may not lawfully sell the Securities to such bidder or to any member of such
group, unless, in the case of a group of bidders, prior to 1:00 P.M., Central
time, on the date on which the bids are submitted, the member or members to
which, in the opinion of the Corporation's counsel, the Securities may not be
lawfully sold, have withdrawn from the group and the remaining members have
agreed to purchase the Securities which such withdrawing member or members had
offered to purchase.
3
<PAGE>
7. Purchase Agreement and Completion of Registration Statement.
The Corporation will signify its acceptance of a bid by signing the
Purchase Agreement. The Corporation shall, upon request, execute the acceptance
on additional copies of the Purchase Agreement as shall be reasonably requested
by the Representative of the successful bidders. Upon the acceptance of a bid,
the successful Sole Bidder, or, in the case of a bid by a group of bidders, the
Representative on behalf of the successful bidders, shall furnish to the
Corporation, in writing, all information regarding the bidder or bidders and the
public offering, if any, of the Securities required in connection with the
prospectus supplement to the Registration Statement, any further information
regarding the bidders and the public offering, if any, to be made by them, which
may be required to complete the applications filed by the Corporation with
public authorities having jurisdiction over the Corporation, and other
information required by law in respect of the purchase or sale of the Securities
as herein contemplated.
8. Delivery of the Securities.
The Securities will be delivered in temporary or definitive form, at the
election of the Corporation, to the purchasers of the Securities at the place,
at the time and in the manner indicated in the Purchase Agreement, against
payment of the purchase price therefor as provided in the Purchase Agreement.
9. Opinion of Counsel for the Purchasers.
Messrs. Milbank, Tweed, Hadley & McCloy LLP, 1 Chase Manhattan Plaza,
New York, N.Y. 10005, have been requested by the Corporation to act as counsel
for the successful bidder or bidders of the Securities and to give to the
purchasers an opinion as outlined in the Purchase Agreement. Such counsel has
reviewed or will review, from the standpoint of possible purchasers of the
Securities, the form of the Registration Statement and the Prospectus and
competitive bidding papers, including the Purchase Agreement, and has reviewed
or will review the corporate proceedings with respect to the issue and sale of
the Securities. Invited bidders may confer with Messrs. Milbank, Tweed, Hadley &
McCloy LLP with respect to any of the foregoing matters at the offices of said
firm, 1 Chase Manhattan Plaza, New York, N.Y. 10005, Attn.: Robert W. Mullen,
Jr., Esq. at (212) 530-5150. The successful bidders are to pay the compensation
and disbursements of such counsel, except as otherwise provided in the Purchase
Agreement. Such counsel will, on request, advise any Sole Bidder who has, or the
Representative of any group of bidders who have, furnished questionnaires as
provided in Section 2 hereof, of the amount of such compensation and of the
estimated amount of such disbursements.
GTE CORPORATION
_________, ____
4
<PAGE>
Exhibit A
GTE CORPORATION
(the "Corporation")
CONFIRMATION OF BID FOR
$___,000,000 _____________________________________
(the "Securities")
TERMS
Maturity: ___________________.
Interest Payable:
Redemption Provisions:
[The Securities will not be redeemable prior to maturity.]
OR
[The redemption price applicable to redemptions to and including
__________ (the "initial regular redemption price") will be the initial public
offering price as defined below plus the rate of interest on the Securities; the
redemption price during the twelve month period beginning __________ and during
the twelve month periods beginning on each __________ thereafter through the
twelve month period ended __________ will be determined by reducing the initial
regular redemption price by an amount determined by multiplying (a) 1/___ of the
amount by which such initial regular redemption price exceeds 100% by (b) the
number of such full twelve month periods which shall have elapsed between
__________ and the date fixed for redemption; and thereafter the redemption
prices during the twelve month periods beginning __________ shall be 100%;
provided, however, that all such prices will be specified to the nearest 0.01%
or, if there is no nearest 0.01%, then to the next higher 0.01%.
For the purpose of determining the redemption prices of the Securities,
the initial public offering price of the Securities shall be the price,
expressed in percentage of principal amount (exclusive of accrued interest), at
which the Securities are to be initially offered for sale to the public; if
there is not a public offering of the Securities, the initial public offering
price of the Securities shall be deemed to be the price, expressed in percentage
of principal amount (exclusive of accrued interest), to be paid to the
Corporation by the Purchasers.]
