<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2)
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
BELL ATLANTIC CORPORATION
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(Name of Registrant as Specified in Its Charter)
BELL ATLANTIC CORPORATION
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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- ---------------
1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
[BELL ATLANTIC LOGO]
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NOTICE OF 1995 ANNUAL MEETING
OF SHAREOWNERS
February 28, 1995
The 1995 Annual Meeting of Shareowners of Bell Atlantic Corporation (the
"Company") will be held at The Penn State Scanticon Conference Center Hotel, 215
Innovation Boulevard, Penn State Research Park, State College, Pennsylvania, on
Friday, April 28, 1995, from 10 a.m. to approximately noon, for the following
purposes:
1. To elect sixteen directors for the ensuing year;
2. To ratify the appointment of independent accountants to audit the
Company's accounts for the year 1995;
3. To vote upon an amendment to the Bell Atlantic Stock Compensation
Plan for Outside Directors; and
4. To act upon such other matters, including shareowner proposals, as
may properly come before the meeting.
Holders of the Company's common stock of record at the close of business on
February 28, 1995, will be entitled to vote at the Annual Meeting or any
adjournment thereof. A list of such shareowners will be available for inspection
by shareowners of record during regular business hours at the offices of Bell
Atlantic - Pennsylvania, Inc., at 2525 Green Tech Drive, State College,
Pennsylvania, for ten days prior to the date of the Annual Meeting. Any
shareowner wishing to inspect the list should make an appointment to do so with
the Vice President - Corporate Secretary and Counsel, Bell Atlantic Corporation,
1717 Arch Street, 32nd Floor, Philadelphia, Pennsylvania 19103.
The Penn State Scanticon is accessible to all shareowners. A sign language
interpreter will be provided if any shareowner so requests of the Vice
President - Corporate Secretary and Counsel by April 7, 1995.
By Order of the Board of Directors
P. Alan Bulliner
Vice President - Corporate Secretary and Counsel
PLEASE SIGN AND PROMPTLY RETURN THE PROXY CARD IN THE ENCLOSED
ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL
MEETING. SHAREOWNERS WILL BE ADMITTED TO THE ANNUAL MEETING
UPON PRESENTATION OF PROOF OF OWNERSHIP. FOR SHAREOWNERS
WHO OWN STOCK HELD BY BANKS, BROKERS, OR INVESTMENT
PLANS, EXAMPLES OF PROOF OF OWNERSHIP WOULD INCLUDE
A 1995 BROKERAGE STATEMENT OR A LETTER FROM THE
BANK OR BROKER.
<PAGE> 3
PROXY STATEMENT
<TABLE>
<CAPTION>
CONTENTS PAGE
<S> <C>
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Voting Procedures 1
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Election of Directors 1
- -Item A on Proxy Card
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Ratification of Independent Accountants 6
- -Item B on Proxy Card
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Amendments to the Bell Atlantic Stock Compensation Plan for Outside Directors 6
- -Item C on Proxy Card
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Proposals of Shareowners 7
- -Items D, E, F, and G on Proxy Card
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Other Business 11
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Executive Compensation 11
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Submission of Shareowner Proposals and Director 20
Nominations for 1996 Annual Meeting
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Proxy Solicitation 20
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</TABLE>
- -Items scheduled to be voted on at the Annual Meeting.
BELL ATLANTIC CORPORATION
1717 ARCH STREET, PHILADELPHIA, PA 19103
<PAGE> 4
VOTING PROCEDURES---------------------------------------------------------------
This proxy statement and the accompanying proxy card or proxy/voting
instruction card (either, the "proxy card") are being mailed beginning on or
about March 7, 1995, to holders of record of common stock, par value $1.00 per
share, of Bell Atlantic Corporation (the "Company" or "Bell Atlantic") in
connection with the solicitation of proxies by the Board of Directors for the
Company's 1995 Annual Meeting of Shareowners. The record date for the Annual
Meeting is the close of business on February 28, 1995. On that date,
approximately 436,429,000 shares of common stock were outstanding, each of which
is entitled to one vote at the Annual Meeting.
When a proxy card is returned properly signed, the shares represented will
be voted in accordance with the shareowner's directions. If the proxy card is
signed and returned without directions, the shares will be voted as recommended
by the Directors. A shareowner giving a proxy may revoke it at any time before
it is voted at the Annual Meeting, by written notice to the Secretary, by
submission of a proxy bearing a later date, or by casting a ballot at the Annual
Meeting.
The holders of one-third of the shares issued and outstanding and entitled
to vote, present in person or represented by proxy, will constitute a quorum for
the transaction of business. Assuming a quorum is present, the sixteen nominees
for Director receiving the highest number of votes will be elected. For Items B,
D, E, F and G, the affirmative vote of a majority of shares present in person or
by proxy and voting on a matter is necessary for approval. For Item C, the
proposal to amend the Bell Atlantic Stock Compensation Plan for Outside
Directors, Securities and Exchange Commission rules specify that a majority of
shares present in person or by proxy and entitled to vote is necessary for
approval. Shares represented by proxies which are marked "abstain" for Items B,
D, E, F and G on the proxy card and proxies which are marked to deny
discretionary authority on other matters will not be included in the vote totals
for those items and, therefore, will have no effect on the vote. Shares
represented by proxies which are marked "abstain" for Item C will have the same
effect as a vote "against" Item C. Where brokers are prohibited from exercising
discretionary authority for beneficial owners who have not provided voting
instructions (commonly referred to as "broker non-votes"), those shares will not
be included in the vote totals.
If a shareowner is a participant in the Company's Dividend Reinvestment and
Stock Purchase Plan ("DRSPP"), the proxy card covers the number of full shares
registered in the name of the Company in the participant's plan account and will
serve as voting instructions for such shares. If a shareowner is a participant
in the Company's 1976 Employee Stock Ownership Plan ("1976 ESOP"), Savings Plan
for Salaried Employees, or Savings and Security Plan (Non-Salaried Employees),
the proxy card will similarly serve as voting instructions for the trustees of
those Plans, if accounts are registered in the same name. Shares in DRSPP and
the 1976 ESOP cannot be voted unless the proxy card is signed and returned. If
proxy cards representing shares in the two Savings Plans are not returned, those
shares will be voted in the same proportion as the shares for which signed proxy
cards are returned by other participants in those Plans.
ELECTION OF DIRECTORS-----------------------------------------------------------
ITEM A ON PROXY CARD
Each of the sixteen nominees named on the following pages has been
nominated for election as a Director of the Company to serve until the 1996
Annual Meeting of Shareowners, or until his or her successor has been duly
elected and qualified. Each nominee is currently a Director. If so authorized,
the persons named in the accompanying proxy card intend to vote for the
reelection of each nominee. Shareowners who do not wish their shares to be voted
for a particular nominee may so indicate in the space provided on the proxy
card.
If one or more of the nominees should become unavailable to serve at the
time of the Annual Meeting, the shares represented by proxy will be voted for
the remaining nominees and for any substitute nominee or nominees designated by
the Board of Directors. If no substitute is designated, the size of the Board
may be reduced. The Board knows of no reason why any of the nominees will be
unavailable to serve.
There follows a brief description of each nominee's principal occupation
and business experience, age, and directorships held in other corporations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES
IDENTIFIED ON THE FOLLOWING PAGES.
1
<PAGE> 5
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NOMINEES
- ------------------
WILLIAM W. ADAMS, Retired Chairman of the Board, Armstrong
World Industries, Inc., since 1994; Chairman of the Board
(1993-1994); President and Chairman of the Board (1988-1993).
Director of Bell Atlantic since 1993. Director of Bell
Atlantic - Pennsylvania, Inc. (1986-1993). Age 60.
- ------------------
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WILLIAM O. ALBERTINI, Executive Vice President and Chief
Financial Officer, Bell Atlantic Corporation, since February
1995; Vice President and Chief Financial Officer (1991-January
1995); Chairman, President and Chief Executive Officer, Bell
Atlantic Enterprises International, Inc. (1989-1991). Director
of American Water Works Company, Inc.; Grupo Iusacell, S.A. de
C.V. Director of Bell Atlantic since February 1995. Age 51.
- ------------------
- --------------------------------------------------------------------------------
- ------------------
LAWRENCE T. BABBIO, JR., Vice Chairman, Bell Atlantic
Corporation, since February 1995; Executive Vice President and
Chief Operating Officer (1994-January 1995); Chairman, Chief
Executive Officer and President, Bell Atlantic Enterprises
International, Inc. (1991-1994); President and Chief Executive
Officer, Bell Atlantic Mobile Systems, Inc. (1990-1991); Vice
President, Engineering and Operations, Bell Atlantic Network
Services, Inc. (1987-1990). Director of Grupo Iusacell, S.A. de
C.V. Director of Bell Atlantic since February 1995. Age 50.
- ------------------
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THOMAS E. BOLGER, Chairman of the Executive Committee of the
Board of Directors, Bell Atlantic Corporation, since 1983;
Chairman of the Board (January-June 1989); Chairman of the
Board and Chief Executive Officer (1983-1988). Director of
Ashland Oil, Inc. Age 67.
- ------------------
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FRANK C. CARLUCCI, Chairman, The Carlyle Group (merchant
banking), since 1993; Vice Chairman (1989-1993). Secretary of
Defense, United States of America (1987-1989). Director of
Ashland Oil, Inc.; BDM International, Inc.; CB Commercial
Holdings, Inc.; General Dynamics Corporation; Kaman
Corporation; Neurogen Corporation; Northern Telecom Ltd.; The
Quaker Oats Co.; SunResorts Ltd.; Texas Biotechnology
Corporation; The Upjohn Co.; Westinghouse Electric Corporation.
Director of Bell Atlantic since 1989. Age 64.
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2
<PAGE> 6
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WILLIAM G. COPELAND, Chairman of the Board, Providentmutual
Holding Company (insurance), since 1993. Chairman of the Board,
Continental American Life Insurance Company of Delaware
(1991-1993); Chairman of the Board and Chairman of the
Executive Committee (1988-1990); Chairman of the Board,
President and Chief Executive Officer (1984-1988). Director of
PNC Bank Corp. Director of Bell Atlantic since 1983. Age 69.
- ------------------
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JAMES G. CULLEN, Vice Chairman, Bell Atlantic Corporation,
since February 1995; President (1993-January 1995); President
and Chief Executive Officer, Bell Atlantic - New Jersey, Inc.
(1989-1993). Director of First Fidelity Bancorporation;
Prudential Life Insurance Company. Director of Bell Atlantic
since February 1995. Age 52.
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JAMES H. GILLIAM, JR., Executive Vice President and General
Counsel, and Member of the Executive Committee, Beneficial
Corporation (financial services), since 1992; Executive Vice
President, General Counsel and Secretary (1989-1991). Director
of Beneficial Corporation; Beneficial National Bank; Delmarva
Power & Light. Trustee of Howard Hughes Medical Institute.
Director of Bell Atlantic since 1989. Age 49.
- ------------------
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THOMAS H. KEAN, President, Drew University, since 1990.
Governor, State of New Jersey (1982-1990). Director of Amerada
Hess Corporation; ARAMARK Corporation; Beneficial Corporation;
Fiduciary Trust Company International; United Healthcare
Corporation. Director of Bell Atlantic since 1990. Age 59.
- ------------------
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JOHN C. MAROUS, JR., Retired Chairman, Westinghouse Electric
Corporation, since 1990; Chairman and Chief Executive Officer
(1988-1990). Director of Connecticut Mutual Life Insurance
Company; Consolidated Rail Corporation; Mellon Bank
Corporation. Director of Bell Atlantic since 1983. Age 69.
- ------------------
3
<PAGE> 7
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- ------------------
JOHN F. MAYPOLE, Managing Partner, Peach State Real Estate
Holding Company, Corporate Director and Consultant, since 1984.
Director of Blodgett Corporation; Briggs Industries, Inc.; Dan
River, Inc.; Davies, Turner & Co.; Igloo Holdings, Inc.
Director of Bell Atlantic since 1983. Age 55.
- ------------------
- --------------------------------------------------------------------------------
- ------------------
JOSEPH NEUBAUER, Chairman of the Board, President and Chief
Executive Officer, ARAMARK Corporation (services management),
since 1984. Director of Federated Department Stores; First
Fidelity Bancorporation; Penn Mutual Life Insurance Company.
Director of Bell Atlantic since February 1995. Director of Bell
Atlantic - Pennsylvania, Inc. (1986-February 1995). Age 53.
- ------------------
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- ------------------
THOMAS H. O'BRIEN, Chairman and Chief Executive Officer, PNC
Bank Corp., since 1992; Chairman, President and Chief Executive
Officer (1988-1991); President and Chief Executive Officer
(1985-1988). Director of PNC Bank Corp.; Hilb, Rogal and
Hamilton Company. Director of Bell Atlantic since 1987. Age 58.
- ------------------
- --------------------------------------------------------------------------------
- ------------------
ROZANNE L. RIDGWAY, Co-Chair, The Atlantic Council of The
United States (a private foreign policy institute), since 1993;
President (1989-1992). Assistant Secretary of State for Europe
and Canada (1985-1989). Director of The Boeing Company;
Citicorp and Citibank; Emerson Electric Company; RJR Nabisco;
3M Company; Sara Lee Corporation; Union Carbide Corp. Director
of Bell Atlantic since 1990. Age 59.
- ------------------
- --------------------------------------------------------------------------------
- ------------------
RAYMOND W. SMITH, Chairman of the Board and Chief Executive
Officer, Bell Atlantic Corporation, since 1989; President and
Chief Executive Officer (January-June 1989). Director of
CoreStates Financial Corporation; USAir Group, Inc. Director of
Bell Atlantic since 1985. Age 57.
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4
<PAGE> 8
- --------------------------------------------------------------------------------
- ------------------
SHIRLEY YOUNG, Vice President, Consumer Market Development,
General Motors Corporation, since 1988. Chairman, Grey
Strategic Marketing, Inc. (1988-1990). Director of Promus
Companies; The Bombay Company, Inc.; Consultant Director of
Dayton Hudson Corporation. Director of Bell Atlantic since
1986. Age 59.
- ------------------
- --------------------------------------------------------------------------------
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors (the "Board") held ten meetings in 1994. The Board
has established an Executive Committee, an Audit Committee, a Human Resources
Committee, a Finance Committee, and a Committee on Directors.
The Executive Committee, which met once in 1994, has the authority during
the intervals between meetings of the Board to exercise the powers of the Board,
except for certain powers reserved exclusively to the Board. Messrs. Bolger
(Chair), Copeland, Kean, Marous, Maypole, and Smith are the current members of
the Committee.
The Audit Committee, which met six times in 1994, is responsible for
periodically reviewing the objectivity and results of audit programs of the
Company, recommending to the Board each year the firm of independent accountants
for appointment as auditors for the Company, meeting with the independent
auditors to consider the scope of their activities and findings, meeting with
appropriate officers of the Company to consider the Company's internal audit
program and findings, overseeing the Company's Integrity and Ethics Compliance
Program, and considering such other matters relating to the effectiveness of the
internal and external audits of the accounts of the Company as the Committee may
determine to be warranted. Messrs. Copeland (Chair), Adams, and Gilliam, and Ms.
Ridgway are the current members of the Committee.
The Human Resources Committee, which met five times in 1994, is responsible
for overseeing the management of human resources activities of the Company,
including the determination of compensation for senior management and the design
of pension, savings and certain other employee benefit plans. Messrs. Marous
(Chair), Kean, and Maypole, and Ms. Young are the current members of the
Committee.
The Finance Committee, which met five times in 1994, is responsible for
making recommendations to the Board concerning investment policy and methods of
financing the operations of the Company and its subsidiaries, overseeing
investments of the Company's employee benefit plans, and assisting the Company
in the development and evaluation of new business ventures. Messrs. Maypole
(Chair), Bolger, Carlucci, Copeland, Kean, and O'Brien are the current members
of the Committee.
The Committee on Directors, which met three times in 1994, is responsible
for recommending candidates for nomination to the Board and reviewing and making
recommendations regarding compensation of Directors who are not employees of the
Company ("Outside Directors"). The Committee is authorized to consider nominees
recommended by shareowners. Shareowners who wish to propose director candidates
for consideration by the Committee may do so by writing to the Secretary, giving
the candidate's name, biographical data and qualifications. Messrs. Kean
(Chair), Copeland, Gilliam, and Maypole, and Ms. Young are the current members
of the Committee.
The Directors attended over 95 percent of their Board and assigned
Committee meetings in the aggregate in 1994.
COMPENSATION OF OUTSIDE DIRECTORS
All Outside Directors receive an annual retainer of $27,000 and a fee of
$1,250 for each Board and Committee meeting attended. Committee chairpersons are
paid an additional annual retainer of $5,000. Directors who are employees
receive no remuneration for serving as members of the Board or as members of
Committees of the Board.
5
<PAGE> 9
Pursuant to the Bell Atlantic Stock Compensation Plan for Outside Directors
("Stock Compensation Plan for Outside Directors"), each Outside Director
received a grant of a number of shares of Company stock having a value equal to
$5,000 in July 1994. Shareowners are being asked to approve an amendment to the
Stock Compensation Plan for Outside Directors which would replace the annual
grant of Company stock with an annual grant of options to purchase 1,000 shares
of Company stock.
Directors may elect to defer the receipt of all or a part of their fees and
retainers under the Bell Atlantic Deferred Compensation Plan for Outside
Directors ("Outside Directors' Deferral Plan"). Amounts so deferred may be
allocated to a cash deferral account, which earns interest, compounded monthly,
at a rate determined by reference to 10-year United States Treasury notes, or to
a stock deferral account, which is credited with share equivalents of Company
stock having a value equal to the amount deferred, and which accrues additional
shares of Company stock based on dividends paid, or divided between the two
accounts. Outside Directors also are furnished life insurance coverage and
business-related travel accident insurance. The aggregate premiums paid by the
Company for such insurance coverage in 1994 were approximately $5,386.
The Bell Atlantic Retirement Plan for Outside Directors provides retirement
benefits for Outside Directors. To be eligible for a benefit, a Director must
have served for an aggregate of five years as an Outside Director on the Board
of the Company or on the board of directors of a subsidiary telephone company.
The normal benefit is an annual amount equal to 10 percent of the annual Board
retainer payable to a Director at the date of retirement, multiplied by the
Director's aggregate years of service as an Outside Director up to a maximum of
10 years. A Director is eligible to receive a retirement benefit at the later of
age 65 or the date of retirement. Benefits beginning before age 65, or deferred
to age 70, are actuarially adjusted.
In 1989, the Board adopted the Bell Atlantic Corporation Directors'
Charitable Giving Program, pursuant to which the Company is obligated to
contribute an aggregate of $500,000 to one or more charitable organizations or
educational institutions designated by Directors who meet certain eligibility
requirements, upon the Director's death, either while serving on the Board or
after retirement from the Board. Designated donees are subject to Company
review. The Program was discontinued, effective for Directors elected after
1992.
RATIFICATION OF INDEPENDENT ACCOUNTANTS-----------------------------------------
ITEM B ON PROXY CARD
The Board of Directors, upon recommendation of the Audit Committee, has
reappointed the firm of Coopers & Lybrand L.L.P., Certified Public Accountants,
as independent accountants to conduct an audit of the accounts of the Company
for the year 1995. If the appointment is not ratified by shareowners, the Audit
Committee may reconsider its recommendation. A representative of Coopers &
Lybrand is expected to be present at the Annual Meeting, will have an
opportunity to make a statement, and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF COOPERS &
LYBRAND AS INDEPENDENT ACCOUNTANTS FOR THE YEAR 1995.
AMENDMENTS TO THE BELL ATLANTIC STOCK COMPENSATION
PLAN FOR OUTSIDE DIRECTORS------------------------------------------------------
ITEM C ON PROXY CARD
At Bell Atlantic's 1991 Annual Meeting, shareowners of the Company voted to
approve the Bell Atlantic Stock Compensation Plan for Outside Directors (the
"Plan"), which provides for an annual grant to each Outside Director of Company
stock having a value of $5,000. Shareowners are being asked to approve an
amendment to the Plan which would replace this annual grant of stock with an
annual grant of options to purchase 1,000 shares of Company stock. The purpose
of the amendment is to further align the interests of the Company's Outside
Directors with the interests of the Company's shareowners. The amendment
parallels changes made to executive compensation.
Under the Plan, each Outside Director would receive an annual grant of
non-qualified options to purchase 1,000 shares of Company stock at an exercise
price equal to the fair market value on the date of grant. Options will become
exercisable on the first anniversary of the date of grant and will expire no
later than the tenth anniversary of the date of grant. The Plan also provides
for the acceleration of exercisability and expiration dates in the event of an
Outside Director's death, disability or retirement. Options will be granted
under the Plan automatically, and no action by the Board will be required. On
January 23, 1995, each Outside Director was granted options to purchase 1,000
shares of Company stock, subject to shareowner approval. This amendment would
increase annual
6
<PAGE> 10
compensation for each Outside Director by approximately $4,300, based on a
Black-Scholes valuation performed in mid-1994. This represents the first
increase in Outside Director compensation since 1991.
There are no tax consequences to the Outside Director or the Company upon
the grant of a stock option. On exercising an option, the Outside Director will
realize ordinary income to the extent the market value of the stock exceeds the
exercise price, and the Company may claim a tax deduction of like amount.
The Board may amend the Plan at any time, including the number of options
to be automatically granted under the Plan; provided, however, that any
amendment will be submitted for shareowner approval if, in the opinion of
counsel, such approval is necessary to continue the exemption of grants under
the Plan from the short-swing trading provisions of Section 16 of the Securities
Act of 1934, or to preserve the status of the Outside Directors as
"disinterested administrators" of the Company's executive compensation plans for
purposes of Section 16.