OR
[The Debt Securities may be redeemed on not less than 30 nor more than
60 days prior notice given as provided in the Indenture, as a whole or from time
to time in part, at the option of the Corporation, at a redemption price equal
to the greater of (i) 100% of the principal amount thereof and (ii) the sum of
the present values of the remaining scheduled payments of principal and interest
thereon discounted to the date of redemption on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate plus ___
basis points, plus, in either case, accrued and unpaid interest on the principal
amount being redeemed to such redemption date.
"Treasury Rate" means, with respect to any redemption date, (i) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15(519)" or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Treasury Rate shall be interpolated or extrapolated from such
yields on a straight line basis, rounding to the nearest month) or (ii) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per annum equal
A-1
to the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue, calculated using a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date. The Treasury Rate shall be calculated on the third
Business Day preceding the redemption date.
"Business Day" means any calendar day that is not a Saturday, Sunday
or legal holiday in New York, New York and on which commercial banks are open
for business in New York, New York.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term ("Remaining Life") of the Debt Securities to be redeemed that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such Debt Securities.
"Independent Investment Banker" means ___________________________ or,
if such firm is unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by the
Indenture Trustee.
"Comparable Treasury Price" means (i) the average of three Reference
Treasury Dealer Quotations for such redemption date, or (ii) if the Independent
Investment Banker is unable to obtain three such Reference Treasury Dealer
Quotations, the average of all such quotations obtained.
"Reference Treasury Dealer" means (i) ___________________________,
___________________________ and ___________________________, and their
respective successors, provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in The City of New York
(a "Primary Treasury Dealer"), the Corporation shall substitute therefor another
Primary Treasury Dealer and (ii) any other Primary Treasury Dealer selected by
the Independent Investment Banker and approved in writing by the Corporation.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker at 3:30
p.m., New York City time, on the third Business Day preceding such redemption
date.]
NAME OF BIDDER:
_________________________________________________________
TELEPHONE NUMBER TO BE USED TO CALL IN BID:
_____________________________
A-2
<PAGE>
TIME AND DATE BID RECEIVED:
_____________________________________________
(to be completed by the Corporation)
By submitting this bid, the bidder named above agrees to the following terms and
conditions:
o Each bid shall be for the purchase of all of the Securities.
o Each bid may be made by a single bidder or by a group of bidders.
o The bidder acknowledges that it (and all members of the bidding group it
represents) has received a copy of the Prospectus dated _________, ____.
o If the bid is made by a group of bidders, the undersigned represents and
warrants that it is fully authorized by all bidders in the group to act on their
behalf and to bind them to the terms of the Purchase Agreement relating to the
Securities.
o Each bid shall specify:
In the case of fixed rate Securities:
- the annual interest rate on the Securities, which rate shall be a
multiple of 1/8 of 1% or 1/100 of 1%; and
- the price (exclusive of accrued interest) to be paid to the
Corporation for the Securities, which price shall not be less than __% and not
more than 100% of the principal amount of the Securities, and that accrued
interest on the Securities from __________, ____, to the date of payment of the
Securities and the delivery thereof will be paid to the Corporation by the
purchaser or purchasers.
In the case of floating rate Securities:
[INFORMATION TO BE DELIVERED TO THE CORPORATION]
In the case of a bid by a group of bidders, the name of, and amount
to be purchased by, each bidder.
o Bids must be received by 9:15 A.M., Central time, on ______, ____, or such
later time and/or date as the Corporation may specify (the "Bid Time").
o Bids shall be irrevocable for one (1) hour after the Bid Time.
o The winning bid shall be selected on the basis of the lowest "annual cost of
money" to the Corporation.
o Whether or not this bid is accepted by the Corporation, an executed copy of
this Confirmation of Bid must be sent promptly by telecopy to the Corporation at
(972) 507-5343, Attn: David S. Kauffman.
o If this bid is accepted, upon acceptance the undersigned agrees to promptly
furnish to the Corporation a signed copy of the Purchase Agreement relating to
the Securities and a copy of all information required to be included in the
Prospectus relating to the Securities.
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<PAGE>
o Closing Date: _____________, ____ at 10:00 A.M., New York City time.
BID:
For fixed rate Securities:
Interest Rate ________%
Price to be paid to the Corporation ___________%
For floating rate Securities:
[INFORMATION TO BE DELIVERED TO THE CORPORATION]
_________________________________
(Name of Bidder)
_________________________________
(Authorized Signature)
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