The closing price per share of the Company's common stock on February 15,
1995, as reported on the New York Stock Exchange Composite Tape, was $53 3/8.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
PROPOSALS OF SHAREOWNERS--------------------------------------------------------
ITEM D ON PROXY CARD
Mrs. Evelyn Y. Davis, Watergate Office Building, Suite 215, 2600 Virginia
Avenue, N.W., Washington, DC 20037, who owns 120 shares of the Company's common
stock, has stated that she intends to submit the following proposal at the
Annual Meeting:
"RESOLVED: That the shareholders recommend that the Board take the
necessary steps that Bell Atlantic specifically identify by name and corporate
title in all future proxy statements those executive officers, not otherwise so
identified, who are contractually entitled to receive in excess of $100,000
annually as a base salary, together with whatever other additional compensation
bonuses and other cash payments were due them.
REASONS: In support of such proposed Resolution, it is clear that the
shareholders have a right to comprehensively evaluate the management in the
manner in which the Corporation is being operated and its resources utilized. At
present only a few of the most senior executive officers are so identified, and
not the many other senior executive officers who should contribute to the
ultimate success of the Corporation. Through such additional identification the
shareholders will then be provided an opportunity to better evaluate the
soundness and efficacy of the overall management. Last year the owners of
37,856,065 shares, representing approximately 12.9% of shares voting, voted FOR
this proposal."
BOARD OF DIRECTORS' POSITION
The Board does not believe that adoption of the proposal would impart any
meaningful additional information to shareowners. The Board believes that the
disclosure requirements of the Securities and Exchange Commission ("SEC")
currently provide shareowners with sufficient information with respect to
compensation matters. In accordance with SEC rules, the Company provides
detailed information in its proxy statement regarding the compensation of its
most highly compensated executive officers, including the terms and conditions
of any contractual arrangements.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
ITEM E ON PROXY CARD
Mr. Richard A. Dee, 115 East 89th Street, New York, NY 10128, who owns 128
shares of the Company's common stock, has stated that he intends to submit the
following proposal at the Annual Meeting:
"STOCKHOLDERS OF PUBLICLY-OWNED CORPORATIONS DO NOT 'ELECT' DIRECTORS.
Directors are selected by incumbent directors and managements -- stockholders
merely 'RATIFY' or approve those selections much as they ratify selections of
auditors.
"The term 'Election of Directors' has been misused in corporate proxy
materials for many years to refer to the process by which directors are
empowered. The term is not only inappropriate -- it is misleading. WITH NO
CHOICE OF CANDIDATES, THERE IS NO ELECTION.
"Understandably, incumbent directors are anxious to protect their absolute
power over corporate activities. The root of that power is control of Corporate
Governance -- which is assured by control of board composition. Unfortunately,
the 'ELECTIVE PROCESS RIGHTS' of stockholders are being ignored.
7
<PAGE> 11
"Approval of this Corporate Governance proposal will provide Bell Atlantic
stockholders with a choice of director candidates each year -- and an
opportunity to vote for those whose qualifications and stated intentions they
favor. ITS APPROVAL WILL PROVIDE STOCKHOLDERS WITH PROPERLY OR 'DULY' ELECTED
REPRESENTATIVES.
"Public office-holders are duly elected -- and are held accountable.
Continuing in office depends upon satisfying constituents, not simply
nominators. Corporate directors take office unopposed and answer only to fellow
directors. Far too many directors divide their time between too many companies.
Perhaps the 'pool' from which directors are selected should be expanded to
include many younger highly-qualified business executives and more individuals
with other backgrounds that fit them well to represent stockholders.
"As long as incumbents are allowed to select and to propose only the number
of so-called candidates as there are directorships to be filled, and as long as
it is impossible, realistically, for stockholders to utilize successfully what
is supposed to be their right to nominate and elect directors, no practical
means will exist for stockholders to bring about director turnover -- until this
or a similar proposal is approved. Turnover is desirable because it reduces the
possibility of inbreeding and provides sources for new ideas and new approaches
to problems.
"IT IS HEREBY PROPOSED THAT THE BOARD OF DIRECTORS, AT ITS NEXT REGULAR
MEETING, ADOPT A RESOLUTION REQUIRING THE COMMITTEE ON DIRECTORS TO NOMINATE TWO
CANDIDATES FOR EACH DIRECTORSHIP TO BE FILLED BY THE VOTING OF STOCKHOLDERS AT
ANNUAL MEETINGS. IN ADDITION TO CUSTOMARY PERSONAL BACKGROUND INFORMATION, PROXY
STATEMENTS SHALL INCLUDE A STATEMENT BY EACH CANDIDATE AS TO WHY HE OR SHE
BELIEVES THEY SHOULD BE ELECTED.
"Although Delaware law enables all nominees to be selected by incumbents,
approval of this proposal would allow stockholders to replace any or all
directors if they become dissatisfied with them or with the results of corporate
policies and/or performance. Not a happy prospect even for those able to
nominate their possible successors.
"Any burden that a company may claim would be imposed upon it by having to
provide a choice of able director candidates is far outweighed by the benefits
that would accrue to its stockholders from a democratically-elected board -- a
board composed of representatives willing to have their respective
qualifications reviewed and weighed carefully by those whose interests they are
to serve.
"Please vote FOR this proposal."
BOARD OF DIRECTORS' POSITION
The Committee on Directors, which is composed entirely of independent
Directors, is the Committee of the Board responsible for recommending changes in
the composition, size and organization of the Board of Directors that will
enhance the effectiveness of the Board. The Committee carefully considers
candidates who are both professionally qualified and legally eligible to serve
as Directors of the Company. In addition to sound business judgment,
independence and the willingness to devote the required time, the Committee
considers factors such as education, geographic location, personal attributes
and special expertise complementary to the background and experience of the
Board as a whole. Based on its judgment as to which of those candidates will
best serve the interests of the shareowners, the Committee makes its
recommendations to the Board.
The proposal would require that the Committee nominate twice as many
candidates as there are positions to be filled. This requirement would
compromise the Committee's responsibility to recommend only those individuals
who would best serve the interests of the shareowners and hinder its ability to
make recommendations based on the composition of the Board as a whole.
The proponent states that the election of directors is not an "election"
since the Company's proxy statement contains only candidates recommended by the
Board. However, the proponent fails to state that shareowners are free to
recommend candidates to the Committee on Directors for inclusion in the Board's
slate of nominees. Subject to the notice provisions of the Company's by-laws, a
shareowner may also nominate a candidate for director at the Annual Meeting of
Shareowners. In addition, the proxy rules of the Securities and Exchange
Commission ("SEC") provide a mechanism for a shareowner to solicit proxies to
elect his or her own slate of directors.
SEC rules require disclosure in the Company's proxy statement of certain
background information regarding each nominee for Director. The Board does not
believe that an additional personal statement by each candidate in the proxy
statement would provide any additional meaningful information to shareowners.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
8
<PAGE> 12
ITEM F ON PROXY CARD
Mr. Harold and Mrs. Sheila Kurte, 2701 Edgewater Court, Fort Lauderdale, FL
33332, who own 984 shares of the Company's common stock, have stated that they
intend to submit the following proposal at the Annual Meeting:
"WHEREAS WE BELIEVE: The responsible governance of a corporation is
directly related to the amount of time and attention that its directors devote
to their duties.
Shareholder interest is best served by a board whose directors can give
fully of their talents to the management of this corporation.
"AND WHEREAS: At present there exists at this corporation the condition
where certain directors are obviously constrained in their ability to contribute
their full attention to the duties entrusted to them by the shareholders of the
corporation.
In fact according to the 1994 Bell Atlantic Notice of Annual Meeting and
Proxy Statement, one director of the corporation served as a director of no less
than thirteen (13) other for profit corporations.
"HEREBY BE IT RESOLVED: No member of the Bell Atlantic Board of Directors
may serve on the board of five (5) other for profit corporations. All directors
who serve on the board of more than five (5) other for profit corporations have
until the 1996 annual meeting to resign from whichever board(s) they see fit.
Failing to do so, a director is hereby declared ineligible to serve as a
director of the corporation.
SUPPORTING STATEMENT
We invite the company and its shareholders to endorse this proposal at the
1995 Bell Atlantic annual meeting. We feel that the adoption of this proposal
will eliminate any conflicts, divided loyalties, etc. any director may have.
We believe given the number of board and committee meetings held by a
corporation, it does not behoove the best interests of either the company or its
shareholders if its directors serve on the boards of more than a total of 6 for
profit corporations.
This proposal does not serve to restrict the ability of the corporation's
directors of serving as trustees or directors of not for profit organizations
(i.e. charities), but hereby encourage it by recognizing the importance of
community involvement.
BOARD OF DIRECTORS' POSITION
The Board believes that the number of other board memberships is not a
reliable measure of an individual's level of dedication and contribution to the
Bell Atlantic Board. Several of the current members of the Board also serve on
the boards of five or more other corporations, and their record of attendance
and participation is exemplary. Each of the Company's nominees for director is
fully committed to doing all that is necessary, including devoting unlimited
amounts of time, to fulfill his or her legal and fiduciary obligations to the
Company's shareowners. These nominees have a proven record of meeting this
commitment, and there is nothing in the record of any Board member to support
the argument that serving on more than five other boards hampers effectiveness.
The Committee on Directors of the Board of Directors, in making its
recommendations to the Board regarding Director candidates, examines an
individual's ability to exercise sound business judgment, reputation for
independence of thought and integrity, and his or her willingness to devote the
time required to be an effective representative of the shareowners. In
determining whether an individual possesses the willingness and ability to
devote the time required, the Committee examines the totality of each
individual's commitments, including service on other boards and the time demands
of the individual's present employment. The Committee also examines the record
and reputation of the prospective candidate for meeting commitments and
obligations. Without exception, the Committee on Directors has recommended only
those candidates fully able to meet the commitment to Bell Atlantic.
With respect to the argument that a larger number of outside directorships
relates in some measure either to a diminished capacity to exercise independence
of thought or increased risk of a conflict of interest, the record simply does
not support such an argument. The Company carefully monitors other board
memberships of each of its Directors and, on the rare occasion when a matter
comes before the Board that involves a company on whose board a Bell Atlantic
Director is a member, the Board member is excused from the meeting and does not
participate in any discussion or vote. Furthermore, the Board believes that
independence is not a function of how many boards -- whether profit or
non-profit -- on which a person sits, but rather the individual's capacity for
independent
9
<PAGE> 13
thought and action and willingness to express a point of view in board
deliberations. In other words, independence is a function of character, not of
the quantity of other associations.
Finally, the Board believes that by setting an arbitrary limit on service
on other boards, the proposal would put the Company at a competitive
disadvantage in developing the Bell Atlantic Board to its full potential. It
would limit the potential candidate pool and hinder the Board's ability to
enhance its effectiveness through the diversity of experience of each of its
members. The experience of Board members gained through service on the boards of
other corporations is an asset, not a liability, for our Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
ITEM G ON PROXY CARD
Central Pension Fund of the International Union of Operating Engineers and
Participating Employers, which owns 85,180 shares of the Company's common stock,
has stated that it intends to present the following proposal at the Annual
Meeting:
"BE IT RESOLVED: That the shareholders of Bell Atlantic Corporation
("Company") request that the Board of Directors in the future refrain from
providing pension or other retirement benefits to non-employee or outside
Directors unless such benefits are specifically submitted to the shareholders
for approval.
The Board of Directors should play a vital and independent role in helping
to determine overall corporate policy and strategic direction. They should
actively monitor senior management in faithfully implementing these policies. In
their capacity on the Board, Directors owe their fundamental allegiance to
shareholders of the corporation -- the owners who elect them, and not to
management.
We believe, however, that certain business or financial relationships can
adversely affect the ability of Directors to function in their appropriate
oversight role. This is especially critical for so-called outside or independent
Directors who are not employee/Directors and who should bring a certain
arms-length objectivity to Board deliberations. According to the Company's most
recent proxy statement, the Company has established a retirement or pension plan
for non-employee Directors with at least five years of service who will receive
an annual retirement benefit for life up to the amount of the annual Board
retainer in effect at the time of the Director's retirement from the Board,
calculated at 10% of the annual retainer paid at the date of retirement
multiplied by the Director's aggregate years of service up to a maximum of 10
years (or 100%). That retainer is now a generous $27,000. Directors are also
entitled to expense reimbursements.
While non-employee or outside Directors should be entitled to reasonable
compensation for their time and expertise, we are of the opinion that additional
layers of compensation in the form of retirement benefits, which may equal 100%
of the Director's annual retainer, has the pernicious effect of compromising
their independence and impartiality. It is our view that such generous and
unnecessary extra compensation for outside Directors of the Company is
management's way to insure their unquestioning loyalty and acquiescence to
whatever policy management initiates. Accordingly, when viewed from this
perspective, these types of retirement benefits become yet another device to
enhance and entrench management's control over corporate policy while being
accountable only to themselves, and not the company's owners. We believe that
this additional layer of compensation to Directors may influence their ability
to exercise that degree of independence from management which is critical to the
proper functioning of the Board.
Because of our strong concern for maximizing the ability of Boards of
Directors to act in the shareholder's interest, we feel that the long-term best
interests of the Company are not well served by such retirement policies. The
vast preponderance of Directors at various corporations are undoubtedly covered
by generous retirement policies at their principal place of employment, and they
need not be "double-dipping" at this Company or any others.
We urge your support for this proposal."
BOARD OF DIRECTORS' POSITION
The Committee on Directors is responsible for reviewing and making
recommendations regarding Board compensation. The Committee seeks to recommend
compensation that is aligned with the Corporation's goals and objectives; that
is consistent with the Corporation's size, stature, culture and industry; and
that will support the goals of attracting and retaining appropriate Directors.
10
<PAGE> 14
The Board believes that its total Director compensation package is
appropriate for the Company and strongly rejects the inference that the
retirement component of Director compensation in any way compromises the
Directors' obligation to act in the best interests of the Company's shareowners.
Bell Atlantic's policies and practices are consistent with all significant
trends in Board compensation: providing a combination of retainer, meeting fees
and stock; providing a retirement plan for its outside Directors; and increasing
the stock component of compensation. The level of the cash retainer for outside
Directors, which determines the level of pension benefits, has not been
increased since 1990. Consistent with recent trends in other large corporations,
the Company has increased the emphasis on Company stock as a component of
Director compensation. All of the Company's stock compensation plans for its
outside Directors have been approved by shareowners.
The elimination of retirement benefits would put the Company at a
competitive disadvantage in attracting and retaining Directors that are highly
qualified and possess a broad range of experience. A recent study of trends and
practices at 100 major companies conducted by Spencer Stuart reported that 79 of
the 100 companies surveyed provided directors with retirement benefits. A study
by Korn Ferry of compensation practices at large industrial companies with
revenues of at least $5 billion found that 84% of the companies surveyed had a
pension plan for outside directors. Also, the provision of retirement benefits
helps attract candidates who are self-employed or are employed by non-profit
institutions that are unable to offer pension benefits that are competitive with
those in the corporate environment.
Retirement benefits are simply a form of deferred compensation earned for
services performed as a Director. While it may be true that some Directors have
earned the right to receive pension benefits at other corporations, this does
not in any way diminish the value of the Director's service and contribution to
Bell Atlantic Corporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
OTHER BUSINESS------------------------------------------------------------------
The Board knows of no other matters to be presented for shareowner action
at the meeting. If other matters are properly brought before the meeting, the
persons named in the accompanying proxy intend to vote the shares represented by
them in accordance with their best judgment.
EXECUTIVE COMPENSATION----------------------------------------------------------
REPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION
This report is made by the Human Resources Committee of the Board of
Directors of Bell Atlantic Corporation (the "HRC"), which is the committee
charged with establishing and administering the policies and plans which govern
compensation for executive officers, including those individuals listed in the
compensation tables in this proxy statement. In the case of those executive
officers who are also members of the Board of Directors, the HRC makes
recommendations which are subject to approval by non-employee members of the
Board.
PHILOSOPHY
Compensation of executive officers of the Company is set at levels which
are intended to be sufficiently competitive with companies of similar size and
complexity to permit the Company to attract and retain the best possible
individuals. The companies that are included in the comparative analysis of
compensation include not only the companies characterized as the "peer group" on
page 19 of this statement, but approximately 40 to 60 other companies considered
by independent consultants to be appropriate for comparison, based on such
factors as revenues and number of employees.
Each executive officer's compensation is based upon both individual and
Company performance. The compensation plans are structured to provide incentives
for executive officer performance that results in continuing improvements in the
Company's financial results and in total return to shareowners over both the
short term and the long term. The plans are also designed to align the interests
of the Company's executives and its shareowners by providing for payment of a
significant portion of incentive compensation in the form of Company stock or
stock options. Thus, the amount of value generated for the Company's shareowners
is a key factor in determining the value ultimately realized by executive
officers under the plans.
11
<PAGE> 15
COMPENSATION STRUCTURE
As may be seen from the Summary Compensation Table (the "Summary Table")
included on page 15, the compensation of executive officers consists of four
principal parts. As more fully described below, three of the four components are
at risk, meaning that the ultimate value of the total compensation depends on
factors which include company financial performance, individual performance, and
stock price. The fourth component, salary, once established, is not subject to
contingency. The HRC regularly reviews each component of executive compensation.
The HRC annually considers whether to adjust the stated salary midpoint for
each of the salary grades applicable to executive officers, usually adjusting
each salary grade by the same percentage. The HRC furthermore determines for
each salary grade, from time to time, an appropriate target short term incentive
bonus under the Company's Short Term Incentive Plan (the "STIP"), derived as a
percentage of the salary grade midpoint. The applicable percentage increases
from the lower end of the salary grade range up to the salary grade assigned to
the Chief Executive Officer.
In 1990, the HRC established an appropriate aggregate dollar value for long
term incentive compensation for each salary grade, consisting of grants of
performance shares and stock options under the Company's Performance Share Plan
and the Stock Option Plan. This aggregate amount for each salary grade was
calculated as a percentage of short term cash compensation, consisting of the
salary grade midpoint and the target short term award, and was based on
comparative market surveys of long term incentive compensation. Once again, the
applicable percentage increases at higher salary grades.
In 1990, the HRC, in order to determine the number of options to grant by
salary grade, relied upon an independent survey of long term incentive
compensation at 35 major U.S. industrial companies with revenues comparable to
the Company's, and a valuation model for stock options which was recommended by
an independent compensation consultant. In 1991, the HRC approved a 1991-1995
target grant of performance shares, the dollar value of which was likewise based
on the previously described market survey of long term incentive compensation
and the value of the 1990 option grants.
In 1994, the HRC decided to transition to the use of stock options as the
sole component of long term compensation. The focus on stock options is designed
to provide strong alignment between the interests of executives and shareowners.
To determine the appropriate dollar value of options to grant by salary grade in
1994, the HRC relied upon a survey of long term compensation at approximately 35
major U.S. industrial companies with revenues comparable to the Company's. The
HRC adopted the Black-Scholes method of valuation for determining the
appropriate number of options to grant by salary grade.
As a result of the approach described above, a substantial portion of the
total compensation structure for executive officers is tied to stock
performance, and an even greater portion of total compensation is at risk.
COMPONENTS OF COMPENSATION
SALARY
Salaries shown in Column (c) of the Summary Table represent the
non-contingent portion of compensation for executive officers for 1994. Changes
in salary depend upon such factors as individual performance, the period of time
since the last change in the individual's salary or salary grade, whether the
individual's current salary is in the lower, middle or upper third of the range
for that grade, and the economic and business conditions affecting the Company
at the time.
BONUS
The amounts shown under "Bonus" in Column (d) of the Summary Table were
awarded to current executive officers, 80% in cash and 20% in deferred stock,
pursuant to the STIP. Under the STIP, annual bonuses for executive officers
depend upon growth in Earnings Per Share ("EPS") over the prior year; for
certain executive officers employed by subsidiaries of the Company, bonuses also
depend in part on financial and strategic accomplishments of the subsidiaries.
Each executive officer's bonus may range from zero to a maximum amount
determined by reference to the individual's salary grade.
At the beginning of each performance year, the HRC establishes a set of
"gateway" requirements involving service quality indicators ("SQIs"), and a
schedule showing the extent to which bonuses will be reduced or
12
<PAGE> 16
eliminated based on achievement levels under approximately 20 SQIs. The SQIs
measure customer satisfaction in specified customer groups for certain
categories of service and reliability at periodic intervals throughout the year.
The HRC also establishes a scale that permits a particular level of EPS
growth to be converted into bonus amounts for executive officers at each salary
grade. During the year, the HRC may decide to exclude from the determination of
the applicable EPS growth the effects of such factors as changes in accounting
methods or items considered extraordinary, unusual, or infrequently occurring.
The HRC reviews the applicable EPS growth and potential adjustments at each of
its meetings and reports regularly to the Board on any adjustments. The final
outcome for the year, based on the EPS scale and SQI achievements levels, which
is used to determine the STIP for the Chief Executive Officer is also used in
determining amounts payable under the annual profit sharing plan applicable to
approximately 70% of the Company's employees.
In determining final STIP awards, the HRC may reduce or increase the award
for each executive officer based upon individual performance, including
significant strategic accomplishments and success in implementing the Company's
quality improvement program, best cost principles, and other changes in the
Company's corporate culture.
From time to time, the HRC may make a special award to an executive
officer, in addition to the STIP, for extraordinary achievement in furthering
the Company's strategic goals.
PERFORMANCE SHARES
The amounts shown in Column (f) of the Summary Table as "Long Term
Incentive Plan Payouts" represent the value of shares awarded under the
Performance Share Plan. Awards may range from zero to a maximum number of shares
linked to the executive officer's salary grade. Pursuant to the Performance
Share Plan, the shares reflected in the Summary Table were awarded in January
1995, based upon a comparison of the total shareowner return on Company stock
with the average (weighted by market capitalization at the beginning of the
performance period) of the returns for the peer group (identified under "Stock
Performance" on page 19) for the four-year interim performance period from 1991
through 1994. The shares awarded under the Performance Share Plan in January
1995 were the second of three annual installments that executive officers may
receive for a performance period that will ultimately take account of cumulative
performance over a five-year period from 1991 through 1995. Averaging procedures
are used at the beginning and end of the performance period to ensure that
awards are not distorted by temporary factors affecting the stock on a
particular starting or ending date. As a result, the performance outcome under
the Performance Share Plan may differ slightly from the comparative stock
performance shown on the graph on page 19. Included in each installment under
this plan are shares reflecting the quarterly dividends actually paid on Company
stock during the performance period, treating such dividend amounts as though
they were reinvested in shares of Company stock.
Authority to make new grants under the Performance Share Plan expired in
December 1994. The final award under the Performance Share Plan will be
distributed in January 1996, and will be based on the 1991 through 1995
performance period.
STOCK OPTIONS
The last principal component of compensation arises from the Company's
grant of stock options under the Company's Stock Option Plan. The HRC sets the
number of options to be granted based on the recipient's salary grade. All
options under the Plan are granted at fair market value, and therefore any value
which ultimately accrues to executive officers is based entirely on the
Company's stock performance and bears a direct relationship to value realized by
the Company's shareowners.
As noted above, the HRC began the transition to the use of stock options as
the sole component of long term compensation in 1994, and accordingly increased
substantially the target value of annual option grants to be awarded at each
salary grade. The HRC adopted the Black-Scholes valuation model to determine the
appropriate number of options to grant according to salary grade. The HRC
granted options to participants in the Stock Option Plan in January and June of
1994; the grant in June was made to reflect modifications in assumptions
regarding volatility and projected dividend growth used in the Black-Scholes
valuation performed in January.
In addition, in order to support the adoption by the Company in 1994 of a
new, aggressive, growth-oriented business strategy, the HRC made a special,
one-time grant of stock options with performance-based features to a small
number of the most senior executives to provide strong incentive to be
successful in implementing the
13
<PAGE> 17
Company's aggressive strategy. An independent compensation consultant assisted
the HRC in determining the appropriate level of special option grants and the
design of the options' performance-based features. One-fourth of the special
options will be exercisable one year from the date of grant. The remaining
three-fourths of the options are not exercisable until nine years from the grant
date unless certain stock price hurdles are satisfied. One-fourth of the special
options become exercisable on the first date on or after the first anniversary
of the date of grant on which it is the case that for 30 successive trading days
(during any period after the date of grant) the Company's stock price equaled or
exceeded 125% of the exercise price of the options. One-fourth of the options
contain a 150% hurdle and one-fourth contain a 175% hurdle. Each executive who
received a special option grant in 1994 is subject to the stock ownership
guidelines described below.
STOCK OWNERSHIP GUIDELINES
In 1994, the HRC adopted stock ownership guidelines for certain key
executives. Under the guidelines, the Chief Executive Officer is expected to
have an ownership interest in Company stock having a value of at least four
times his or her annual salary. Other executives identified by the HRC are
expected to have an ownership interest in Company stock having a value of at
least three times his or her annual salary. Executives currently subject to the
guidelines are expected to reach the minimum recommended ownership levels by
October 1997. The HRC will monitor compliance with the stock ownership
guidelines on an annual basis.
1994 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
The plans and policies discussed above were the basis for the 1994
compensation of Raymond W. Smith, the Company's Chairman and Chief Executive
Officer. Mr. Smith's 1994 compensation from salary, STIP and the Performance
Share Plan was $2,010,800, a decrease of 18.0% from the $2,451,000 received in
1993.
The annual salary shown for Mr. Smith for 1994 in Column (c) of the Summary
Table reflects an increase of $33,500, or 4.1%, which took effect in May 1994.
In setting the new salary level, the HRC took into account its evaluation of Mr.
Smith's performance, the budgeted 4.0% merit increase for the Company as a
whole, and his years of service at the same top salary grade.
Mr. Smith's STIP award for 1994 was $778,700, out of a possible range of $0
to $1,004,600 established for him, and represented an 11.6% decrease from the
$880,700 received in 1993. In determining the award, the HRC compared (a) the
Company's EPS growth in 1994, after eliminating the financial consequences of
certain extraordinary, unusual or infrequent events and changes in accounting
methods, the most significant of which were the writedown of plant assets in
connection with the discontinued application of FAS 71 and an accrual for
separation payments under FAS 112, to (b) benchmarks established in January
1994, and reduced Mr. Smith's award by $25,000.
Mr. Smith was awarded 8,008 Bell Atlantic shares under the Performance
Share Plan for the 1991-1994 interim performance period, out of a potential
range of zero to 47,290 shares, after taking account of dividends reinvested
during the performance period. This award, worth $400,900 at the date of award,
was based on a 30.59% cumulative total shareowner return on the Company's stock
for the first four years of a five-year performance period, compared to the
42.16% average of the cumulative returns of the peer group identified on page 19
for the same period. The dollar value of the performance share award for
1991-1994 was 47.3% lower than the $761,400 value of the Performance Share award
for the 1991-1993 interim performance period. The decrease was partially due to
adjustments for amounts previously paid for the 1991-1993 interim performance
period.
As shown in the 1994 Option Table, the HRC granted Mr. Smith a total of
158,030 options as part of his regular, long term compensation. In addition, the
HRC made a special grant to Mr. Smith of 790,150 options, three-fourths of which
contain performance-based features as described above.
RECENT TAX LEGISLATION
The HRC has reviewed the potential consequences for the Company of Section
162(m) of the Internal Revenue Code which imposes a limit on tax deductions for
annual compensation in excess of one million dollars paid to any of the five
most highly compensated executive officers. In 1994, shareowners approved an
amendment to the Stock Option Plan, the purpose of which was to qualify amounts
paid under that plan as "performance-based" compensation which may be excluded
from the compensation to be taken into account for purposes of the one million
dollar limit. In the HRC's opinion, the modifications to the STIP which would be
necessary to similarly
14
<PAGE> 18
qualify payments under the STIP would not be in the Company's best interest. The
limitation under Section 162(m) had no impact on the Company in 1994, and is
expected to have no impact in 1995.
Respectfully submitted,
Human Resources Committee
John C. Marous, Jr., Chairman
Thomas H. Kean
John F. Maypole
Shirley Young
COMPENSATION TABLES
The following tables contain compensation data for the Chief Executive
Officer, the four other most highly compensated executive officers, and one
former executive officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Dollars in Thousands
Long Term Compensation
Annual Compensation ----------------------
(a) ------------------- (e) (f) (g)
Name and (b) (c) (d) Options/ LTIP All Other
Principal Position(1) Year Salary Bonus SARs (#) Payouts Compensation(2)
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------
Raymond W. Smith 1994 $831.2 $778.7 948,180 $ 400.9 $ 6.0
Chairman and Chief 1993 $808.9 $880.7 32,240 $ 761.4 $ 11.8
Executive Officer 1992 $743.2 $687.3 32,240 $1,129.3 $ 35.8
James G. Cullen 1994 $398.9 $369.3 356,400 $ 89.0 $ 7.2
Vice Chairman 1993 $353.1 $338.4 15,680 $ 169.1 $ 5.7
1992 $298.0 $295.0 10,040 $ 225.9 $ 18.0
Lawrence T. Babbio, Jr. 1994 $310.0 $284.0 291,420 $ 80.9 $ 109.0(3)
Vice Chairman 1993 $253.6 $260.3 10,040 $ 153.6 $ 30.0
1992 $239.4 $232.5 10,040 $ 115.8 $ 35.8
William O. Albertini 1994 $293.4 $255.8 216,120 $ 69.6 $ 7.5
Executive Vice President 1993 $253.0 $259.9 10,040 $ 132.2 $ 11.0
and Chief Financial Officer 1992 $223.6 $186.5 10,040 $ 156.0 $ 11.1
Stuart C. Johnson 1994 $299.1 $255.8 216,120 $ 36.2 $ 7.5
Group President -- Large 1993 $269.4 $219.1 10,040 $ 68.7 $ 48.7
Business and Information
Services, Bell Atlantic
Network Services, Inc.
- -----------------------------------
Former Executive Officer:
Robert M. Valentini 1994 $312.6 $593.8(4) 36,020 $ 81.7 $ 1,759.9(5)
Executive Vice President 1993 $307.3 $613.8 10,040 $ 155.1 $ 11.8
1992 $292.9 $270.0 10,040 $ 225.9 $ 11.4
- -----------------------------------
</TABLE>
(1) The titles listed for Messrs. Cullen, Babbio and Albertini were effective
February 1, 1995. Their respective titles in 1994 were President, Executive
Vice President and Chief Operating Officer, and Vice President and Chief
Financial Officer.
(2) Company matching contributions to the Savings Plan for Salaried Employees
for the year 1994 were $5,980 for Mr. Smith, $7,194 for Mr. Cullen, $7,500
for Mr. Babbio, $7,500 for Mr. Albertini, $7,500 for Mr. Johnson, and $7,500
for Mr. Valentini.
(3) Includes a payment of $1,490 under the Senior Manager Transfer Program and
also includes the value of options to purchase shares of Grupo Iusacell,
which was calculated as $100,000 using the minimum value method on the date
of grant.
(4) In addition to Mr. Valentini's STIP award, the total includes a special
award in the amount of $250,000.
(5) Includes $1,752,400 payable under the terms of an agreement described
on page 20.
15
<PAGE> 19
1994 OPTION/SAR GRANTS
<TABLE>
<CAPTION>
Individual Grants
- --------------------------------------------------------------------------------------------
Number of
Securities % of Total
Underlying Options/ Exercise
Options/SARs SARs or Base
Granted Granted to Price Expiration Grant Date
Name (#) Employees ($/Share) Date Value(6)
- -------------------------------------------------------------------------------------------- ----------
<S> <C> <C> <C> <C> <C>
Raymond W. Smith 103,610(1,2) 1.90% $ 55.6875 1/2004 $ 965.7
54,420(1,2) 1.00% $ 54.2500 6/2004 $ 507.2
197,538(1) 3.63% $ 54.2500 6/2004 $1,841.1
197,538(3) 3.63% $ 54.2500 6/2004 $1,841.1
197,537(4) 3.63% $ 54.2500 6/2004 $1,841.1
197,537(5) 3.63% $ 54.2500 6/2004 $1,841.1
---------- --------- ---------
948,180 17.42% $8,837.3
========== ========= =========
James G. Cullen 38,950(1,2) 0.72% $ 55.6875 1/2004 $ 363.0
20,450(1,2) 0.38% $ 54.2500 6/2004 $ 190.6
74,250(1) 1.36% $ 54.2500 6/2004 $ 692.0
74,250(3) 1.36% $ 54.2500 6/2004 $ 692.0
74,250(4) 1.36% $ 54.2500 6/2004 $ 692.0
74,250(5) 1.36% $ 54.2500 6/2004 $ 692.0
---------- --------- ---------
356,400 6.54% $3,321.6
========== ========= =========
Lawrence T. Babbio, Jr. 23,610(1,2) 0.43% $ 55.6875 1/2004 $ 220.1
8,240(1,2) 0.15% $ 54.1875 6/2004 $ 76.8
16,720(1,2) 0.31% $ 54.2500 6/2004 $ 155.8
60,713(1) 1.11% $ 54.2500 6/2004 $ 565.8
60,713(3) 1.11% $ 54.2500 6/2004 $ 565.8
60,712(4) 1.11% $ 54.2500 6/2004 $ 565.8
60,712(5) 1.11% $ 54.2500 6/2004 $ 565.8
---------- --------- ---------
291,420 5.33% $2,715.9
========== ========= =========
William O. Albertini 23,610(1,2) 0.43% $ 55.6875 1/2004 $ 220.1
12,410(1,2) 0.23% $ 54.2500 6/2004 $ 115.7
45,025(1) 0.83% $ 54.2500 6/2004 $ 419.6
45,025(3) 0.83% $ 54.2500 6/2004 $ 419.6
45,025(4) 0.83% $ 54.2500 6/2004 $ 419.6
45,025(5) 0.83% $ 54.2500 6/2004 $ 419.6
---------- --------- ---------
216,120 3.98% $2,014.2
========== ========= =========
Stuart C. Johnson 23,610(1,2) 0.43% $ 55.6875 1/2004 $ 220.1
12,410(1,2) 0.23% $ 54.2500 6/2004 $ 115.7
45,025(1) 0.83% $ 54.2500 6/2004 $ 419.6
45,025(3) 0.83% $ 54.2500 6/2004 $ 419.6
45,025(4) 0.83% $ 54.2500 6/2004 $ 419.6
45,025(5) 0.83% $ 54.2500 6/2004 $ 419.6
---------- --------- ---------
216,120 3.98% $2,014.2
========== ========= =========
Robert M. Valentini 23,610(1,2) 0.43% $ 55.6875 1/2004 $ 220.0
12,410(1,2) 0.23% $ 54.2500 6/2004 $ 115.7
---------- --------- ---------
36,020 0.66% $ 335.7
========== ========= =========
</TABLE>
- --------------------------------------------------------------------------------
(1) Exercisable on first anniversary of grant date.
(2) Eligible for reload options.
(3) Exercisable in year ten of term or earlier if 25% stock price increase is
maintained for 30 consecutive days.
(4) Exercisable in year ten of term or earlier if 50% stock price increase is
maintained for 30 consecutive days.
(5) Exercisable in year ten of term or earlier if 75% stock price increase is
maintained for 30 consecutive days.
(6) Black-Scholes calculation making the following assumptions: 5-year historic
dividend yield; 5-year historic volatility; 10-year zero coupon bond rate as
risk-free rate of return; and all options exercised at end of term.
16
<PAGE> 20
1994 AGGREGATED OPTION/SAR EXERCISES
AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Options/SARs at Year-End In-the-Money Options/
Shares Value (# of Shares) SARs at Year-End ($000)
Acquired on Realized ---------------------------- -----------------------------
Name Exercise(#) ($000) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Raymond W. Smith 0 $ 0 151,470 948,180 $ 207.6 $0
James G. Cullen 922 $ 76.1 67,164 356,400 $ 310.3 $0
Lawrence T. Babbio, Jr. 0 $ 0 44,800 291,420 $ 182.8 $0
William O. Albertini 478 $ 36.1 32,440 216,120 $ 30.6 $0
Stuart C. Johnson 0 $ 0 15,900 216,120 $ 47.2 $0
Robert M. Valentini 708 $ 53.4 49,002 36,020 $ 136.3 $0
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
BELL ATLANTIC PENSION PLANS
The Company and several of its subsidiaries maintain a noncontributory,
nonqualified pension plan known as the Bell Atlantic Senior Management
Retirement Income Plan (the "Senior Management Retirement Plan") under which
retirement benefits are payable to senior managers.
The following table sets out the estimated annual target pension payable as
a single life annuity under the Senior Management Retirement Plan for a senior
manager age 60 or older, for various levels of final average pay and years of
service:
<TABLE>
<CAPTION>
- ----------------- --------------------------------------------------------------------------
FINAL AVERAGE CREDITED YEARS OF SERVICE
PAY 15 20 25 30 35
- ----------------- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 250,000 $ 75,000 $100,000 $118,750 $ 137,500 $ 150,000
500,000 150,000 200,000 237,500 275,000 300,000
750,000 225,000 300,000 356,250 412,500 450,000
1,000,000 300,000 400,000 475,000 550,000 600,000
1,250,000 375,000 500,000 593,750 687,500 750,000
1,500,000 450,000 600,000 712,500 825,000 900,000
1,750,000 525,000 700,000 831,250 962,500 1,050,000
2,000,000 600,000 800,000 950,000 1,100,000 1,200,000
- ----------------- --------------------------------------------------------------------------
</TABLE>
Under the Senior Management Retirement Plan, a senior manager accrues a
target pension in an amount equal to a percentage of "final average pay." This
percentage factor increases with service, up to a maximum of 60 percentage
points for a senior manager with 35 or more years of service. For purposes of
calculating the target pension, "final average pay" means the average of a
senior manager's base salary plus the Short Term Incentive Plan award for the
highest five years of the final ten years of employment prior to retirement. The
pension benefit payable under the Senior Management Retirement Plan is not
subject to reduction for Social Security benefits, but is reduced
dollar-for-dollar by the amount of the benefit paid from the trust of the
qualified defined benefit pension plan in which the executive officer
participates (either the Bell Atlantic Management Pension Plan or the Bell
Atlantic Enterprises Retirement Plan, as described below; collectively, the
"Qualified Pension Plans").
The years of credited service under the Senior Management Retirement Plan,
as of December 31, 1994, were: Mr. Smith, 35 years; Mr. Cullen, 30 years; Mr.
Babbio, 28 years; Mr. Albertini, 27 years; and Mr. Johnson, 2 years.
The Qualified Pension Plans are each noncontributory, qualified pension
plans for salaried employees, including executive officers of the Company who
are eligible to receive retirement benefits under the Senior Management
Retirement Plan. Under the Qualified Pension Plans, retirement is mandatory at
age 65 for certain executives, and retirement before age 65 can be elected if
certain conditions are met. Annual pensions under the plans are
17
<PAGE> 21
computed on an adjusted career average pay basis. The applicable adjusted career
average pay formula for senior managers is the sum of (i) 1.6% of the average
pay for the five years ended December 31, 1991, plus (ii) 1.6% of pay subsequent
to December 31, 1991, but in no event is the result to be less than the benefit
accrued through June 30, 1994 under the prior adjusted career average formula.
Pension amounts under the Qualified Pension Plans are not subject to reduction
for Social Security benefits or other offset amounts. The Internal Revenue Code
of 1986 places certain limitations on pensions which may be paid from the trusts
of federal income tax qualified plans, including the Qualified Pension Plans.
Pension amounts which exceed such limitations will be paid from Company assets
under the Senior Management Retirement Plan.
Assuming that the current officers listed in the Summary Table continue in
their present positions at their current salaries until retirement at age 65,
their estimated annual pensions under the applicable Qualified Pension Plans
attributable to such salaries would be: Mr. Smith, $127,341; Mr. Cullen,
$108,541; Mr. Babbio, $97,771; Mr. Albertini, $91,986; and Mr. Johnson, $37,466.
Mr. Valentini's actual annual pension under his Qualified Pension Plan, as a
result of his retirement in 1994, is $38,181 per annum, after taking account of
certain limitations imposed by federal pension law. These annual pension amounts
are included within the target pension benefit under the Senior Management
Retirement Plan (as described above) and are not in addition to that target
pension.
OWNERSHIP OF BELL ATLANTIC COMMON STOCK
On January 31, 1995, the Directors and executive officers of the Company
beneficially owned, in the aggregate, 1,151,122 shares of Bell Atlantic common
stock (or less than one percent of the shares outstanding), including 842,468
shares under options currently exercisable by executive officers. In addition,
certain executive officers have deferred receipt of 78,148 shares under the Bell
Atlantic Deferred Compensation Plan, and certain Outside Directors have deferred
receipt of 67,927 shares under the Outside Directors' Deferral Plan. Shares
deferred under those plans may not be voted or transferred. The following table
sets forth information regarding ownership of Bell Atlantic common stock by the
named executive officers and Directors as of January 31, 1995. Except as
otherwise noted, each individual or his or her family member(s) have sole or
shared voting and/or investment power with respect to such securities.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SHARES HELD UNDER
NAME BENEFICIALLY OWNED(1) DEFERRAL PLANS(2) TOTAL
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
NAMED EXECUTIVE OFFICERS:
Raymond W. Smith 351,145 34,458 385,603
James G. Cullen 114,291 8,197 122,488
Lawrence T. Babbio, Jr. 80,474 3,913 84,387
William O. Albertini 79,848 3,296 83,144
Stuart C. Johnson 40,306 4,106 44,412
Robert M. Valentini 81,902 1,854 83,756
OUTSIDE DIRECTORS:
William W. Adams 218 5,771 5,989
Thomas E. Bolger 80,133(3) 2,158 82,291
Frank C. Carlucci 1,119 5,904 7,023
William G. Copeland 2,394 -- 2,394
James H. Gilliam, Jr. 440 5,307 5,747
Thomas H. Kean 1,394 1,129 2,523
John C. Marous, Jr. 2,994 12,920 15,914
John F. Maypole 2,394 8,194 10,588
Joseph Neubauer 214 4,672 4,886
Thomas H. O'Brien 594 7,618 8,212
Rozanne L. Ridgway 563 3,583 4,146
Shirley Young 509 10,671 11,180
</TABLE>
- --------------------------------------------------------------------------------
(footnotes on next page)
18
<PAGE> 22
- --------------------------------------------------------------------------------
1 Includes shares subject to exercisable options as follows: 255,080 for Mr.
Smith, 106,114 for Mr. Cullen, 68,410 for Mr. Babbio, 56,050 for Mr.
Albertini, 39,510 for Mr. Johnson, and 72,612 for Mr. Valentini.
2 These shares may not be voted or transferred.
3 Includes 14,806 shares held by Mr. Bolger's spouse as to which Mr. Bolger
disclaims beneficial ownership.
- --------------------------------------------------------------------------------
SECTION 16 REPORTING
Two executive officers, Joseph T. Ambrozy and John F. Gamba, each filed a
Form 5 reporting on stock acquisitions under employee benefit plans one day late
due to delays in delivery. James R. Young, an executive officer, filed late
three Forms 4 reporting on 11 sale transactions, totalling 1,976 shares,
effected through a brokerage account. These transactions were reported promptly
after Mr. Young became aware of them.
STOCK PERFORMANCE
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG BELL ATLANTIC, OTHER RHCS, AND S&P 500
[LINE GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) BELL ATLANTIC OTHER RHCS S&P 500
<S> <C> <C> <C>
1989 100 100 100
1990 101.0 96.1 96.9
1991 95.7 103.6 126.3
1992 107.4 115.7 135.9
1993 130.1 133.1 149.5
1994 114.9 130.5 151.5
</TABLE>
* Assumes $100 invested on December 31, 1989
The Company's peer group is comprised of Ameritech Corporation, BellSouth
Corporation, NYNEX Corporation, SBC Communications Inc., and U S West, Inc.,
regional holding companies ("RHCs") which, like the Company, commenced
operations on January 1, 1984, following a court-approved divestiture of certain
assets of the Bell System. Pacific Telesis Group ("PacTel") was included in the
peer group used to construct the Stock Performance Chart contained in the 1994
Proxy Statement, but has been excluded from the peer group in the 1995 Proxy
Statement due to PacTel's spin-off of its cellular operations in 1994. The
Company believes that the spin-off substantially changes the nature of PacTel's
business and future prospects. The Human Resources Committee reached the same
conclusion in modifying the peer group used by it for purposes of compensating
executives under the Performance Share Plan.
19
<PAGE> 23
EMPLOYMENT AGREEMENTS
The Company has entered into Employment Agreements (collectively, the "1994
Agreements") with each of Messrs. Albertini, Babbio, Cullen and Johnson, and
another executive officer who is not listed in the Summary Table on page 15. The
1994 Agreements prohibit each executive from disclosing proprietary information
of the Company at any time, and furthermore prohibit each executive from
engaging in certain competitive activities during the period of employment with
the Company and for a period of two years following termination of employment.
In the event of involuntary termination of employment without cause, the
executive would be entitled to a separation benefit equal to three times the sum
of the executive's base salary and an amount equal to the greater of (i) the
most recent award under the Short Term Incentive Plan or (ii) that most recent
award but without taking account of any individual performance modification to
the award. The separation benefit would be payable subject to the executive's
compliance with the terms of the 1994 Agreement. In the event of the executive's
voluntary termination of employment under certain circumstances, the Company may
elect to (i) provide for the same separation arrangement as described above for
involuntary termination of employment or (ii) waive the prohibitions contained
in the 1994 Agreement on the executive's ability to engage in certain
competitive activities, in which case the executive would not be entitled to any
separation benefit under the 1994 Agreement.
The 1994 Agreements will expire on December 31, 1995. Upon the expiration
of their 1994 Agreements, Mr. Cullen and Mr. Johnson would be subject to the
terms of the Non-Compete and Proprietary Information Agreement entered into by
them with the Company in 1993 (the "1993 Agreement"). The 1993 Agreement is
substantially equivalent to the 1994 Agreement, except that the separation
benefit under the 1993 Agreement is equal to two times the executive's base
salary and most recent award under the Short Term Incentive Plan, and except
that the 1993 Agreement has no expiration date.
In June 1994, the Company entered into an agreement with Mr. Valentini
which specified the terms and conditions that would apply in the event that Mr.
Valentini retired or otherwise terminated his employment with the Company during
the period from July 1, 1994 through June 1, 1995. Mr. Valentini retired from
the Company on December 31, 1994. Pursuant to the agreement, Mr. Valentini is
entitled to receive a cash payment in the amount disclosed in footnote 5 to the
Summary Compensation Table on page 15. In addition, the Company waived a portion
of the early retirement discount which would otherwise have been applicable to
Mr. Valentini under the terms of the Senior Management Retirement Plan. The
agreement imposes certain conditions and obligations on Mr. Valentini following
his retirement.
SUBMISSION OF SHAREOWNER PROPOSALS AND DIRECTOR
NOMINATIONS FOR 1996 ANNUAL MEETING
---------------------------------------------------
Shareowners who wish to submit a proposal for inclusion in the Board of
Directors' 1996 proxy statement are advised that such proposals must be received
by the Secretary no later than November 8, 1995. SEC rules set forth standards
as to what shareowner proposals are required to be included in a proxy
statement. In addition, the Company's by-laws provide that any shareowner
wishing to make a nomination for the office of director, or wishing to initiate
a proposal or other business, at the 1996 Annual Meeting must give the Company
at least 60 days advance notice, and that notice must meet certain other
requirements set forth in the by-laws. Shareowners may request a copy of the
by-laws from the Vice President - Corporate Secretary and Counsel, Bell Atlantic
Corporation, 1717 Arch Street, 32nd Floor, Philadelphia, PA 19103.
PROXY SOLICITATION
- --------------------------------------------------------------------------------
The Company will pay the entire cost of solicitation of proxies. Georgeson
& Co. Inc., New York, NY, has been retained by the Company to solicit proxies by
personal interview, mail, telephone and telegraph, and will request brokers,
banks and other custodians, nominees and fiduciaries to forward soliciting
material to beneficial owners of stock held of record by such persons. The
Company will pay Georgeson & Co. Inc. a fee of $15,000, and will reimburse
expenses incurred in connection with its services. Proxies also may be solicited
by the Company's directors, officers and employees, and by The Bank of New York,
the Company's transfer agent.
By Order of the Board of Directors
P. Alan Bulliner
Vice President - Corporate Secretary and Counsel
February 28, 1995
20
<PAGE> 24
BELL ATLANTIC CORPORATION
(LOGO)
PRINTED ON RECYCLED PAPER.
This document is printed on recycled paper which contains at least 10%
post-consumer waste.
<PAGE> 25
BELL ATLANTIC STOCK COMPENSATION PLAN
FOR OUTSIDE DIRECTORS
(Restated as of October 25, 1994)
1. NAME OF PLAN. The plan shall be known as the Bell Atlantic
Stock Compensation Plan for Outside Directors (and is referred to herein as the
"Plan").
2. OBJECTIVES OF THE PLAN. The objectives of the Plan are to
encourage ownership of shares of the Common Stock (the "Stock") of Bell Atlantic
Corporation (the "Corporation"), and to further align the interests of
non-employee members of the boards of directors of Participating Companies with
the interests of shareowners of the Corporation.
3. EFFECTIVE DATE. The effective date of the Plan is July 1,
1991. The Plan was submitted to, and was approved by, shareowners at the annual
meeting of the Corporation in April 1991.
4. PARTICIPATING COMPANIES. The "Participating Companies" in the
Plan shall be the Corporation and the domestic operating telephone company
subsidiaries of the Corporation (the "OTCs").
5. ELIGIBLE PARTICIPANTS. Each member of the board of directors
of a Participating Company who is, as of the date of any award or grant
hereunder, in active service as a director, but who is not then an employee of
the Corporation or any subsidiary of the Corporation (each, an "Outside
Director"), shall be eligible to receive an award or grant under the Plan.
6. STOCK OPTIONS
(a) ANNUAL GRANT OF OPTIONS. Commencing in January 1995, and
annually thereafter, each individual who, at the close of the regular January
meeting of the Board of Directors of the Corporation (the "Board"), is then
serving as an Outside Director of the Corporation shall receive a grant of 1,000
nonqualified stock options ("Options") to purchase shares of Stock at an
exercise price per Option equal to the fair market value of the Stock on the
date of grant. "Fair market value", for purposes of the previous sentence, shall
have the same meaning as stated in the Bell Atlantic 1985 Incentive Stock Option
Plan, as that plan may be amended from time to time (the "ISO Plan"). Options
granted under this Plan shall be granted on the same date, and with the same
exercise price, as the principal annual grant of options by the Human Resources
Committee ("HRC") of the Board under the ISO Plan. Options shall be granted
under this Plan automatically, and no action by the Board shall be required. The
Board shall retain the authority in its sole discretion to revise, from time to
time, the number of
- -------------------------------------------------------------------------------
Stock Compensation Plan for Outside Directors Page 1 of 5
<PAGE> 26
Options to be automatically granted annually under this Plan, provided, however,
that no such action shall be taken without first obtaining the advice of
counsel.
(b) INITIAL GRANT UPON ELECTION TO THE BOARD. Effective as of the
first day on which Stock is publicly traded in the calendar month first
following the month in which an individual's initial election to the Board, as
an Outside Director, becomes effective, the Outside Director shall receive a
grant of 1,000 Options, with an exercise price equal to the fair market value of
the Stock on said first trading day of said month.
(c) TERMS OF OPTIONS. Options shall be subject to the following
terms and conditions:
(i) Options shall expire not later than the tenth
anniversary of the date of grant;
(ii) Options shall be subject to a waiting period of one
year, and shall first become exercisable on the first
anniversary of the date of grant;
(iii) In the event of the retirement of an Outside Director
from the Board upon having attained mandatory retirement age,
or on account of disability, any outstanding Options which are
not yet exercisable shall become exercisable on the day
following the Outside Director's retirement, and all
outstanding Options shall expire on the earlier of the fifth
anniversary of the date of retirement or the tenth anniversary
of the date of grant;
(iv) In the event of a resignation or a termination of the
service of an Outside Director from the Board for any reason
other than disability or retirement upon having attained
mandatory retirement age, any outstanding Options shall expire
at the close of business on the effective date of said
resignation; provided, however, that the Board may, in its
discretion, take action to cause the Options of such an Outside
Director to become exercisable, and/or to remain exercisable,
for a period of time subsequent to said resignation or
termination, but in no event may the Options remain exercisable
after the later of the fifth anniversary of the last date of
service as an Outside Director or the tenth anniversary of the
date of grant;
(v) In the event of the death of an Outside Director at a
time when Options are outstanding, any such Options shall be
exercisable until the earlier of the first anniversary of the
date of death or the tenth anniversary of the date of grant;
and
(vi) The exercise price for Options shall be payable solely
in cash.
(d) OPTION AGREEMENTS. With respect to each grant of Options, the
Plan Administrator, with the advice and assistance of counsel, shall have the
authority,
- -------------------------------------------------------------------------------
Stock Compensation Plan for Outside Directors Page 2 of 5
<PAGE> 27
responsibility and discretion to prepare a form of agreement (the "Option
Agreement") which shall state the terms and conditions stated in section 6(c)
hereof, and such additional terms and conditions as the Plan Administrator
determines are appropriate. In each case, the grant of Options to an Outside
Director shall be conditioned on the Outside Director signing the corresponding
Option Agreement within a period determined by the Plan Administrator. In the
event that an Optionee does not deliver to the Plan Administrator a signed
Option Agreement within an applicable period, or signs an Option Agreement which
has been modified in a manner unacceptable to the Plan Administrator, the
Optionee shall forfeit the Options stated on said Option Agreement.
7. STOCK AWARDS.
(a) ANNUAL AWARDS. On the first business day of July of each year,
each Participating Company except the Corporation shall cause to be transferred
to each of its Outside Directors who is on that day in active service as an
elected Outside Director of the Participating Company, an award of Stock (and
cash in lieu of any fractional share) for services to be rendered as an Outside
Director for the twelve-month period on and after that date (or for any portion
of said twelve-month period during which the Outside Director remains on the
respective board).
(b) VALUE OF AWARDS. For Outside Directors of Participating
Companies other than the Corporation, the annual Stock award shall be a number
of whole shares (and cash in lieu of any fractional share) the value of which
shall equal $1,000. For purposes of computing the number of shares to be
awarded, the value of a share of Stock at the time of an award shall be deemed
to be equal to the average of the closing prices of the Stock for each of the
last five trading days of the month of June immediately preceding the date of
the award.
(c) ELECTION TO TRANSFER SHARES TO DRSPP. Each Outside Director
who is eligible for an award of Stock under this section 7 shall, prior to the
date of the award for a given year, have the right to elect whether to receive
the award in the form of a share certificate, which shall be solely in the name
of the Outside Director, or to have the Corporation deposit the share award
directly into an account, which shall be solely in the name of the Outside
Director, under the Corporation's Dividend Reinvestment and Stock Purchase Plan
("DRSPP"). For an Outside Director who elects to deposit the award in a DRSPP
account, the terms of DRSPP shall thereafter apply and the shares awarded under
this Plan shall be treated no differently than any other shares held under
DRSPP.
(d) NO ACCRUED INTEREST IN SUBSEQUENT AWARDS. Until the applicable
award date under the Plan, an eligible Outside Director shall have no accrued
right to receive all or any portion of any subsequent award, except to the
extent provided in any plan amendment adopted by the Plan Administrator pursuant
to Section 12(c)(iii). An eligible Outside Director shall have no right to
assign or alienate any interest in any award which has not yet been presented
under this Plan.
- -------------------------------------------------------------------------------
Stock Compensation Plan for Outside Directors Page 3 of 5
<PAGE> 28
8. SOURCE OF STOCK. Shares of Stock awarded under the Plan, and
Stock transferred to an Outside Director upon exercise of Options, may be
treasury shares, or authorized but unissued shares, or outstanding shares of
Stock acquired by the Corporation in the open market or elsewhere.
9. TAXES. Any and all tax consequences for an Outside Director
which are associated with an award of shares or an exercise of Options under
this Plan shall be the sole responsibility of the participating Outside
Director.
10. AUTHORIZED NUMBER OF SHARES. The aggregate number of shares of
Stock which may be awarded under this Plan, or transferred upon exercise of
Options, shall be 100,000. Said limit shall be adjusted, in the manner
determined appropriate by the Plan Administrator with the advice of counsel, in
the event of any stock split, stock dividend, recapitalization, or other
change affecting the Stock.
11. NO EFFECT ON RETIREMENT PLAN OR DEFERRED FEE PLAN. The awards
of Stock, and transfers of Stock upon exercise of Options, under this Plan shall
not be treated as a portion of the Outside Directors' retainer, or as benefit
bearing compensation of any kind, for purposes of determining the amount of any
benefit under the Bell Atlantic Retirement Plan for Outside Directors. Neither
the Options nor the Stock received under this Plan shall be eligible for
deferral under the Bell Atlantic Deferred Fee Plan for Outside Directors.
12. ADMINISTRATION; AMENDMENT AND TERMINATION.
(a) AUTHORITY OF THE BOARD. The Board of the Corporation shall
have the authority to amend and to terminate the Plan at any time in its
discretion; provided, however, that any amendment adopted by the Board may be
submitted for approval by the shareowners of the Corporation if, in the opinion
of counsel, such approval is required to exempt the awards of Stock, and the
grant or exercise of Options, under this Plan from the short-swing trading
provisions of Section 16 of the Securities Exchange Act of 1934, or to preserve
the status of Outside Directors as "disinterested administrators" (within the
meaning of regulations issued pursuant to said Section 16) for purposes of the
Corporation's compensation plans for officers and key employees. The Nominating
Committee of the Board may recommend amendments to the Plan for the approval of
the full Board.
(b) AUTHORITY OF BOARD OF DIRECTORS OF OPERATING TELEPHONE
COMPANIES. The board of directors of an OTC shall have the authority to adopt
the Plan on behalf of the OTC, and to withdraw from participation in the Plan at
any time in its sole discretion.
(c) AUTHORITY OF PLAN ADMINISTRATOR. The Vice President - Human
Resources of the Corporation, or any person to whom that officer delegates
administrative responsibility for the Plan, shall be the "Plan Administrator"
(as that term
- -------------------------------------------------------------------------------
Stock Compensation Plan for Outside Directors Page 4 of 5
<PAGE> 29
is used herein), with the authority (i) to administer and interpret the Plan,
(ii) to prepare and distribute Option Agreements and administer the exercise of
Options, (iii) to adopt minor and administrative modifications of the Plan and
amendments which the Plan Administrator believes, with the advice of counsel, to
be necessary or appropriate to comply with changes in applicable law or to
ensure that transactions under the Plan remain exempt from Section 16(b) of the
Securities Exchange Act of 1934 to the maximum extent practicable, (iv) to adopt
Plan provisions for the awarding of prorated amounts of Stock in appropriate
circumstances, and (v) with advice of counsel, to submit the Plan, or amendments
to the Plan, to the shareowners of the Corporation for approval.
(d) AUTHORITY OF CORPORATE SECRETARIES OF OTCS. The corporate
secretary of each OTC shall have the status of deputy administrator of the Plan,
with authority to assist the Plan Administrator with communications and
correspondence with Outside Directors of the respective OTC.
- -------------------------------------------------------------------------------
Stock Compensation Plan for Outside Directors Page 5 of 5
<PAGE> 30
PROXY/VOTING INSTRUCTION CARD [BELL ATLANTIC LOGO]
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING
OF SHAREOWNERS
The Penn State Scanticon Conference Center Hotel, Friday, April 28, 1995, 10
a.m. Local Time, 215 Innovation Boulevard, Penn State Research Park, State
College, Pennsylvania
The undersigned hereby appoints W.O. Albertini, J.G. Cullen and R.W. Smith, and
each of them, proxies, with the powers the undersigned would possess if
personally present, and with full power of substitution, to vote all common
shares held of record by the undersigned in Bell Atlantic Corporation, upon all
subjects that may properly come before the meeting, including the matters
described in the proxy statement furnished herewith, subject to any directions
indicated on the reverse side of this card. IF NO DIRECTIONS ARE GIVEN, THE
PROXIES WILL VOTE FOR THE ELECTION OF ALL LISTED NOMINEES FOR DIRECTOR (W.W.
ADAMS, W.O. ALBERTINI, L.T. BABBIO, JR., T.E. BOLGER, F.C. CARLUCCI, W.G.
COPELAND, J.G. CULLEN, J.H. GILLIAM, JR., T.H. KEAN, J.C. MAROUS, JR., J.F.
MAYPOLE, J. NEUBAUER, T.H. O'BRIEN, R.L. RIDGWAY, R.W. SMITH AND S. YOUNG),
IN ACCORD WITH THE DIRECTORS' RECOMMENDATIONS ON THE OTHER SUBJECTS LISTED ON
THE REVERSE SIDE OF THIS CARD AND AT THEIR DISCRETION ON ANY OTHER MATTER
THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
This card also constitutes your voting instructions for shares held of record
by Bell Atlantic Corporation for your account in the Dividend Reinvestment and
Stock Purchase Plan (DRSPP) and, if shares are held in the same name, shares
held in the 1976 Bell Atlantic Employee Stock Ownership Plan, Savings Plan for
Salaried Employees, or Savings and Security Plan (Non-Salaried Employees).
IF YOU DO NOT SIGN AND RETURN A PROXY, OR ATTEND THE MEETING AND VOTE BY
BALLOT, YOUR SHARES CANNOT BE VOTED, NOR YOUR INSTRUCTIONS FOLLOWED, EXCEPT
THAT SHARES IN THE SAVINGS PLANS WILL BE VOTED AS DESCRIBED ON PAGE 1 OF THE
PROXY STATEMENT.
Please sign on the reverse side and return this BELL ATLANTIC CORPORATION
proxy in the enclosed envelope, making sure that P.O. BOX 1019
the address at right shows through the window. NEWARK, N.J. 07101-9757
NOTATIONS:
-------------------------------------------------------------------
<PAGE> 31
DIRECTORS RECOMMEND A VOTE "FOR":
<TABLE>
<CAPTION>
A. ELECTION OF ALL DIRECTORS B. RATIFICATION OF INDEPENDENT ACCOUNTANTS
<S> <C> <C> <C> <C> <C>
FOR WITHHOLD EXCEPTION* FOR AGAINST ABSTAIN
/X/ /X/ /X/ /X/ /X/ /X/
<CAPTION>
*EXCEPTION(S) C. AMENDMENTS TO OUTSIDE DIRECTORS
--------------------- STOCK COMPENSATION PLAN
<S> <C> <C> <C>
To vote your shares for all Director FOR AGAINST ABSTAIN
nominees, mark the "FOR" box in item A. /X/ /X/ /X/
To withhold voting for all nominees, mark
the "Withhold" box. If you do not wish your
shares voted "For" a particular nominee,
mark the "Exception" box and enter the name(s)
of the exception(s) in the space provided.
</TABLE>
CHECK HERE TO:
1. INDICATE NOTATION 2. ELIMINATE DUPLICATE
ON REVERSE SIDE ANNUAL REPORTS
/X/ /X/
DIRECTORS RECOMMEND A VOTE "AGAINST"
THE SHAREHOLDER PROPOSALS REGARDING:
D. ADDITIONAL COMPENSATION INFORMATION
FOR AGAINST ABSTAIN
/X/ /X/ /X/
E. NUMBER OF DIRECTOR NOMINEES
FOR AGAINST ABSTAIN
/X/ /X/ /X/
F. DIRECTORS' OTHER BOARD AFFILIATIONS
FOR AGAINST ABSTAIN
/X/ /X/ /X/
G. OUTSIDE DIRECTORS' PENSIONS
FOR AGAINST ABSTAIN
/X/ /X/ /X/
Please sign exactly as name or names appear on this proxy. If stock is held
jointly, each holder should sign. If signing as attorney, trustee, executor,
administrator, custodian, guardian or corporate officer, please give full title.
DATE , 1995
-------------------------------
SIGNATURE
--------------------------------
SIGNATURE
--------------------------------
VOTES MUST BE INDICATED (X) IN BLACK
OR BLUE INK AS IN THIS EXAMPLE. /X/
